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Frontier Signs LOI for 80 A320NEO

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Old Jun 22, 2011 | 8:04 pm
  #16  
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Originally Posted by belfordrocks
Can the NEO's hit DEN-Hawaii?
Yes, it will able a possible to flying DEN-Hawaii with ETOPS overwater by FAA certifications.

Originally Posted by Stumblefoot
While I would love to see this happen, I can't imagine that F9 would begin DEN-HNL service, especially if the rumors about Southwest starting major inter-island service come true.
I couldn't agree with you anymore! Where did you hear this? I thought WN didn't announce to Hawaii a while ago. Surely, why not? It will have more tougher competitive against HA & Go!. I can't imagine why WN is going to Hawaii right after when the 738 to come online. If they will launched it when the 737-800 is accept delivery.
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Old Jun 22, 2011 | 8:07 pm
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Has Republic stated that the C-Series will be flown by Frontier? Looking back at the press release it doesn't say anything about Frontier, while the press release for the NEO states it will be flown by Frontier.

My guess is that they will keep both aircraft, NEO will be on Frontier books and the C-Series will be on the Republic books. Republic will fly the C-Series for Frontier; by then they will minority owners of Frontier which they will be able to persuade the controlling owners to allow them to be able to do the contract flying for Frontier with the C-Series.

C-Series press release:
http://phx.corporate-ir.net/phoenix....414&highlight=

BBD with pic in Republic colors
http://www.bombardier.com/en/corpora...01260d800ef7e5

NEO Press Release:
http://finance.yahoo.com/news/Republ....html?x=0&.v=1
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Old Jun 22, 2011 | 9:03 pm
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Originally Posted by 8C4IOW
Has Republic stated that the C-Series will be flown by Frontier? Looking back at the press release it doesn't say anything about Frontier, while the press release for the NEO states it will be flown by Frontier.

My guess is that they will keep both aircraft, NEO will be on Frontier books and the C-Series will be on the Republic books. Republic will fly the C-Series for Frontier; by then they will minority owners of Frontier which they will be able to persuade the controlling owners to allow them to be able to do the contract flying for Frontier with the C-Series.
They did mention the CSeries would have STRETCH but you are very right that it doesn't make a mention of who will operate them. I definitely think the ownership of those birds will probably remain at Republic, but I wonder if they would "lease" them to the F9 side at little cost. I guess something like that would be determined by politics and the pilots union at the time they are ready to come online (after RJET is supposed to have a minority stake).
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Old Jun 22, 2011 | 10:37 pm
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Originally Posted by BlueHorseShoe2000
An internal Republic employee memo stated that the C-Series order is still exists but I wouldn't fall over in shock if it gets cancelled or converted to something else.

Keep in mind that today's order along with the C-Series announcement last year doesn't mean that Frontier will actually take delivery of all of these aircraft. They could very well sell the production slots to other airlines, sub-lease aircraft, etc. I believe Republic secured very attractive pricing/financing on all three aircraft types so these orders could be very valulable in the future.

While MikeFromMKE is correct that some of these planes will be used to backfill aircraft being removed from the fleet in the coming years, this new order (along with the C-Series) still represents an enormous amount of new capacity for Frontier to work with. There are lots of interesting possibilities for where this capacity can be deployed.
The bolded part is really the only relevant part at this point. F9 can't even find a home for its airplanes now, and yet they're going to more than double their fleet size going forward? And WN and UA are going to what, sit back and do nothing?

There's a reason this is a letter of intent and not a firm order. There's a mighty big difference.
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Old Jun 23, 2011 | 12:06 am
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Maybe a tatl hub in te north east probably pvd or pwm? If the neos have the range to fly to Europe then maybe this might work.
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Old Jun 23, 2011 | 7:00 am
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Originally Posted by MikeFromMKE
Where do they expand to then? While I am sure there are plenty of opportunities here and there, it is hard to find a decent domestic market not already dominated by WN or one of the majors.
There are definitely opportunities out there for another focus city. A few years back Midwest was looking at establishing another base of operations outside of MKE and MCI but they never got that far due to obvious reasons.

For speculation, here is my list of 10 cities where Frontier might have an opportunity to create a small focus city/connecting operation. Any attempt at another focus city would require Frontier to dedicate time and resources (aircraft, money for proper marketing, etc.) and should only be undertaken once existing opportunities in DEN, MKE, and MCI have been maximized.

1) Sacramento
2) Austin
3) Pittsburgh
4) Richmond
5) Greeneville/Spartanburg
6) Birmingham
7) Jacksonville
8) Ft. Myers
9) Columbus
10) Portland (PDX)

Hartford and Raleigh would have been on my list but since Frontier recently pulled the plug on both I decided to remove them.

Each has their pros/cons. For example, on paper AUS looks like it would be a very desirable focus city but it has been a tough nut to crack for airlines.

I do think we'll see Frontier begin to focus more on Mexico and the Caribbean in the future. However, there are still good opportunities to exploit in DEN and MCI. Frontier will also have to decide what role MKE will play in the future and just how aggressively they will pursue certain markets.
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Old Jun 23, 2011 | 8:46 am
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Originally Posted by FreequentFlier
The bolded part is really the only relevant part at this point. F9 can't even find a home for its airplanes now, and yet they're going to more than double their fleet size going forward? And WN and UA are going to what, sit back and do nothing?
I'm pretty sure the current fleet utilization is pretty high at this point. In fact, that is a reason for a number of the cutbacks (particularly OMA), because the planes coming from Embraer were delayed due to the tsunami. By the time these birds (120) are supposed to come online, the fleet will be around 100 planes (unless something major happens), so while there will be expansion, they aren't doubling the fleet size.

Originally Posted by BlueHorseShoe2000
There are definitely opportunities out there for another focus city. A few years back Midwest was looking at establishing another base of operations outside of MKE and MCI but they never got that far due to obvious reasons.

For speculation, here is my list of 10 cities where Frontier might have an opportunity to create a small focus city/connecting operation. Any attempt at another focus city would require Frontier to dedicate time and resources (aircraft, money for proper marketing, etc.) and should only be undertaken once existing opportunities in DEN, MKE, and MCI have been maximized.

1) Sacramento
2) Austin
3) Pittsburgh
4) Richmond
5) Greeneville/Spartanburg
6) Birmingham
7) Jacksonville
8) Ft. Myers
9) Columbus
10) Portland (PDX)

Hartford and Raleigh would have been on my list but since Frontier recently pulled the plug on both I decided to remove them.

Each has their pros/cons. For example, on paper AUS looks like it would be a very desirable focus city but it has been a tough nut to crack for airlines.

I do think we'll see Frontier begin to focus more on Mexico and the Caribbean in the future. However, there are still good opportunities to exploit in DEN and MCI. Frontier will also have to decide what role MKE will play in the future and just how aggressively they will pursue certain markets.
AUS has considerable service from WN, AA, and JetBlue. In my post I was referencing SAT, where only WN has a significant number of nonstops, and it is the 7th most populated city in the US. I know United tried a hub/focus city there once but I have no idea how that turned out. I think JAX might be an interesting option for a Southeast connecting point.
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Old Jun 23, 2011 | 9:21 am
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Originally Posted by BlueHorseShoe2000
For speculation, here is my list of 10 cities where Frontier might have an opportunity to create a small focus city/connecting operation.

1) Sacramento
2) Austin
3) Pittsburgh
4) Richmond
5) Greeneville/Spartanburg
6) Birmingham
7) Jacksonville
8) Ft. Myers
9) Columbus
10) Portland (PDX)

Hartford and Raleigh would have been on my list but since Frontier recently pulled the plug on both I decided to remove them.
Republic/F9 will not be successful anywhere until it aligns itself with a major loyalty program. Could F9 be positioning for an acquisition?

http://www.bloomberg.com/news/2011-0...le-planes.html

If I'm AA, I realize consolidation is essential. I don't want to have anything to do with US. AS is successful on their own (not looking to merge) and doesn't offer any value (N-S network, no TPAC). Getting in to the DEN market is risky, but if I am in fact considering bringing Airbus on the property, and RAH offers F9 assets for "cheap," F9 may be attractive. JetBlue has lost its glamor as well, and additional market share in NYC may be something I'm interested in by purchasing B6.

Mergers / acquisitions are difficult. Two mergers / acquisitions are even more painful. Speculation: look for AA to acquire either B6 or F9. F9's LOI with Airbus may be a strategic move to attract a buyer, especially considering the C-Series order. 160 new airplanes doesn't make sense. F9/RAH is up to soemthing... Maybe courting AA for an F9 purchase?

Last edited by Pigeye01; Jun 23, 2011 at 10:22 am
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Old Jun 23, 2011 | 10:36 am
  #24  
 
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Originally Posted by Pigeye01
160 new airplanes doesn't make sense. F9/RAH is up to soemthing... Maybe courting AA for an F9 purchase?
It's only 120 new airplanes (40 are options), which will replace a large portion of the existing airbus fleet when they come off lease. There is definitely expansion but it will probably only net 40 planes (depending on what the plan for the EJET fleet is).
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Old Jun 23, 2011 | 11:08 am
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Originally Posted by Pigeye01
Mergers / acquisitions are difficult. Two mergers / acquisitions are even more painful. Speculation: look for AA to acquire either B6 or F9. F9's LOI with Airbus may be a strategic move to attract a buyer, especially considering the C-Series order. 160 new airplanes doesn't make sense. F9/RAH is up to soemthing... Maybe courting AA for an F9 purchase?
Watching the growing AA/B6 relationship over the past year or so, it wouldn't be surprising to see those two carriers merge at some point. Reports this week that AA is is discussions with Airbus over a potential order only fuels this speculation further.

As for F9, I agree that not being aligned with a major carrier (frequent flier agreement and/or codeshare) is a major shortfall at the moment. Frankly, I'm very surprised that they haven't been able to get some type of agreement in place with at least one carrier.

Like you, I suspect that Frontier will be sold to another carrier at some point in the not too distant future. But I've been wrong before
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Old Jun 23, 2011 | 1:53 pm
  #26  
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Originally Posted by N830MH
Where did you hear this? I thought WN didn't announce to Hawaii a while ago. Surely, why not? It will have more tougher competitive against HA & Go!. I can't imagine why WN is going to Hawaii right after when the 738 to come online. If they will launched it when the 737-800 is accept delivery.
My source is Beat of Hawaii.

They were one of the first to report the news when Southwest was recruiting an ETOPS Program Manager and that they have their sights firmly focused on Hawaii with the 737-800 "ETOPS Enabled" order. Considering that ETOPS certification is a lengthy and complicated process, Southwest gets that, considering that no locations of which Im aware, other than Hawaii, would necessitate Southwests obtaining an ETOPS certificate.
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Old Jun 23, 2011 | 4:29 pm
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American would not want to compete with United on another hub outside if ORD so a DEN hub wouldn't really help them much. They wouldn't have much use for MKE either
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Old Jun 23, 2011 | 5:26 pm
  #28  
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Originally Posted by belfordrocks
Maybe a tatl hub in te north east probably pvd or pwm? If the neos have the range to fly to Europe then maybe this might work.
Actually, I think they will be in BOS. They do have CBP facility in entire E gates. Other US Airports who does not have CBP facility. The entire A320neo or A319neo will have enough more range to reached in EU or SNN/DUB with ETOPS certificate.
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Old Jun 23, 2011 | 7:12 pm
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Originally Posted by belfordrocks
American would not want to compete with United on another hub outside if ORD so a DEN hub wouldn't really help them much. They wouldn't have much use for MKE either
Two AA acquisitions that had nothing to do with hubs include:
1. Reno Air
2. TWA

If AA acquired F9, both hubs would close, slots would be sold.

If AA wants to quickly bring Airbus onto the property, a right-priced F9, with its trained crews, Mx, potential NEO orders, and other infrastructure may be valuable. You're right, AA doesn't want to compete in DEN or MKE, but there's more value to F9 than hubs in those cities.

I'd argue that F9's hubs are a liability not only to AA, but to even F9. F9's competitive advantage on the selling block is airplanes and trained crews.

Last edited by Pigeye01; Jun 23, 2011 at 7:55 pm
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Old Jun 23, 2011 | 7:16 pm
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Originally Posted by N830MH
Actually, I think they will be in BOS. They do have CBP facility in entire E gates. Other US Airports who does not have CBP facility. The entire A320neo or A319neo will have enough more range to reached in EU or SNN/DUB with ETOPS certificate.
TATL sans F or J class? F9 fares and service level won't generate the revenue to be successful. Again, networked programs are king. F9 doesn't have one.

I'd bet on Ryan Air flying PVD-SNN/DUB before F9.

Last edited by Pigeye01; Jun 23, 2011 at 7:58 pm
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