CEO Says Frontier Will 'Double in Size'
Last week more than 500 industry representatives and journalists attended the 2016 Airports Council International-North America (ACI-NA) JumpStart Air Service Development Conference. One of the keynote speakers at the event in Denver was Frontier CEO Barry Biffle.
Biffle spoke about how his airline had spent the past few years restructuring its operation. He also highlighted how new Airbus A320neos would be integrated into the current fleet. The improvements and addition of ultra-efficient planes will allow the airline to undertake an aggressive plan to increase its size over the next few years. Biffle expects big things for what is now one of the country’s smallest major carriers. “Over the next five years we expect to double the airline’s size.”
This statement is not really a surprise
Frontier has been adding routes rapidly. At the beginning of the year, the carrier announced 42 new routes. Most of these services took off successfully in mid-April, though a few launched later as the airline waited for delivery of new airplanes. The last of these new routes, Phoenix-Seattle and Phoenix-Portland, will take off at the end of June.
Even as it starts a large number of new routes, Frontier is being cautious. Most of these new services will run three or four days per week, not daily. This allows the carrier the chance to measure initial demand and react accordingly.
Perfect climate for expansion
Frontier’s approach has been to expand in specific markets. According to Frontier spokesman Jim Faulkner, the airline’s new routes were chosen because they were “historically overpriced and underserved.” Judging by current trends, there should be more of these routes in the future. Legacy carriers have been dropping many of their lower-demand routes in smaller markets, leaving openings for low cost carriers like Frontier who can make these routes profitable because of their lower operating costs and smaller planes.
Also, major carriers will be attempting to increase fares over the coming year or so. The higher fares should eventually leave room for airlines like Frontier to undercut the competition (as long as they can deal with the inevitable rise in fuel prices).
Beating other ultra-budget airlines
So there is certainly evidence to support Biffle’s claim that his airline will “double in size.” With recent improvements in on-time performance and the promise of better customer service, Frontier is also poised to become a leader in its market segment. Among “ultra-low-cost carriers” (a term coined by Biffle), Frontier is starting to stand out. Two of its main competitors, Spirit and Allegiant, are still struggling with on-time performance and still experiencing a high level of customer complaints.
Could anything derail Frontier’s plans to double its size? Legacy carriers are adding no-frill fares to their planes. By segmenting their cabins like this, Delta and its peers could potentially cause problems because they could steal Frontier loyalists who usually choose ultra-budget airlines because of price alone.
Also, though Frontier has made improvements, important factors, such as its on-time performance, are still inconsistent and the number of complaints it receives are still high relative to other major airlines. Improvements will still have to be made in these areas if Frontier wants to remain ahead of its ultra-budget rivals and sell itself as a viable alternative to other major airlines.
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