The Frontier Effect
 

I found the following information about northern Michigan May passenger loads interesting. As has been mentioned in another thread MBL saw 431% growth over the previous year with the introduction of F9 service. Where did the 2500 additional passengers come from?

A reasonable expectation would be that Manistee's gain would come at the expense of the next nearest airport TVC. Especially as TVC has high fares with no LCC present. But if you look at the data you see something very different. From January through April TVC traffic was essentially flat(+0.3%) as compared to the previous year. However in May TVC saw an increase of 11.9% (21523 to 24080) vs the previous year. You can also see the same thing at the other northwest Michigan airport PLN; flat Jan-April (-2.6%) then 14.7% growth in May (2837 to 3254).

Why is there suddenly growth in passenger numbers for all three of these northwest Michigan airports beginning in May? I attribute it to the "Frontier Effect" (no reason WN should have a monopoly on the term). The entrance of an LCC into a region has likely lowered fares at the nearby airports stimulating demand throughout the region.

Mike Boyd gave a presentation last month in Traverse City were he claimed that the region was suffering 60% leakage to downstate airports in GRR, FNT, LAN and DTW. Is it possible that Frontier has positively impacted all airports in the region?

There is a lot of conjecture here based on one month's worth of data, but I can't think of any other explanation for the simultaneous growth at all three airports.

Here’s where I think the Manistee growth came from:

--People who normally would have flown out of TVC, MKG, GRR or FNT
--People who normally would have driven and not flown
--People who would not have taken a trip but decided to based on the low fares

Those last two items are true traffic stimulation, and I believe Frontier's presence and low fares are the trigger. What I don't know is if that stimulation was repsonsible for 15% of the growth of 75% of the growth.

Why did Pellston and Traverse City also see traffic increases? Well, I don’t think that airlines in TVC matched Frontier fares, and PLN is a 2-3 hour drive away from MBL and I doubt they saw lower fares, either. I’d guess that the whole pie in N/NW lower Michigan is growing based on the economic recovery.

Manistee’s growth, however, is not primarily based on the improved MBL economy, but on retaining local traffic and stimulating local demand with fares.

I wouldn’t expect TVC to match Frontier introductory fares out of MBL for new service, because the airlines in TVC didn’t know having good Manistee service would affect their traffic. Even if a lot of MBL passengers normally used TVC, that TVC’s total traffic was up nicely suggests they are not feeling the heat from Frontier, and that they’ll keep their fares high. That can only help Frontier in Manistee.