Frontier may have revenue problems, as we discussed last week. But here’s the thing about revenue problems… they are a lot less of a problem if your costs keep going down too. While Frontier tackles its revenue issues, it’s also tackling costs. These aren’t just little tweaks either. The airline is planning on switching its operating model.
European ultra low cost carriers (ULCCs) tend to operate in similar ways to each other. They set up multiple bases all around the network and they have airplanes and crews go out and back from that base, spending the night at the home base each night.
This is apparently harder to do in the US than in Europe. On the Q3 earnings call, Frontier CEO Barry Biffle said that in Europe airlines can open bases with just a couple of airplanes. That’s not possible here in the US because the strict crew reserve requirements would make staffing levels too difficult for such a small operation. This doesn’t mean the model doesn’t work in the US, but it needs bigger bases to thrive.
Allegiant has done this since the dawn of time, and its bases do tend to be larger when you think about Las Vegas, Orlando/Sanford, and others. Now, Frontier says it needs to do this more. It does some of it now, but it is looking to make the vast majority of its network operate using this model in the future. This will help the airline isolate weather or ATC issues in a small piece of the network instead of impacting the whole thing.
Some of the bases are obvious. Of course we’ll see bases in Atlanta, Dallas/Fort Worth, Denver, Las Vegas, Miami, Orlando, Philadelphia, Phoenix, and Tampa. Those are crew bases today and except for Miami, are the airline’s largest stations. But there will undoubtedly be more opening in smaller cities where the airline has enough heft.
So how will this work? Well, I went and looked at some airplanes a couple weeks ago and found two great examples. Let’s start with the regular model that Frontier has been using so far:
Betty the Bluebird started off her week with a Sunday night flight in from Denver to Portland (OR) where she stayed overnight. The next day involved going back to Denver, roundtrip to Fargo, and roundtrip to Houston, spending the night back in Denver. For that day, Betty was basically a Denver-based aircraft.
On Tuesday, Betty moved on to Orlando where she flew roundtrip to San Juan and Baltimore, spending the night back in Orlando, this time acting as an Orlando-based aircraft.
On Wednesday, she flew up to Philly did a roundtrip to Sarasota and Nashville before spending the night in Philly, this time pretending to be a Philly-based airplane.
Finally, on Thursday, she came down to Tampa, and then did a roundtrip to Aguadilla and Buffalo before spending the night in Tampa which means, you guessed it, she was a Tampa-based airplane that day.
This is a lot of moving around, and as you can see in the map above, it covers the whole country. So what happens if on Wednesday, there’s a bad ATC day in the northeast and Philly is messed up? Crews time out, flights are delayed, and now Frontier has to tell someone in Tampa that they can’t get to Aguadilla because a flight from Orlando to Philly was delayed the day before. (I mean, let’s be honest. There’s no way Frontier is telling people this or much of anything about why planes are delayed, but that would be the reality.)
The same thing can happen if a snowstorm hits Denver or a Nor’easter hits the Northeast. This airplane is everywhere and one messed up link in the chain could ruin the whole plan.
If Frontier keeps airplanes and crews operating from specific bases, it erases much of that uncertainty. We need to look no further than Peachy to understand.
Peachy the Fox started her day in Miami on Monday, October 24 when Betty was in Portland. But Peachy stayed remarkably consistent, only visiting four airports during her week of hopping around. Part of this is because Miami is a small base, so there aren’t that many options. But that’s really the point.
For Peachy, a snowstorm in Denver does nothing. Even a hurricane in Tampa has no impact. Instead, Peachy has to worry only about Miami weather and whatever lies on the other end.
This is a more simple model, but honestly, it’s probably not even where Frontier wants to go. I would imagine Frontier’s goal would be to base more planes in Philly so that those could handle the sun routes from there. This way it would keep Miami’s performance to other locations in a better place if it doesn’t have to get stuck in the congested northeast airports where delays are by far the worst.
Having the airplane start out in the same place in the morning and ending in the same place at night also adds to the simplicity. The crews can be built up in the base. Before a crew leaves Miami, they can know that they’ll be doing roundtrips. Eventually they will get home that day, barring a really nasty delay. And it saves on hotel costs for Frontier as well.
It might end up being boring for the crewmembers, but they would probably rather be bored than stuck somewhere far from home due to air traffic control delays.
With a more simple operation, Frontier can then improve utilization, and not have to worry about having as much buffer throughout its network. Local weather patterns can help determine how much aircraft can be scheduled during any particular season. For example, it can probably go heavy on utilization in Phoenix most of the year, but from in Q3 when monsoons kick up, Frontier may want to add more buffer and position more reserve crews. It becomes much easier to isolate the operation into a bunch of different tiny operations.
Whether this will work for Frontier or not, I have no idea. It has already done some of this, so it knows what it’s getting into. But having fewer airplanes running through any single node makes it harder to disrupt the entire airline. That’s good for customers, and it’s good for Frontier.