After the excitement died down from the announcement that Frontier Airlines would fly into New Castle, we were left with the question of why the carrier chose to come to a state that has struggled to hold on to airline service.
Beginning July 1, Frontier will offer 11 flights a week from New Castle to Chicago, Houston, Orlando, Tampa and its hometown of Denver. The forces behind Frontier deciding to land in northern Delaware lie in the rapid consolidation of an industry that seems destined to leave this country with three massive carriers – American-USAirways, Delta and United. Another major player is Southwest Airlines, which is now in the process of integrating its flights with those of AirTran, a carrier acquired in 2010.
Southwest has moved slowly in integrating AirTran into its network, but along the way the discounter has made life difficult for Frontier.
Frontier had grown into a mid-sized carrier, with a loyal hometown passenger base. It faced tough competition in Denver from United Airlines, but came armed with modern aircraft and low operating costs that allowed it to go toe to toe with the larger airline.
Then came Southwest. In a move questioned at the time by some industry analysts, Southwest brought its low-cost business model to Denver. Weakened by the downturn in the industry after September 11th, Frontier was vulnerable.
Another blow came with the recession of 2008-2009. Republic Airlines, which feeds short-haul flights to major carriers, snapped up a Frontier out of Chapter 11 bankruptcy and the losses continued. Republic had also acquired Midwest, a carrier based in Milwaukee that also had a loyal local following.
In Milwaukee, the culprit again was Southwest. The combined Frontier-Midwest simply could not compete, especially when Southwest acquired AirTran which already had a sizable presence in Milwaukee. Republic management went to work to cut Frontier’s flight schedule and the carrier eked out a profit in 2012. But Frontier was left with a need to stay out of the way of the Southwests of the world.
Management saw Trenton, N.J. as one answer as parent Republic looks for a buyer for Frontier. The airport is in a Philadelphia-area market dominated by US Airways. Fares are rising, especially after Southwest reduced service and moved planes to Denver and other markets.
So far, Trenton appears to be working out for Frontier, perhaps due to the airline’s low operating costs and a strategy of serving multiple destinations a few times a week. That’s a change from the normal pattern of one or two flights a day to a hub city Frontier recently added five more destinations from Trenton bringing the total number of cities served by direct flights to 10. Frontier will undertake a similar strategy at New Castle. The airline will offer four flights a week to the Frontier hub in Denver, where New Castle passengers will be able to connect to jets to Phoenix, the West Coast and even Alaska.
The thinking is that enough Delaware Valley passengers will be drawn to low fares, cheap parking and less congestion. (Philadelphia charges $20 a day for parking). That could keep planes in Trenton and New Castle full. Frontier also offers amenities such as DirecTV and more legroom at extra cost.
One key will be an aggressive marketing and advertising effort. Frontier has taken that approach in Trenton and signs point to the same strategy here, with advertisements over the weekend and a contest on Facebook. More marketing muscle will be needed outside the state.
In the meantime, Southwest, content to take a big chunk of the Denver and Milwaukee markets – will not be a threat and Frontier, at least for now. – Doug Rainey. (Editor’s note: Doug has been covering airlines off and on for 30 years).
