Summary
- Frontier Airlines is considering adopting elements of the European low-cost carrier model to enhance operational reliability and achieve pre-COVID utilization levels.
- European budget airlines like easyJet and Ryanair offer significantly lower fares in comparison with their full-service counterparts, a model that Frontier hopes to duplicate.
- Nonetheless, structural differences and high taxes on aviation fuel within the US may limit Frontier’s ability to completely adopt the cost-saving strategies of European low-cost carriers.
On 26 October 2023, American ultra-low-cost carrier Frontier Airlines held its third quarterly earnings call for 2023. On the decision, the airline’s leadership expressed interesting sentiments in regards to the direction the carrier could possibly be taking in the approaching years.
From a method perspective, Frontier is a classic ultra-budget airline and offers just one specific profit to its passengers: low prices. Because of this, the airline, very like Spirit Airlines or Allegiant Air, seeks to remove virtually all luxuries from the passenger experience in favor of lower ticket prices.
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And yet, in america, fares on these ultra-low-cost carriers could appear all-time low, but they sometimes only come at a 20% or 30% discount compared to their full-service equivalents. Across the Atlantic, budget airlines like easyJet and Ryanair push the boundaries of what is feasible by way of lower fares, discounting fares as little as a 3rd or 1 / 4 of full-service equivalents. In Europe, Frontier has identified a model for low-cost operations that it hopes to duplicate.
What exactly was said?
On the earnings call were quite a lot of Frontier’s c-suite executives, but most significantly was the airline’s Chief Executive Officer, Barry Biffle. Throughout the decision, Biffle continued to allude to the success of the European low-cost carrier model and identified specific facets for replication. In a single memorable quote, the CEO had the next words to share:
“After careful evaluation, now we have determined that simplifying our business in a way just like European ULCCs will provide improved reliability and enabled the airline to make continued progress toward pre-COVID utilization levels, despite similar operating issues experienced over the past decade.”
But what exactly does a simplification mean from an operational perspective? What’s different about Frontier’s business model compared to European low-cost carriers that achieve this in a more streamlined manner?
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Primarily, because the CEO would discover later in the decision, Frontier has found that European carriers achieve an awesome level of success returning aircraft to base each night, and requiring far fewer moving pieces to be balanced with a purpose to ensure smooth operations. Alongside this, the CEO indicated adjustments within the carrier’s ancillary revenue policies.
What else could Frontier do?
Operationally, there’s way more that could possibly be done to make Frontier look loads like Ryanair and easyJet. First, there are much more places for ancillary revenue generation that Frontier has yet to explore.
Photo: Robin Guess | Shutterstock
From a passenger perspective, one finds this in Ryanair’s repetitive attempts to sell you items while onboard. The European low-cost carrier even sells lottery tickets onboard many flights.
What are Frontier’s limits here?
There are some limits that may at all times prevent US low-cost carriers from achieving the identical cost savings as their European equivalents. Taxes on aviation fuel in america remain high and are not set to go down any time within the near future. Ultimately, there are various structural differences that may prevent Frontier from fully adopting Ryanair or Wizz Air’s cost model in the long term.