Category Archives: Frontier Airlines

Frontier Airlines Sold to Indigo Partners

Republic Airways has sold Frontier Airlines to Indigo Partners for about $36 million plus some debt, putting the total value of the deal at about $145 million.

And now a quick Q&A about this:

What is Indigo Partners?
Indigo Partners is an investment firm run by Bill Franke that invests primarily in low fare carriers around the world.

Who is Bill Franke?
Franke was the CEO of America West from 1993-2001 back before it became one of the unheralded success stories in the industry. For you airline nerds, he was the CEO after they decided that flying Phoenix-Nagoya on a 747 was a great idea and before they brought in Doug Parker.

Is this good news or bad news?
Like it or not, Indigo helped turn Spirit into one of the few financial success stories in the US airline industry. Franke resigned from the Board of Spirit Airlines this summer, I would assume in anticipation of purchasing Frontier. They’ve also had success with Wizz Air in Hungary, Volaris in Mexico, and Tiger Airways in Singapore. Although everyone and their mother thinks they can run an airline, this team has, for the most part, has shown that they can.

What changes can we expect with Frontier?
I think one of the key lessons we’ve learned about the airline industry in the US is that either you are 100% a low cost carrier, or you’re not. Spirit and Allegiant do not half-ass the low cost thing – they have been innovative (again, whether you like it or not) in ways to drive down costs and derive more revenue from customers. Lots of airlines have tried to do this, but they were not willing to go all the way. Frontier has made positive steps in this direction (well, positive from a revenue standpoint – I’m sure customers have been complaining), making their cheapest fares most easily available on their own website, for example. But we can expect more ancillary charges, likely a reduced presence in their current hub of Denver, and more experiments with tertiary markets like we’re already seeing in Trenton and Wilmington (DE).

Hm, that strategy sounds familiar…
Yes, it sounds like Spirit. Frontier has seen some success moving toward a Spirit-like model, and I expect them to have even more success when they hammer that home. I’m sure nobody will like the additional fees, but, like with Spirit, they will pay them, and if they can get their operational costs down, the investors will love them. Spirit and Allegiant have shown that flexibility is enormously important – these so-called ultra low cost airlines need to be willing to try new routes and quickly pull out of the ones that don’t work. Tiny airport authorities hate that, but if they can’t get passengers on planes for the 2x/week flights to Orlando, no airline will stick around for years trying to make that profitable. Frontier will find more Trentons and Wilmingtons, find less need to be in Denver, drive up fees, drive down fares, and I bet in 2 years we’ll be looking at a success story.

Turns Out Frontier Customers CAN Get Free Bin Space and Frequent Flyer Miles When They Book with a Travel Agent

Frontier Airlines received a fair amount of media attention from a press release they put out a couple of weeks ago saying that the only way to earn full frequent flyer miles on coach tickets and NOT have to pay to use overhead bins is to book with Frontier Airlines’ website.

Last year, Frontier put out a press release saying that the only place to purchase their Classic and Classic Plus fares was on their own website.

Turns out, neither of those things is true (thanks, Travel Weekly).

Travel agents are able to book both Classic and Classic Plus fares for their clients. And they’re able to book the fares that allow for full frequent flyer credit and free overhead bin space.

The airline created a new fare type called “Basic” that is only available in the GDSs used by travel agents. It’s 10 cents cheaper than the Classic fares, but it does not come with full frequent flyer credit or free overhead bin space. And because it’s 10 cents cheaper than the Classic fares, it’s the default fare that comes up on a GDS when an agent searches a fare on Frontier. Pretty tricky. Agents are able to book the Classic fare (earning full credit and bin space) for their clients, but it apparently involves a bit of a workaround.

Said a Frontier rep about the misleading press releases, “The press release last week and the one in September were meant for the general public who book through third-party sites, not for travel agents booking through a GDS…”

That is just nonsense.

18% Off (Just About) All Frontier Airlines Flights — Expires Tonight

Frontier Airlines is offering 18% off all its domestic flights (except to/from Alaska) if you book by midnight tonight (July 5th) and enter Frontier Airlines promo code BIRTHDAY18 at checkout. Offer is good for travel July 24 – November 14.

Southwest Will Match the Number of Frontier EarlyReturns Miles In Your Account (If You Live in Wisconsin)

The battle for Wisconsin continues: Southwest Airlines said it will match the number of Frontier EarlyReturns miles you have in your account (up to 50,000) if you live in Wisconsin. In addition, if you have Ascent or Summit Status, they will match it with AirTran A-List and A+ Rewards Elite Status. With Frontier basically pulling out of Milwaukee, the fight is on for their frequent flyer members.

From their release:

To take advantage of this one-time offer, Wisconsin EarlyReturns members should take the following steps:

If they haven’t done so already, enroll in the Southwest Airlines Rapid Rewards program.
Submit a copy of their Frontier EarlyReturns statement that denotes their current account balance along with their name, Rapid Rewards account number, and phone number to RapidRewards@wnco.com.

To take advantage of this status-matching offer, EarlyReturns Ascent and Summit members should take the following steps:

If they haven’t done so already, enroll in the Southwest Airlines Rapid Rewards program and the AirTran A+ Rewards program.
Submit a copy of their current, valid tier card or statement along with their name, Rapid Rewards account number, A+ Rewards account number, and phone number to RapidRewards@wnco.com.

Frontier Moves to Houston Hobby

Just a quick one:  On November 18th, Frontier is going to move from Houston Bush Intercontinental to Houston Hobby airport.   Just thought you’d like to know.

A Look at What 2009 Will Bring to the Airlines

I figure January is a much better time than December to look into the patented OTR Looking Glass ™ to pull predictions out of my ass (er…closely analyze the airline industry) to see what the next year is going to look like.  My thoughts:

- Wi-fi, Wi-fi, Wi-fi.  Wi-fi will be widely available on US airlines this year and it will change flying for business travelers.  I expect it will be priced to keep out the casual e-mail checker, but for business travelers it will be a game changer.  This is exactly the opposite of how I used to feel (I think I’ve mentioned this before), but I used to think the airplane was the last cone of solace for business travelers.  I’ve come around on this because of that sick-to-your-stomach feeling you have after a 5 hour flight when you know you have about 128 emails you have to catch up on (this feeling deserves a name – feel free to suggest in the comments).  Eliminating that feeling is well worth $12.95.

- Airline fares will be decoupled by the end of 2009.  The airline fare system will look like Air Canada’s by the end of the year, where you will simply be buying a seat on the plane, and you will add luggage, seat, wi-fi, food, frequent flyer miles, on top of that base fare.  You think you hate it, but you’ll grow to like it.  I promise.  It’s actually fair.  I’ve flown Spirit a couple of times recently, and they’re trying something along those lines, and I appreciated paying next-to-nothing for the flight and I wasn’t that annoyed by the ridiculously priced $3 soda. (Why the soda for $3 is ridiculous but I don’t complain about the $2.50 soda in the terminal is a mystery to me, too.)

- Airlines will be quicker to launch and pull back service than ever before.  Allegiant has made this a hallmark of their strategy – try something and if it doesn’t work, stop flying there.  Imagine that.  We’re starting to see the majors trying the same thing (or even canceling before launch, as Delta has done with Raleigh-Paris and others).  Which brings us to:

- More international destinations, with a caveat.  We’re going to see more airlines taking the Continental/Delta approach to international travel and flying right-sized planes to secondary destinations.  Delta’s very, very interesting Cape Verde mini-hub strategy will be closely watched:  can you open a hub to serve out-of-the-way destinations.  I’m not sure how many other opportunities there are for this, but the Azores could handle a similar 757-based operation for somebody willing to cherry-pick African flights.  Oh, the caveat:  many of these flights won’t be around for long, as airlines quickly pull back when things aren’t working and re-deploy.  For every Gothenberg, there’s another Budapest waiting for service.

- Increased service to the Middle East.  Yes, Delta just pulled back on their 2nd service to Tel Aviv.  But they’ve launched Kuwait and Amman.  Look for others to saturate the region, especially Oman, which is a more interesting tourist destination than Dubai

And finally,

- We won’t lose any major US carriers this year.  No, it’s not looking great over at Frontier, but they’ll survive.  And Allegiant will continue to be the best story in airlines nobody is talking about, as they continue their smart strategy of staying out of the way and upselling.

I’m interested in hearing your predictions…please comment below.

Frontier to Charge $75 for Same Day Standby (That’s an Improvement…)

Frontier Airlines announced that it will now charge $75 for same-day confirmed standby. This is an improvement over the old system, where you paid the difference in fare (ie, the Southwest Airlines policy), which was typically more than $75. Though it’s worse than the system most airlines used to have where you could just fly standby for free. If you’re a Frontier flyer, this is probably good news for you.

A Quick Update on the Airline Apocalypse

I thought it might be useful/depressing to pass along a quick overview of the horrible/annoying/depressing things we’ve seen happen since the fuel hike:

Northwest/Delta merger (less service + higher fares = unhappy flyers in Minot)

American’s $15 first bag fee

Everyone else’s $25 second bag fee

US Airways removes snacks from domestic flights

American cuts domestic capacity 12% and decimates San Juan hub

Eos, MAXjet, Aloha, Skybus, Champion and ATA shut down.  Mesa, SilverJet and ExpressJet poised to shut down.

jetBlue defers 21 a320s

jetBlue defers launching LAX service

US Airways, after begging for China route, begs to delay Beijing launch

$100 antler fee on Frontier (damn you, Frontier!)

Return of the Saturday Night stay

Airlines attempt to raise fares 16 times.

Ticket changes cost $150.

And there you go…the state of the industry. I’m going to bed.

Frontier: Those Antlers Are Gonna Cost Ya

(Thanks to IAH-PHX for passing along the best story of the week)

Frontier has updated their list of fees they charge for various things (checked bags, unaccompanied minors, antlers) and they…um…wait. Did I just write “antlers?” Yes I did. Those bastards at Frontier are going to charge me $100 to send my antlers on the plane. The old $75 fee was fair. Now, they expect me to pay an extra $25 to bring my antlers. What am I supposed to do, leave them at home? Not travel without my antlers? But what if I find myself in a situation, as I do frequently, that requires antlers. Then what am I going to do? Go antler-less? I don’t think so. That doesn’t really sound like an option.

So I’m going to have to try to squeeze my antlers into the overhead bin, which would be fine on a 767 with nice overhead bins, but Frontier only flies narrowbodies, so that’s not a real possibility. And they don’t fit under the seat in front of me – not my antlers, anyway. Perhaps your antlers do, I dunno. So I’ll have to sneak them into my carry-on luggage, which is already chock-a-block with 3.7 oz tubes of contraband antler cream – I’m not sure it’s really going to fit in there.

One thought is to buy the antlers a ticket and send them as an unaccompanied minor (the fee is only $50), which is interesting, since Frontier seems to assume that the safety of my antlers are worth $50 more than the safety of my kids (which, depending on how much screaming they were doing that morning, may be true). Frontier had a pet-in-cabin fee, but they’ve apparently eliminated that. But what if you only have the antler part of the pet? Is that the whole pet? Would they have charged me the whole amount? Who knows. All I know is this: my antlers are getting a frequent flyer card on some other airline, because they’re not going to put up with this nickel and diming any longer.

Oh deer.

AirTran: We Are Not a Bankruptcy Risk

(Thanks to longtime reader IAHPHX for the heads up on this):

AirTran’s stock collapsed by about 1/3 on Friday after Frontier announced its bankruptcy and caused unfounded speculation that AirTran would face a cash crunch.  As IAHPHX points out, AirTran actually has one of the strongest financial positions of any carrier, and the airline put out a press release basically saying that.  Shares rebounded in after hours trading, but it just goes to show how far reaching this mess has gotten – even the solid airlines are now getting hit.

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