Archive for the 'Frontier' CategoryPage 3 of 7

Catching Up With Frontier Part 2 – Odds and Ends

Published
by
Dan Webb
on October 6, 2010
in Frontier
. 0 Comments

After talking about the potential effects of Southwest’s acquisition of AirTran on Frontier in Milwaukee, I chatted with Republic’s VP of Planning and Strategy, Daniel Shurz, about a few of the other exciting things going on at Frontier.

(OK, well, maybe only exciting for plane dorks like me. And most people reading this blog.)

First – let’s talk about Midwest’s cookie, which is now being served across the Frontier fleet, though it isn’t warm on all aircraft. The A320-family aircraft do have ovens, and Frontier is in the process of getting the requisite trays. There’s no date yet for warm cookies on the Airbus fleet, but they’re coming! (The cookies are warm on the E-Jets, as far as I know. I’m trying to find out about the ERJs.)

Speaking of the Airbus fleet, Frontier’s next airplane, an A320, will be arriving in February, and it has yet to be scheduled. The first E190 from Republic’s order this summer will be arriving in July. No decision has been made on if any of those orders should be converted to E195s. Daniel couldn’t disclose the terms of the order, of course, but tells me that they have “pretty liberal conversion rights.”

Photo Credit: Chris Weyer

The airline is starting to plan out its flying for the summer season. This past summer, Frontier launched 10 new routes out of Denver, and their performance has ranged from performing to expectations and “well above” expectations. Daniel noted two examples of strong performers – Madison and Branson. When announced, both routes were to be operated with E190s, but some Airbus aircraft are now being mixed into the schedule.

I also wanted to find out more about the airline’s installation of Gogo inflight wireless internet. Installations are now taking place on the airline’s Embraer 170 and 190 aircraft, and they should be wrapping up in the late part of this year or early next year. I asked about the possibility of the product getting rolled out to the Airbus fleet, and Daniel said it was possible but Frontier wants to evaluate how the product performs on the Embraers first.

Finally – I was wondering about the pricing of a lot of Frontier’s ancillary revenue services. In many cases, the prices are flat, like the $25 fee to upgrade from economy to a Classic fare.

Daniel says tinkering with pricing for an ancillary product makes sense its value changes by distance. For example – the prices for JetBlue’s Even More Legroom and United’s Economy Plus vary by the length of the flight. Right now Frontier has a simple structure for its STRETCH product – free with Classic Plus, $15 for Classic, and $25 for economy.

Daniel says Frontier is “interested” about the possibilities of altering the price of products like STRETCH based on distance, but it’s not something that they’re actively working on. So there are no big changes coming in the near-term.

Catching Up With Frontier: What Southwest-AirTran Means for Milwaukee

Published
by
Dan Webb
on September 30, 2010
in AirTran, Frontier and Southwest
. 6 Comments

On Tuesday morning, I tweeted about what the Southwest/AirTran merger would mean for Frontier. A couple of hours later, I heard from Frontier’s PR department offering me a chance to chat with Daniel Shurz, Republic’s VP of Planning and Strategy. (Three cheers for social media!)

While Daniel’s official title is from Republic, he was with Frontier before the airline was acquired last year, and before that he was VP of Network Planning and Alliances at Air Canada.

Since coming to Frontier, he and his team have had to deal with plenty – a growing third competitor in Denver (Southwest), combining the Midwest and Frontier route maps, and strategically placing the E-Jet fleet that Republic brought to Frontier.

Frontier is no stranger to competing with Southwest, who has grown Denver very quickly – the city only had a handful of flights in January 2006 and is now one of the carrier’s largest operations. Southwest has also overtaken Frontier as the second-largest carrier at Denver in terms of originating O&D traffic – while United continues to hold the top spot.

And the carrier has also faced very tough competition in Milwaukee from AirTran. Southwest started serving Milwaukee a year ago, but the airline has kept its operation relatively small.

So what does Southwest taking over AirTran mean for Frontier?

Daniel said this could be good for Frontier from a cost perspective: “AirTran is the lowest cost network carrier in the country. Southwest’s costs are meaningfully higher….Assuming Southwest’s costs apply, then the costs of the operation increase. In and of itself, it’s easier to compete with airlines that have higher costs.”

One of the big cost questions is labor. Southwest has some of the highest-compensated employees in the business. Assuming all the workgroups successfully integrate, it would be fair to say that AirTran’s labor cost advantage would disappear.

And, obviously, a cost advantage means that Frontier can better survive in a revenue environment with limited pricing power.

Speaking of cost advantages – this is why I think Republic/Frontier can’t get their hands on the CSeries soon enough. If the CS300 can deliver the cost advantage that Bombardier is promising, that will certainly help improve Frontier’s margins.

Another topic of conversation was that of the SkyWest partnership with AirTran – something I have found very interesting lately. But Daniel’s main point was that the current AirTran scope clause allows for this operation, and Southwest’s does not. Depending on how everything shakes out, those destinations might go away if the partnership ends.

Just to provide some history – two of the SkyWest destinations – St. Louis and Pittsburgh – were previously served with mainline aircraft before SkyWest took them over. In addition, the partnership started with five aircraft, but the latest SkyWest 10-Q has it at four CRJs. Hmm.

Daniel also had plenty to say about the products of the two airlines. Naturally, since we’re talking about Southwest here, the topic of bag fees came up. Daniel did note that it’s a bit easier competing with AirTran, since they charge for bags as well.

He then focused on what he thinks is a big advantage over Southwest – Frontier offers more amenities and choices for travelers.

Of course, Midwest’s cookie, which is now being served on all Frontier flights, was brought up.

Daniel mentioned that some passengers had shifted over from Midwest to AirTran due to the latter’s business class offering. (Many of the E-Jets were all-economy with nothing special.) But Southwest will be converting the AirTran fleet to a single class of service, and Frontier now has Stretch seating fleetwide. It’s not first class, for sure – but it is nicer than plain old coach. So that’s an opportunity.

Also on the amenity front – Frontier offers assigned seating, and Southwest says the combined airline will not have it.

And one fee where Frontier wins – same-day changes. Frontier charges economy passengers $50 for a confirmed change. If you’re on a nonrefundbale fare on Southwest – you need to pony up for the full refundable fare, which can be pricey.

Daniel was also pushing Frontier’s Classic fare, which costs $25 to upgrade from economy, and includes two bags, LiveTV, a lower change fee, and some other features.

Bottom line – Frontier has more frills. I get that. Here’s my one problem with that. Customers need to research to figure that out, or it takes a lot of advertising for a company to show off its differences.

Southwest has “Bags Fly Free” down pat, and they’ve been using their large advertising budget to spread that message, which is easy to remember. Personally, I think some of the Frontier advantages are a bit more subtle, and harder to show off in a thirty-second TV spot.

Frontier clearly has their work cut out for them. They already have tough competition at both of their hubs, and one would assume that the Southwest merger has the potential to intensify that further in Milwaukee. The airline might have a nicer product in some areas – but price and schedule remain to be the biggest factors in the purchase decision.

And – looking down the road a few years – things get more interesting for Republic as a whole once some of the existing CPA agreements with mainline carriers begin to expire. But that could be a whole other blog post.

Anyway – thanks to Frontier for this opportunity. I think this post is long enough as-is, so in a couple of days I’ll share some of the other odds and ends that I discussed with Daniel.

(On a side note – Cranky looked into this topic yesterday. Check it out!)

Frontier Lowers Second Bag Fee

Published
by
Dan Webb
on September 20, 2010
in Frontier
. 1 Comment

While I support the ideas of airlines unbundling and exploring ancillary revenue opportunities, I do join the rest of the world in not liking to pay for extra stuff, including bags. So I would like to point out that while bag fees have risen at other airlines – Frontier has reduced its second bag fee from $30 to $20. The move comes after the airline ran a promotion earlier this summer where the second bag fee was $1.

I decided to ask Frontier about the move, and here’s what I heard back:

The decision was pretty simple. First, keeping both the first and second checked bag fees at $20 simplifies things for the customer. It also makes us more competitive with other LCCs.

I agree on both counts – I like how Frontier (and Alaska) charge the same for both bags. It makes the fees more transparent, I thinkk. I’ve yet to find a reason for a $10 spread between the first and second bag fee – I doubt the second one costs that much more for the airline!
As for being more competitive, Frontier’s second bag fee is now in-line with Alaska’s. It’s also lower than AirTran’s after they raised their second bag fee to $25. And the fee is lower than most other legacy carriers. (And, of course, the first tow bags are free on Southwest.) But that also raises the question as to how many passengers use bag fees as part of their purchase decision – and while Southwest has hammered “Bags Fly Free” into everyone’s head with its advertising – do (many) passengers look at the $5-$10 differences?

Not a huge story, but I figured I’d share since it’s a change in the traveler’s favor!

Frontier Falls in Love with E-Jets (Again!)

Published
by
Dan Webb
on September 3, 2010
in Frontier
. 0 Comments

I’ve made no secret of the fact that I really enjoy writing about Frontier, just because I think they’re one of the only carriers doing anything exciting on a consistent basis. I mean – it was only a year ago that Republic beat out Southwest for the airline. And in that timeframe a lot has changed.

The Midwest brand is going away. Airbus aircraft are now in Milwaukee and E-Jets are operating in Denver. A bunch of new routes from both hubs. Not to mention orders from Republic for E-190s (with the option to convert to E-195s) and the CSeries 300, both of which will most likely end up in the branded operation unless there’s a huge change in a scope clause at a major airline.

Anyway, the airline has used the E-Jets, especially the E-190, to launch new cities like Branson, Newport News, and Santa Barbara from Southwest. Places where the E-190 is a good fit, and where Southwest and/or United are unlikely to challenge Frontier.

So the E190 has worked for the airline’s hubs like Denver, Milwaukee, and Kansas City, but now the airline is trying something new – by using the aircraft out of…Omaha?

That isn’t exactly, new, – the carrier is bringing back seasonal service to Orlando and to Tampa (which both launched last year), though service is shifting from Tampa International to St. Petersburg (more on that in a bit).

But what is brand new is service to San Diego and Los Angeles, starting in January and February, respectively, both with flights three times a week. It’s an interesting move – the markets are not that big. Both had about 100 passengers traveling each way per daily in the first quarter (using Consumer Air Fare Report data), so it’s highly unlikely that anyone is really going to try to bother them here. But I’d also have to think that Frontier needs to steal a good amount of traffic from other carriers to make this work. But granted, there are probably days with higher demand than others, and it’s only three flights a week.

And plus, it seems to me that Frontier only needs one aircraft to run this whole operation. Let’s look at February – once Orlando ramps up to five times per week, and Los Angeles starts.

On Tuesday, an E190 leaves Omaha for Orlando at 8:30 AM, and comes back at 3:00 PM, then leaves for LAX at 3:35 PM and is back at 10:30 PM. Then Wednesday is the same, except for St. Petersburg and San Diego with the exact same schedule for PIE and only slightly different times for SAN (but no more than 15 minute difference from LAX).

So, I think this is an interesting move – and I like it. I find a lot of similarities here to Delta’s planned build-up at Raleigh.

Meanwhile – let’s talk about St. Petersburg quickly. I found it interesting. In addition to the twice-weekly service from Omaha, service to Milwaukee that’s currently goes to Tampa will shift over there as well. I found that very interesting considering service from Denver will remain at Tampa, so only the ex-Midwest markets see a shift. I asked Frontier about this and here’s the official word:

We sell far more tickets to Tampa from Denver. Moving the Omaha and Milwaukee service to PIE allows us to test the unique characteristics of that market and capitalize on the close proximity to the beach.

I also wonder how PIE stacks up to TPA in terms of costs.

Anyway, interesting stuff from Frontier as always. To my readers in the US, enjoy the long weekend!

Frontier’s Bag Promotion

Published
by
Dan Webb
on July 15, 2010
in Frontier
. 7 Comments

Yesterday I saw on Facebook that Frontier had launched a new bag promotion, where the second checked bag now costs a whopping $1. No doubt that this is a welcome promotion for some travelers. But I’m trying to find the rationale behind this move.

I mean, Frontier’s not going to say goodbye to a huge amount of revenue – or at least I think that. Not everyone’s checking one bag, nevermind two. But that also makes me think it limits how many people will take advantage of this. Maybe once 3rd quarter 2010 data is out from the DOT (pretty far off) one can make a rough guess as to how many people participate.

But is this a shot just to attract passengers period? Is it a way to make Frontier look better compared to United, who charge  for both, and Southwest, who doesn’t charge for the first two bags?

Don’t get me wrong, this is nice, but I’m just trying to understand it a bit more. Meanwhile, the promotion is effective until September 6. You don’t need to do anything special – that’s the price for everyone.

Of course, elites and those who buy Classic and Classic Plus fares get two bags for free.

A Lot of Frontier News

Published
by
Dan Webb
on July 2, 2010
in Frontier
. 0 Comments

I know I write about Frontier in this space…a lot. But I think they are one of the most interesting stories in the domestic market right now. They just had a bunch of news come out so I figured I’d provide a quick breakdown.

Fleet News

This September Frontier dumping one E-170 and four A318s. All five have found new homes, with three sold and two going back to lessors. In exchange for that the airline will take six A320s in the first half of next year. I can’t say I’m terribly surprised, especially with the A318s, as on a CASM basis they are the worst of the Airbus fleet for Frontier – about 19% higher than an A320. Part of that is stage length, but as mentioned in the Frontier news release, this will help bring unit costs down and ends up increasing capacity. My guess is the E-190, while smaller, can work fine on the routes where the 318s were.

Route Changes

Milwaukee – Atlanta

I was a bit surprised to see this one get cut at first. I did mention in a prior post that Frontier was beating AirTran in the fourth quarter of ’09 on a yield basis, but Delta’s yield was even higher.

Speaking of Delta – it ended its codeshare with Midwest last month. If I did my math right (granted, that’s a long shot :D ), about 40 to 45 people flew MKE-ATL on Midwest and then ATL-Somewhere Else on Delta each day in the fourth quarter. It’s not a huge amount of traffic but that’s enough to fill one of the ERJs Frontier is currently flying down there.

So, the way I see it – AirTran and Delta can justify beefier schedules on MKE-ATL because they have hubs in Atlanta, putting Frontier at a disadvantage, and Frontier lost some codeshare traffic. This move makes sense. It’s probably a bit painful to say goodbye to a route like this one but in the end its probably a smart move.

Denver – Rapid City

Frontier said that Lynx cities would be keeping service (except for Tulsa and Fargo), but I guess this one just ain’t performing. My guess is that from a cost side an E-170 looks worse than a Q400.

Denver – Boise

It’s not going away, but it’s going seasonal. I don’t have much to add on this one.

Milwaukee – San Diego

The new seasonal route is ending earlier than planned. Common sense would dictate that AirTran was performing pretty well here, and Frontier can use that A319 somewhere else. Plus Frontier can still get traffic here via a connection in Denver.

Kansas City – Austin

This, I think, is a very smart addition that used to be served by Midwest Connect and ExpressJet. It’s not exactly a huge market but there’s no nonstop option, and Frontier’s nonstop saves people about an hour compared to connecting itineraries.

Milwaukee – Hartford/San Antonio

These routes follow the theme of a lot of Midwest’s network moves over the past year – rebuilding the network. These were old Midwest Connect routes that are being restored.

Milwauke – Boston/New York/Washington

The three markets will be upgraded to all A319 service later this year. That’s interesting because Frontier started using those A319s out of Milwaukee on leisure routes. Though we have seen the A319 on one Boston flight for awhile.

But Frontier has been seeing higher yields than AirTran, and I guess they see strong demand here. I’m also wondering about this from a product perspective – does Frontier think that business travelers will prefer the A319 over the E-Jet? On one hand the A319 does have a wider cabin, and LiveTV is nice, though the E-Jet lacks middle seats and will be equipped with Wi-Fi soon.

Milwaukee – Philadelphia

All the ERJ-145 flights are going to E-170s. That is a clear product upgrade.

Other Stuff

Frontier is reducing the number of connecting banks in Milwaukee from four to three for the winter. So this will result in a reduction of flights.

Concluding Thoughts

Frontier continues to be very interesting to watch. They continue to find new routes out of Milwaukee that AirTran is unlikely to touch, and they are further optimizing the schedule to hopefully become more financially successful in a cutthroat market. Of course we’ll have to wait a few months to see how it all shakes out, but I like what Frontier is doing here.

Anyway, to all my American readers – happy Fourth of July! I’ll be back in action on Tuesday. I’m already planning out my posts for next week, including my impressions of Virgin America and a quick trip report on my US Airways flights this weekend.

Another Mexican Filing from Frontier

Published
by
Dan Webb
on June 28, 2010
in Frontier
. 1 Comment

A short while ago I wrote about how Frontier is starting to build up its Mexican service again, after it was cut through the company’s bankruptcy. On Friday the airline applied to the DOT for authority to start up a brand new route – St. Louis to Puerta Vallarta once a week on Saturdays. Frontier already flies to Cancun from St. Louis. The new route would be operated with A319s.

In terms of published service, there isn’t much on this route – American used to fly it back in the day. It is on USA3000′s route map but I wasn’t able to book it (but it could be too far out).

But this is interesting. After a domestic ramp-up this year, Frontier is now showing faith in the Mexican leisure market once again.

Hopefully we can see some more entertaining Mexico ads as a result. :D

YouTube Preview Image

AirTran and Frontier Both Get MKE-CUN Rights

Published
by
Dan Webb
on June 24, 2010
in AirTran and Frontier
. 0 Comments

Fortunately, it appears that a regulatory catfight between Frontier and AirTran  has been avoided. Yay!

It all started when Frontier decided to announce last month that it wished to start up service between Milwaukee and Cancun. Like a couple of the routes that I was talking about last week, this one was cut a couple of years ago back when oil was going up to incredible heights and Frontier was dealing with some major financial issues at the time. So it does appear that Frontier thinks those routes can still work out fine since its rebuilding that network.

One important difference, though, is this time around this route could work a bit better as now Frontier has the Midwest network to connect to that flight.

Anyway, the airline was planning on seasonal service with with between one and tree weekly frequencies depending on the time of the year. All of the routes would be operated with A319s. So that’s all fine and good, but then on June 7 AirTran decides to step in and announce year-round service with 737-700s. Service would range from one weekly to daily service. I think this kind of illustrates how aggressive AirTran has been in Milwaukee.

Then we see some drama unfold between the two airlines. (You can check out each docket folder to see: click here for AirTran’s and here for Frontier’s.)  The source of said drama is a discussion of how many route authorities that are available actually exist. According to the United States’ current agreement with Mexico, only three US carriers can be flying the route. Most recently, Delta, Sun Country, and USA 3000 have the authority, and Frontier argued that those airlines should lose the right to fly the route since they haven’t flown it in awhile. (Or, to use the technical term, the service is “dormant.”)

DOT said that only Delta and USA 3000 still have authority, and the latter has given notice that the service is dormant, so both carriers will get to fly the route.

I’m very interested in seeing how the schedules turn out there. Frontier is planning to get started this December, while AirTran has said their service would start around April 1. Airtran’s schedule, with occasionally daily service, does seem like a lot of capacity, especially with another carrier onboard. Part of me thinks that AirTran wanted to show higher frequency than Frontier when it was thought that only one carrier would be allowed to fly the route, and perhaps the schedule might help their case.

So we’ll see how that all pans out. But I think this argument over one route shows how cutthroat things are in Milwaukee.

Say Hello to the First Frontier ERJ

Published
by
Dan Webb
on June 22, 2010
in Frontier and Republic
. 5 Comments

A few days ago, photographer Paul Kanagie snapped a couple of photos of the first ERJ in Frontier colors at Philadelphia. It’s operated by Republic-owned Chautauqua. He kindly gave me permission to use them here. (Thanks, Paul!) Click on either photo to enlarge.

There have been ERJs running out of Milwaukee for Midwest for a short while now, operating as Midwest Connect. These replaced the SkyWest CRJs, which replaced the Skyways Dorniers.

I really enjoy this livery, and like how the slogan moved over from the fuselage to the tail-mounted engines. The animal featured on the tail is Luke, a lynx kitten. I point that out because that’s the same animal found on N501LX, a Lynx Q400. I know this is a dorky, nitpicky thing, but I’m not sure if putting that animal on an ERJ while the Lynx Aviation division is being shut down is the best idea.

On a side note, Philadelphia is one city where you can easily see the benefits on integrating the Midwest and Frontier networks. Let’s say I’m a really loyal Frontier flier, and I’m looking at options for getting back to Denver from Philly. Well, Frontier only has one flight a day at 5:45 PM, so I’m kind of out of luck if I want to leave earlier. But now with the integration of the Midwest network I can leave for Denver in the morning with a Milwaukee connection.

Looking at Midwest/Frontier and AirTran in Milwaukee

Published
by
Dan Webb
on June 14, 2010
in Frontier, Midwest and Republic
. 1 Comment

So last night, I decided to play around with the DOT O&D data to take a look at Milwaukee – specifically those flying on nonstops departing from the airport. Republic has said for awhile that they (Midwest) have had a revenue advantage over AirTran when it comes to Milwaukee.

After playing around with the data a bit, I felt it would be best to take a look at the largest high-yield markets. My own definition of large in this case is a market with over 10,000 O&D passengers in one quarter. I also only looked at nonstop flights originating from Milwaukee.

One can see that Frontier/Midwest indeed has maintained a revenue advantage in some of the large business markets like Washington, New York, and Boston. Though if we look at some other markets, like the Florida routes and Vegas, the two carriers are very close. So I’d suggest that Republic has held on to some brand loyalty for now, at least for business travelers. I’m not really surprised that the Florida and Vegas routes are pretty close – these are probably travelers who are more price-sensitive.

But it does seem that Republic still has a revenue premium. The question is how long they can hold on to that.