Viewpoint: Frontier decision reflects changing airline industry

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Frontier_Aircraft_PhotoIt came as a shock a little more than a week ago when Frontier Airlines announced it would suspend service this winter from all points other than Tampa and Orlando. Service to those cities will be beefed up.

The carrier currently serves at Atlanta, Chicago, Detroit, Fort Meyers and Denver with non-daily service geared for leisure travelers.  It is possible that some service and perhaps other destinations could be added in the spring.

Frontier has  earned high marks from passengers even though it was going through a transition to an ultra-low fare carrier that added charges for luggage and drinks.

The Wilmington/Philadelphia (ILG) airport is now known as a friendly destination with few of the hassles of big city airports.

Flights were also more than 90 percent full and the airline was building a loyal following.

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What happened? Under new majority owner Indigo Partners, the carrier reviewed its service offerings and decided its planes could make more money flying to other destinations. Stronger results are needed as Indigo moves toward a public stock offering or sale that would allow it to cash out.

Airlines are coining  money these days, with carriers showing strong results in the second quarter as fuel prices stayed steady.  As the industry has consolidated into a handful of huge carriers, deep discounts have often disappeared. The big guys have also showed discipline by not adding capacity  that would put pressure on fares.

The environment  offers Frontier, with its four dozen  jets  (compared to several hundred each  at mega carriers like Southwest and US Airways-American) with more opportunities.

Frontier also made the bold move of adding Dulles airport in northern Virginia. The international airport has a small hub for arch-rival United Airlines. Frontier knows United well. For many years, it competed successfully with the carrier at the Denver hub both operate until Southwest came along and put the squeeze on pricing. Southwest, at one point, attempted to buy Frontier.

Delaware has a good story to tell on the commercial  aviation front.  That has not been lost on other airlines and it  is not out of the realm of possibility that a carrier, perhaps with a slightly different business model, might give Delaware a try. The state and airport manager, the Delaware River and Bay Authority, have wisely refrained from making too big a commitment to commercial service, given the history of airlines entering  and pulling out of  markets.

Still it is clear that an opportunity exists to make the Delaware airport into a  long-term niche player in the rough and tumble industry, especially as the merger of US Airways and American plays out and the threat of fare wars  fades.

The Frontier decision, while a temporary setback, should not be an excuse to pay less attention to a potentially key industry for the state.

 

 

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