Frontier’s Big City Move
The ULCC will go after higher revenues as it expands in America’s largest markets.
When Frontier announced a slew of new routes from major airline hubs in December — a departure from the lower cost airports preferred by former network czar Daniel Shurz — it was tempting to interpret it as the beginning (or the rekindling, if you prefer) of a battle with the Big Four, or as a fiery response to Spirit, its closest ULCC competitor, which long has preferred trunk routes.
Both explanations are plausible. But on Tuesday during Frontier's fourth quarter earnings call, CEO Barry Biffle framed it differently. Frontier, he said, has been struggling to persuade leisure travelers to visit Orlando and Las Vegas, two markets that last summer accounted for more than 1/3 of the airline’s capacity.
With competition fierce, Frontier needed to chase revenue elsewhere, Biffle said, and so it will focus on connecting larger cities. In these markets, fares have held up better, particularly among VFR travelers Frontier hopes to win. "These are significantly higher-priced markets than we're in today," Biffle told analysts.
Biffle’s comments came roughly five months after the CEO promised big changes following Frontier’s surprising $32 million third quarter net loss. Last September, Biffle said Frontier had flown too summer capacity on oversaturated leisure routes.