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Repositioning Frontier Airlines by Steve Robinson
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Repositioning Frontier Airlines |
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Travel & Tourism
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Frontier Airlines enjoys a reputation for offering cheap airplane tickets and cheap vacation packages. Republic Airways Holdings, which owns Frontier, wants to reposition Frontier into an airline that more closely resembles Spirit and Allegiant Airlines. The goal is to continue to offer cheap fares but charge for extras. Differences between Frontier and Spirit or Allegiant include that only Frontier does not charge for booking a trip by phone. Spirit charges unique fees for passengers who carry-on bags that will only fit in overhead space and for having airline employees print boarding passes. Frontier is the only of the three airlines to offer reclining seats, 24 hour satellite TV, and extra legroom in its economy section. Sprit and Allegiant derive much, if not all of their profits by charging fees for extra perks and for services that used to be bundled into the price of the ticket. Frontier has been largely a money loser for Republic since it purchased this airline three years ago. Although Frontier has steadily lost money, it had almost an $8 million pretax profit the fourth quarter of 2011 vs. losing over $11 million in the same quarter the year before. Experts regard Frontier’s fourth quarter financial performance as positive but do not believe that a single quarter necessarily suggests a turnaround in the airlines future profitability. Republic is looking to either sell Frontier or spin the airline off as a separate entity. Sustained profits on Frontier’s part will likely be needed before this can be accomplished.
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