Frontier Airlines CEO sees path ahead to ultralow-cost dominance: Travel Weekly

Frontier Airlines CEO Barry Biffle has predicted that the Denver-based ultralow-cost service (ULCC) would be the “last man standing in the low-cost space next year.” 

Biffle is not merely relying on the demise of Spirit Airlines, now going by its second chapter restructuring this yr, to show the fortunes of Frontier. He’s leaning into Frontier’s bank card and loyalty providing and prepping for the introduction of first-class seats.

“We see a real opportunity now on the product and the price side to be America’s low-fare airline,” Biffle stated in a late-August interview. “Today, we are the top carrier in half of the top 20 metros for the ULCC space, and we see there is pretty much a clear path where we could be No. 1 at some point over the next 12 to 24 months in all of them.”

During the second quarter, Frontier reported a internet lack of $70 million with a painful minus-7.5% working margin.

Reversing the losses, Biffle acknowledged, would require a shift in trade supply-and-demand dynamics. Depressed demand for home financial system flying led discount-focused airways throughout the U.S. to wrestle within the second quarter. 

Those dynamics, although, do look like bettering. On Sept. 4, JetBlue upwardly revised its third-quarter income expectations, citing bettering demand tendencies. Meanwhile, U.S. airways, particularly the low-cost carriers, have been reining in capability. Spirit, trying to right-size to stay solvent, is main the way in which. This month, the airline expects to fly 23% fewer seats than in September 2024, and Spirit will stop operations in 11 airports in early October.

Frontier, which Deutsche Bank funding analysts estimate will overlap with Spirit on roughly 40% of its route community by December, is finest positioned to learn from the Spirit downside. 

Credit card income enhance

Frontier’s second-quarter outcomes had a silver lining: a 19% year-over-year enhance in spending amongst holders of its co-branded Frontier World Mastercard. 

Biffle stated Frontier plans to lean on bank card income, which presents a lot larger margins than flying, because it plots a return to profitability. He famous that even Delta, probably the most worthwhile U.S. airline, could be working at a loss if not for income from American Express co-branded bank cards. 

Frontier made $3 in loyalty income per passenger within the second quarter and expects to double that determine earlier than the tip of subsequent yr, a change that may add $120 million per yr in income. The airline’s loyalty income goal for 2028 is $10 per passenger. 

To entice flyers to amass its card, Frontier has put forth a bevy of bank card and loyalty perks that present practically instantaneous gratification. For instance, proper now all members of the Southwest, JetBlue, Alaska and Spirit loyalty applications can purchase Frontier Miles Elite Gold standing, the airline’s second standing tier, by subsequent yr for $69. The airline has additionally begun providing to match factors that new Frontier Miles members maintain on one other airline if these new members earn the identical variety of factors on Frontier inside 12 months. 

Meanwhile, bank card holders get 50,000 frequent-flyer factors after spending simply $500. They additionally get Gold Status after spending $3,000 inside 90 days. And in a brand new promotion, they earn free companion certificates after spending $3,000 by Jan. 31. The card’s annual price is $99. 

Gary Leff, creator of the View From the Wing blog, who writes steadily about airline bank cards, stated Frontier has to go the additional mile on its loyalty providing to compete with giant airways which have international route networks, giant associate networks, lie-flat seats and lounges.

“They are really creative, but they need to be because the program fundamentally isn’t going to offer the aspirational things that many of the larger loyalty programs do,” Leff stated. 

Frontier, although, will enhance a type of deficiencies late this yr when it begins deploying first-class seats. The product will not embrace the complete slate of first-class choices, similar to sizzling meals, discovered on full-service carriers. But the broad seats, spaced solely two-across and with loads of legroom, are slated to be outfitted on all Frontier planes by March, providing new alternatives to reward loyal flyers. 

Leff stated tender demand, concentrated largely within the home financial system market, has been the proper storm for a service like Frontier. 

“Presumably, macro changes alone lift them up, but they’re not sitting still,” he stated.