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Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

With space being an issue Frontier is looking to expand outside of Denver. They tried and failed and LAX and are looking to a smaller city. IND perhaps?

"Frontier has also been looking at again expanding outside Denver. An attempt to do so in Los Angeles failed this year. A city smaller than Los Angeles might work better, Tate said."

Source: http://www.denverpost.com/business/ci_3292750

They are also looking at adding the A320 to their fleet which is similar to the 757. Frontier is smart. Their Denver operation, while appearing to be a hub & spoke system actually targets origination and destination traffic. They have a high percentage of O/D passengers. They will likely pick a market that isn't overserved. A market where they can fill their planes with O/D and fill in the gaps with connecting traffic. This kind of forumula along with the best domestic product should guarantee their success for years to come.

Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

I think Frontier is more focused on the western U.S., though. They tried and failed in Los Angeles, after all - not Chicago or New York or whatever. It'd be great if they look to IND for their expasion beyond DEN, but it seems to make sense that they might look for another western city that fits this bill. Maybe an alternate LA-area airport, like SNA (the OC). Or perhaps SAN (San Diego). But Suckramento (SMF) might make some sense, or Portland. Those are both similarly sized markets to IND anyway. Will be interesting to see what Frontier does.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

Someone needs to make up their mind if Los Angeles was a failure or not. From what I understand, Frontier got a good reception on the Kansas City and St. Louis into Los Angeles, but didn't get a good reception when it tried into Minneapolis, thanks to Northwest.

If Frontier just chills out for the better part of 2006, let its customer base run and build, bring in the income, and pay off some outstanding debts. Denver is getting tight for them and it'd be smart to just be in a much better position to make a big bold move in the wake of airline turbulence in the industry for 2006. A shakedown will eventually occur...and I'm mostly likely thinking some drastic changes for Delta, if not liquidation of Northwest. If Northwest goes away, Frontier paying off debts would put it in a great position to receive some financial backing to scoop up some left around Airbuses', slap them over to their side as soon as possible, and pick up a great operation out of Minneapolis St. Paul, albeit moving entirely from Denver on over there. Just a theory in my mind, but then again, what do I know.

Sacramento would be a smart idea for perhaps some point to point service into select markets. I haven't looked at that airport *ever* to see to whom even flies where. You'd think for a city its size it could warrant some traffic to New York, Washington D.C., etc. Even Florida.

Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

I believe the only nonstop from SMF to the east coast or Florida is a JetBlue flight to JFK. It's a similar city to Indy in that it's a mid-sized airport market close to a much bigger, international airport market (i.e. Indy is to Chicago what Sacramento is to San Francisco). I imagine one difficulty in putting nonstop transcon service into SMF is that it takes a big plane to make it on that route, and demand is probably not steady enough to fill such a plane consistently.

I don't think I buy the NW liquidation story. If anything, I see them getting cut way down in size and being bought by investors and another airline. Their Asian routes and their DTW and MSP hubs are the gems that would be very attractive to an investor. They are the kings of US-Japan service, and even much of the US-China/SE Asia service is well served through NW's Japanese ops. And DTW and MSP both represent solid o&d destinations where they have huge market share. I could see private equity snapping them up and letting the MEM hub go or be reconfigured. Those investors could also partner with a foreign airline, which could own up to 49% of NW under US law. I could see an ambitious Asian airline wanting to get in on that action - perhaps All Nippon or Air China.

The more likely liquidation scenario, IMHO, would be DL. They don't have the super-attractive international routes of NW. Their JFK-Europe service is predominately on hyper-competitive routes to places like LGW, CDG, AMS, FRA, MAN, and FCO. Their South American routes ex-ATL are a distant third to those of AA (ex-MIA) and CO (ex-IAH). Their domestic hubs, with the exception of ATL, are second-tier markets without super-robust o&d demand.