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Is Frontier Airlines’ Model The Wave Of The Future?

Posted by bvalaw on September 4, 2014

What does the future air carrier look like? Frontier Airlines, based in Denver, has placed its eggs in the “ultra low cost” basket. It’s not the first airline to do so and probably won’t be the last. But, the question is whether it will work, and only time will answer that question.

The term low cost carrier, which originated in the airline industry, refers to a carrier with a lower operating cost structure than its competitors. Traditionally this is accomplished by eliminating many of the usual passenger services that we’ve all come to expect. It is also accomplished, for example, with a standardized fleet of aircraft, which leads to decreased training and maintenance costs, and increased direct sales through the internet. Maintaining a high passenger load is key.

In the specific case of Frontier, it included switching to a two-tier fare system earlier in 2014: (1) economy; and (2) cost plus. Basically, like other low cost carriers, Frontier lowered fares, but eliminated the products and services that sometimes come along with that. They have an a la carte pricing system for customers who want something more. Customers who don’t want that don’t pay a higher fare.

But, at a time when many of the legacy carriers are charging extra for everything from baggage to more legroom to sitting in an aisle or preferred seat, a close comparison of what consumers ultimately are paying is necessary. Whether this is the wave of the future remains to be seen. But, Frontier flew a ton of routes in August 2014, so someone must think it’s moving in the right direction.