Republic’s certainly been a fun player to watch of late. The regional carrier has become what some might call a “real” airline after acquiring Frontier and Midwest, instead of just focusing on fixed-fee operations. Republic did release its fourth quarter earnings last night, but let’s talk about the future, because that’s just more fun. 
Today we saw an even more interesting development with Republic’s announcement that it will order Bomardier’s CS300, certainly a big boost for the type and the manufacturer. Republic plans to order 40 of the type with 40 options, with deliveries starting in the second quarter of 2015. The aircraft will seat 138, and there will be 5 rows of STRETCH seating for 25 passengers (the aircraft is in a 2-3 configuration). And that’s basically all we know for now. Which is where things get interesting.
A Bombardier rendering of a Republic CS300 aircraft.
Photo Credit: Bombardier.
At face value, this order looks like a replacement for Airbus aircraft, especially those that might be coming off lease in the future. The CSeries will seat two more than Frontier’s current A319s. Bombardier is promising some strong economic benefits of the aircraft. Bryan Bedford called the aircraft “game-changing” during today’s earnings call, and it was also mentioned how it will provide “great flexibility” for them. Clearly, if the CSeries does end up doing great on the cost side of things, that certainly helps give Republic an advantage in competitive markets like its Denver and Milwaukee hubs.
This order might make Boeing and Airbus get moving on a decision on re-engining the 737 and A320 families, respectively. Plus, it might want to make other carriers take a closer look at the aircraft now. (United and AirTran, strong competitors in Denver and Milwaukee, respectively, have both expressed interest in the aircraft.) But back to Republic.
There’s no word on where these aircraft will end up. Granted, that decision is still about five years away. But this wasn’t a Frontier order or a Midwest order, it was a Republic order. Heck, we don’t even know what crews will be flying the CSeries (if it’s Republic, that’s pretty interesting). So there are a lot of unanswered questions about the aircraft. But there are plenty of other short-term questions as well.
We still don’t know what will happen with Republic’s two brands, Frontier and Midwest. Republic is still doing a bunch of research and says that won’t be completed until the middle of next month. It has said, however, that there will be a “unified” brand. A huge chunk of that is behind the scenes – putting everything under one booking system, for example.
On the public side, there have been moves to unify the brands as well. One will find the same in-flight catering menu on both Frontier and Midwest, for instance. The inflight magazines of each carrier show a combined route map. The two airlines extensively codeshare with one another (basically the entire route map), and Republic has said that’s been doing well. One example that was used was that options getting to the West Coast from Milwaukee might be limited to one nonstop a day, for example, but the Frontier codeshare opens up a few new connecting opportunities.
I was thinking about the two brands over the weekend – which brings me to the title of today’s post. Is Republic the North American Lufthansa? Think about it. Lufthansa owns a bunch of carriers (i.e. Austrian, Brussels, and Swiss), each with their own unique identities, which is part out of necessity – I doubt there would be many customers happy if Lufthansa repainted all of Swiss’ aircraft in its own livery! But the airlines are unified under the Star Alliance brand, all use the same loyalty program (Miles & More), and use extensive codesharing.
Isn’t Republic’s situation similar? Instead of national pride at play, we have two airline brands that are considered as the “hometown airline” in each of their respective hubs. And now Republic is trying to figure out what it’s doing to maintain that customer loyalty, while taking advantage of opportunities presented by the two airlines participating.
Regardless, it will be fun to watch. Both Frontier and Midwest continue to increase capacity in competitive markets. In the latter’s case, a lot of that extra flying is rebuilding its former route map. Let’s see how it goes.
Apologies for the very long post. What do you think?
I assumed the order was for Midwest, since the press release was posted on their website.
Paul, that is true, good eye. Though Frontier and Midwest aren’t mentioned once in the text of the press release.
Dan, I like your long post! You made me think! I think your insights are right on target — if you buy a brand, and the brand is strong, why mess with it? The brand loyalty exists, based on locale, so no reason to upset it; it’s preferable to creating a boutique brand out of whole cloth (United’s “Ted,” Delta’s “Song”).
It will be interesting to see if & how Republic reaps the best of both subsidiaries and folds them into the new aircraft and service.
Dan, wonderful post – and I think, it deserves its length.
I am obviously not the US market expert, but I think, LH will be very profitable and very successful with its brand strategy.
At FlightMemory we hear a lot of tears over NWA being gone and some have definitely not switched to DL for what reasons they may have.
For LH of course, it might not have been the first road they wanted to take, but as AUA and LX are not only strong brands, but there is also the historic fear of Swiss and Austrians, that Germans might act as a big brother does with his toddler brother. The LX takeover only went through due to the bankrupcy of the old LX…AUA was simply another time…
And we will see, what happens with Brussels and especially bmi…
Keep up such great work – nice to see, we were right about you all the time
Perhaps Republic does something similar to Alaska/Horizon. In Denver, it’s all Frontier branding. In Milwaukee, it all Midwest branding. Everywhere else, it’s Frontier/Midwest or Midwest/Frontier. Work towards a common fleet as you suggest in your post, but separate liveries for the two bases; similar to the way AA only flies 737′s out of Miami and only MD’s out of Chicago (I think that’s the way it is). that way they can keep the best qualities of both brands in the eyes of the public, but consolidate under a single corporate standard and culture.
I predict they’ll come up with a unified brand called “Midwestern Frontier of the Republic”. Those new aircraft should be long enough to paint those 35 characters on it, right?
Is the “hometown” airline benefit really worth the hassle/cost of running multiple brands? Are the average travelers loyal to the brand even though the people/aircraft/service has completely changed over the years? (I mean, seriously, what’s left of the Midwest of yore? And isn’t Republic’s ambition much greater than catering to Milwaukee and Denver residents? By comparison, Lufthansa had to consider the sentiments of entire (albeit small) countries and their national prides.
Sounds like an expensive way to work towards RAH’s “fleet simplification” plans made earlier. But, who really cares about the brand anymore? I’ve flown passengers who fly ABC-DEF on one airline and have a :30 minute turn in a major hub to get to GHI on a different carrier, all to save 1:00 on the ground and $100.
While customers in each “hometown” community may be hopeful for the brands to remain independent, it’s not going to happen. As the merger continues to unfold it’s going to be increasingly more difficult and un-economical to operate as multiple brands. The LH situation is much more complex as these carriers represent countries and just not brands.
If there is a company who could pull off a multiple brand strategy, it may be Republic. Heck they already fly for many companies under the same certificate. At the end of the day though, I think the final product will be more similar to Frontier than Midwest (sorry MKE readers).