knope2001

--On Frontier's plans for MKE
I wouldn't put too much stock in exact specifics released in the quarterly report or conference call regarding the sub-99 fleet because (a) they gave contradictory info (IIRC used the number five in one place and the number ten or less elsewhere, and (b) they change their plans a great deal.

That having been said, it's virtually certain that sub-99 seat aircraft will be somewhere in the 0-5% range of total branded capacity. But for MKE it makes a big difference if that small number of sub-99 seat aircraft are ERJ in Milwaukee or if they are Q400 in Denver. So...I guess it comes down to the latest conf call and quarterly info doesn't tell us either way what will happen. The January schedule already loaded has this for sub-99 seat flying

2 Q400 lines
4 ERJ lines
2 ER3 lines which only do the two sibsidized routes and sit idle the rest of the day

With the ER3 subsidized routes going, that leaves six lines of sub-99 seat flying without any further cuts. But that only tells us that they could meet what they are projecting to do without further change. That doesn't mean it's what they will do, nor that they won't change (or fail to meet) their target.

Of course MKE's near-term future with F9 doesn't only rest on the fate of the RJ, but it's about half the remaining departures with the January schedule.

factory81

Does this explain why my flight that I purchased for $424 costs $1150 now? I see only like 2/3rd the plane sold as well.

MikeFromMKE

I'm not sure what explanation you were looking for, but this might be an example of the new pricing model they are trying to implement, where prices vary (via a calculation instead of someone setting it manually) based on demand on the specific flight you are viewing.

Be glad you got the $424 I guess.

piotrkol1

When FL was pursuing YX in that hostile takeover attempt a few years back most people said that YX's shareholders were loyal, but then once FL upped the offer the majority of the shares were tendered anyways. They're just in it to make a quick buck.

volvo99

Virgin is a paper airline already -$600M in the hole based on warrants and debts to the ownership group. Where would they get the cash for this, much less merge a semi-union workgroup into a vastly different culture? Additionaly, upgrading F9 aircraft into the VX cabin standard would siphon away precious capital when they could least afford it.

What would B6 bring to the table? Their stock is not exactly robust, there is some change in the CFO's chair and the status of LH's investment in them is in question. Is a mid-continent/western hub really an answer to their prayers?

For Spirit, this would mean abandoning their focus city approach they currently have in favor of starting a hub and spoke operation. Denver is overly dependent on the connecting passenger; it's population and corporate HQ footprint is smaller than Chicago, Dallas, and Houston. Due to location and demographics, it has a dearth of international destinations served nonstop as well as a small number of air carriers serving it relative to the volume of traffic. Which means Spirit would need to compete with much larger network scaled rivals, all enjoying massive advantages in economies of scale.

volvo99

No different than any other investor these days who invests in airlines, commercial paper, or gold.

8C4IOW

Maybe the same investors that Spirit have will invest in Frontier. Bedford has said he is not interested in selling to an airline but would welcome private investors. He has also said he wants to move Frontier into an ULCC. Code sharing with each other along with Frontier's and Spirit's Airbus order they will both be a more efficient airline.

volvo99

ULCC would be a viable option for several reasons:

*A true product differentiation from the other incumbent carriers in DEN.
*No overlap with the other ULCC in the country, Spirit.
*Repositioning the Frontier brand into a ULCC would lift them of the burden of serving the type of markets and offering the level of service they currently do.

iansltx

Sounds about right. FWIW there *is* another ULCC in the US (Allegiant) however their model is very different even from Spirit's. On the one hand you have an air carrier that wants to cram tons of seats into modern aircraft for fuel efficiency's sake, with advertising everywhere and relatively frequent flights with some serious hub-and-spoke action going on (e.g. FLL). On the other you have an airline that has slightly more room in older aircraft that are cheap to buy, so utilization can be lower, serving only leisure markets at low frequency.

I would guess that Frontier would adopt the Spirit model rather than the Allegiant one, since they have new planes.

JerryFF

Our company has a policy of flying the least expensive carrier for a given itinerary. The only exception is Spirit. No one is required, or expected, to fly Spirit. They are the EasyJet of the U.S.

iansltx

Correction: they're the RyanAir of the U.S. EasyJet has some class.

volvo99

That is where the similarities end. RyanAir is quite profitable and has done a good job of explaining the value proposition of flying 50 kms. out of town to save a nickel. Frontier is just trying to survive.

volvo99

The same investors in Spirit, Indigo Partners, also invest in mexican ULCC Volaris, which has done an admirable job in the absence of Mexicana Airlines and achieved a marketing agreement with Southwest.

It is fair to say that the LCC model will/has further morphed into another iteration: that of the ULCC. For better or worse, the Ryan Air model is here to stay. Web based GDS distribution systems favor the carrier with the lowest base fare despite unbundling of the total cost to the passenger, passengers have accepted the reality of ancillary fares, even from Southwest with their monetizing of early boarding, and the retreat and consolidation of the legacy carriers means that passengers are finding competitive fares even in primary hub markets, and not have to travel to satellite airports as in the past, as ULCC and LCC enter fortress hubs like ORD and DFW. DEN is not immune to this, and such an environment would be welcome by passengers who otherwise might be held hostage by a duopoly of UA and WN.

DenverBrian

JetBlue's an interesting option. It would give B6 a major hub in a city where it currently has two destinations, none to the west.

The A319s and A320s would be a mechanical fit, though I'd imagine some expense at re-covering all the Frontier green leather seats with B6 blue. In-seat TV would be aligned. Stretch seating aligns with EML.

volvo99

No reason why B6 would want to invite organized labor on property by absorbing F9. And why would B6 invest in a hub to begin with? Hubs are costly in terms of operating expense and manpower to maintain, and it would be competing in DEN with much larger airlines that have more robust networks, FF programs and corporate accounts.