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Frontier Airlines Future Looking Brighter
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Frontier is well known for offering cheap travel deals, including cheap airplane tickets, cheap vacation packages, and discount travel deals. Those deals may become even cheaper going forward as a result of Frontier Airlines’ new buyer promising to make the airline a contender in the ultra low cost niche of the airline industry.
Republic Airways Holdings has announced that it has agreed to sell Frontier Airlines to an affiliate of the private equity firm Indigo Partners which was an important early investor in ultra low cost Spirit Airlines.
Indigo has agreed to pay $36 million in cash and assume about $109 million of Frontier’s debt. Another $32 million will go to Republic for reimbursement for deposits on jet purchases.
Indigo plans to continue to position Frontier, a small airline known for the colorful animals on its planes tails and its devoted Denver customer base, as an ultra low cost airline, similar to Spirit and Allegiant.
Indigo wants to build Frontier into “a leading nationwide ultra-low cost carrier” believing that as airline ticket prices continue to increase passengers will be looking for affordable travel alternatives.
The managing partner of Indigo was chairman of Spirit Airlines until resigning this summer. Some experts believe that Indigo has made this move because it is convinced that the consolidation of the airline industry has created opportunities for entry of another ultra low cost airline.
Given that most passengers want the cheapest airfare possible, and do not prioritize frills, there may be room for just such an airline.
Frontier is expected to reduce its emphasis on Denver as its primary base. By reducing its number of flights into and out of Denver it can diversify its route network to better reflect where it makes money.
Within the last couple of years Frontier started reducing its reliance on Denver by establishing focus cities at two small East Coast Airports: New Jersey’s Trenton-Mercer Airport and Delaware’s New Castle Airport near Wilmington.
These two portals provide Frontier significant advantages. They are close to two of the country largest metro areas: Trenton is about 35 minutes to an hour from New York City and Philadelphia. Wilmington is about 30 miles from Center City, Philadelphia. Given that both airports are small, with Frontier their only airline, it is not likely to face direct competition.
Frontier flies non-stop to nine destinations from Trenton, seven from Orlando, and five from Wilmington.
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