The consulting firm of Duff & Phelps has filed suit against Frontier Airlines, alleging that the Denver-based airline used information garnered by the consultants to recover millions of dollars while paying them nothing. According to the lawsuit, Duff & Phelps claim to have alerted Frontier of its overpayment of $2.5 million in incorrectly filed taxes. Frontier then allegedly used the information to fix and file the taxes without paying the consulting firm. Frontier denies the allegations.
Frontier has had its share of troubles the past several years: In November 2014, The Denver Post reported that Airline CEO Dave Siegel wrote a letter explaining the company’s decision to reduce staff and flights through Denver. Siegel said that Frontier’s tax burden has “doubled in the last two years and [Denver] airport landing fees are up 30 percent over the past three years. The cumulative effect of these increasing costs is that connecting traffic is no longer profitable for our airline. We are also faced with escalating taxes and airport charges at Denver International Airport, where operating costs have risen faster than any other major U.S. airport over the past decade.”
Frontier was purchased in 2013 by Indigo Partners LLC and overhauled in 2014 as an ultra-low-cost airline. While some see the benefit in the new structure, it hasn’t caught on with all travelers. This type of structure relies on traveler loyalty, especially important in a hub city.
According to Colorado Public Radio, the current case against Frontier is pending in a Denver court.
[Photo: David Zalubowski/AP]