Ever since Southwest announced its intention to bid for Frontier last week, there’s been some resistance out there in Denver. Why hasn’t there been much for Republic’s bid? Well, from what we know right now, Republic would keep the Frontier brand running, while Southwest would integrate Frontier into the rest of the airline, and dump the Airbus fleet.
Since Southwest is saying Frontier would go away, that’s created some issues. In fact, there was a small rally in support of Frontier yesterday. There is concern that many Frontier employees would lose jobs as the result of a Southwest purchase. (Southwest has said that it would hire Frontier employees, but hasn’t been specific in terms of numbers. Based on this tweet, it seems that the two pilot groups are already speaking to one other, though.)
So, this is something that the folks over at Southwest will have to watch. For me, angry passengers isn’t that big of a deal – they would just have a choice between Southwest and United. But it is important to see what happens on the labor side – displeased Frontier workers could certainly make the merger process more difficult.
Last evening, I spoke Aaron Bailey about the merger. Aaron is a loyal Frontier customer who loves the airline, and doesn’t want to see it go away, so he’s created the website SaveFrontier.org. During the podcast, he discusses why he loves Frontier, why he thinks a Republic bid is better, and tells me about his efforts.
You can grab the podcast here.
Having flown SWA, Frontier and UAL in and out of Denver over the years, I do not get why it’s such a big deal if Frontier or Republic buy the airline.
The reasons given seem to be :
a) 3 airlines with a big presence instead of 2
b) SWA isn’t making money in Denver
c) Republic has promised to keep Frontier around; SWA hasn’t.
d) jobs
The problem with these is that they’re all, well, damn weak. So what if there are 3 instead of 2? That’s better than having just UAL after Continental pulled out. Plus the market long ago moved away from the hub and spoke model. The implication is that less airlines would mean less competition. Of course that isn’t true, at least not in a meaningful way. For example, what is the difference in having 4 instead of 5 airlines flying the Denver – Minneapolis route?
I’m not sure what the exact point is over if SWA is or isn’t making money in Denver. What does it prove? UAL hasn’t been. Frontier wasn’t until they went into bankrupcty and ditched a bunch of their costs. So SWA’s not making money? Most airlines aren’t.
As for jobs, I don’t want to belittle the few thousand jobs having Frontier means to Denver. But it’s not an all or nothing proposition. SWA would still mean jobs in Denver, just not as many nor the same mix. MOre so a Republic takeover doesn’t mean they’ll end up with more jobs in Denver than under the SWA situation. To make this worth Republic’s investment, yes, they need the grow the Frontier brand. But they also need to cut costs. It’s likely that they too will be shedding jobs. And it may be just as many if they choose to have their cheaper Republic pilots come in and fly planes for Frontier.
More so for Republic, this is a huge risk. They’re taking on a company that’s just as big as them but with a totally different take on the business. As thin as Frontier’s profits are and with Frontier just as big as Republic, a few things could go wrong and a year or two from now we could see Republic having to ditch it’s Frontier experiment and let it go belly up. And in a year or two, SWA may be more interested in investing in places like Minneapolis and Boston.