Frontier Airlines is planning a massive fleet expansion. (Image: Jim Glab)
Now that United, Delta and American have all rolled out no-frills Basic Economy fares on domestic flights to compete with the prices charged by ultra-low-cost carriers, are those carriers running scared?
Frontier Airlines isn’t. Quite the opposite: Frontier this week announced plans for a massive purchase of new aircraft. Combined with its earlier aircraft orders that haven’t yet been delivered, the deal would triple the size of Frontier’s fleet in 10 years, from 70 planes today to more than 200.
The company said it intends to purchase 100 new A320neos and 34 A321neos from Airbus, for delivery from 2021 to 2026. That’s in addition to 67 A320neos already in the purchase pipeline, and an existing order for 18 A319neos that Frontier is converting to A320s.
“By 2026, we will be in a position to deliver ‘Low Fares Done Right’ to more than 50 million passengers a year,” said Frontier CEO Barry Biffle in announcing the fleet expansion. In 2016, the airline carried 15 million passengers.
Frontier plans to acquire 134 new A320neos and A321neos. (Image: Airbus)
Frontier’s route network is constantly shifting as it adds and drops markets. But a few months ago, the airline announced plans to add 21 cities to its system by next spring, and to add more frequencies on other routes that it already serves. That includes a larger presence at its Denver base and at San Jose, among other cities.
Frontier’s fortunes have been rising in recent years. The Denver Post said that in filings related to an impending public stock offering, Frontier reported that its net income increased from $140 million in 2014 to $200 million last year as its fuel costs have been dropping and its ancillary revenues have been increasing.
Frontier’s ultra-low-cost carrier business model relies on ancillary fees from all kinds of amenities and services to supplement its low fares. A July 2017 report from Ideaworks said that in 2016, more than 42 percent of Frontier’s revenues came from ancillary fees – compared with just 7.7 percent in 2011, before it changed its business model.
The airline’s ambitious growth plan will initially focus on its Denver hub, where it will add most of the new routes announced last summer. That could mean a big battle for market share at DEN, since United Airlines also has plans to enlarge its hub there, and Southwest has grown rapidly at Denver in recent years as well.
Denver International will get 39 more gates in the next few years. (Image: Jim Glab)
According to FlightGlobal.com, United’s chief pilot in Denver said in a letter to other pilots last week that United plans to increase its Denver operations from the current 363 daily departures to 400 in 2019, and that DEN could eventually become United’s second-largest hub (after Chicago O’Hare).
Fortunately, Denver should be able to accommodate plenty of growth. Airport officials recently said that their plans to expand the passenger concourses have been revised: Instead of building 26 new aircraft gates in the next four years, they now plan to build 39.
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It’s terribly misleading to talk about Frontier’s “low fares” and “ancillary fees” when all they have done is disaggregate the price of a flight so they can advertise the lower basic coach fare. The customer’s all-in cost hasn’t really changed that much. It’s all a con. The rental car companies and hotels all do the same thing: advertise a rate, but then add on all sorts of fees and taxes. Your final cost always exceeds the published price. And that is all Frontier is doing.
Agree with Jeff. United and Southwest aren’t the ones that’ll lose the battle for DEN.
Frontier won’t be around in 2026. Airbus better get there money up front!
The folks who fly Frontier probably aren’t the same folks who gripe about lousy service and cramped seating. They’re getting what they’re willing to pay for, no more and no less.