Key Takeaways

• Frontier Airlines is known as the most fuel-efficient US airline, as it claims to have achieved an average fuel savings of 43% compared to its competitors. Frontier Airlines operates a user-friendly digital platform, including the company’s website and mobile app.

• In October 2021, Frontier Airlines announced its adoption of Skywise Health Monitoring (SHM) as its primary fleet performance system, which will cover Frontier’s 111 single-aisle aircraft.

• In December 2021, Frontier Airlines announced its partnership expansion with AVIOBOOK to improve existing workflow efficiency and to better deliver its eco-friendly operations. Through this initiative, Frontier Airlines works toward expanding the scope of AVIOBOOK’s Electronic Flight Folder’s functionality.

• Aggregating massive amounts of third-party data and staffing shortages are two corporate challenges faced by Frontier Airlines.

Introduction

Frontier Airlines: Company Overview

• Established in 1994, Frontier Airlines is an ultra-low-cost carrier company based in Denver, Colorado. A year into its operation, the company expanded its footprint to serve a route that included Montana, Texas, Nevada, Arizona, Nebraska, North Dakota, and New Mexico. Today, the company has grown to serve over 120 destinations across the United States, Central America, the Caribbean, and Mexico.

• Frontier Airlines operates over 100 A320 family aircraft and currently has America’s largest A320neo fleet. The company prides itself in efficiently executing weight-saving initiatives with these aircraft via its unique seating configuration. As a result, Frontier Airlines’ average fuel savings shot up to 43% compared to its competitors, and thus, earned the titles of the “most fuel-efficient US airline” and “America’s Greenest Airlines”.

• Frontier Airlines is known to offer the lowest fares, some as low as $19. Not only does it offer low fares, but it also allows children who are 14 years and younger to travel free on qualifying flights via its DISCOUNT DEN travel club.

Products and services:

• The airline offers flights to more than 100 destinations, allowing customers to travel at low fares to all regions across the United States. Frontier also offers flights to 12 international locations, including Guatemala, Jamaica, Puerto Rico, Bahamas, and Belize.

• Frontier allows customers to book their flights, hotel, car, and popular activities in various locations, through its main website. Members are offered various benefits, through their myFrontier account, such as discounts, earning miles, family pooling, and award flights.

• The company offers two bundle choices that enable customers to further save cost and time. The two bundles offered are the Works bundle and the Perks bundle. The Works bundle includes a carry-on bag, an extra checked bag, seat selection, board first, flight flexibility, and 100% refundability, while the Perks bundle only includes a carry-on bag, and a checked bag, and allows customers to reserve their seats.

• Special services are provided for customers with wheelchairs, developmental disabilities, personal care assistants, physical disabilities, service animals, emotional support animals, customers with allergies, and customers needing a portable oxygen concentrator.

• The company operates a user-friendly digital platform that includes Frontier’s mobile app and website, allowing customers to book, make changes, and track their travel easily. Frontier Airlines also offers in-flight sales and an online store to boost customer experience.

 

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Funding, Mergers, and Acquisitions:

• In December 2013, Indigo Partners acquired Frontier Airlines. Frontier Airlines is currently a subsidiary of Indigo Partners.

• In April 2021, the airline raised $570 million in IPO by selling over 30 million shares at $19 each, which turned out to be the lower end of its target range. With this result, Frontier Airlines was able to achieve a valuation of $4 billion.

• In February 2022, Frontier and Spirit began discussions to merge into a single low-cost carrier. The deal was proposed to overcome market challenges and strengthen their business models. However, JetBlue, a major low-cost airline, put in its bid for Spirit and brought about uncertainties for the Frontier-Spirit merger.

• In July 2022, Frontier and Spirit announced that the merger would not be taking place.

Annual Revenue:

• The pandemic significantly impacted the airline in the first quarter of 2020, with traffic reducing to 3,000 passengers a day from an average of 80,000 passengers on a normal day. While the company reported a revenue loss of $225 million in 2020, compared to the previous year of $271 million, Frontier was noted to have “bounced back more strongly” due to its business model.

• According to the company’s most recent financial report, Frontier’s operating revenue for the second quarter of 2022 was reported as $909 million. The airline is expecting the third quarter’s revenue to rise by 20% compared to the third quarter of 2019. The report also revealed that the ancillary revenue during the second quarter was $74.96 per passenger.

• The company’s operating revenue in 2021 was reported as $2.06 billion, which was a 65% increase compared to the revenue recorded in 2020 ($1.25 billion) and an 18% decrease compared to the revenue recorded in 2019 ($2.508 billion).

Corporate Values and Mission

• Frontier believes that “The Sky is for Everyone” and strives to deliver through its “Low Fares Done Right” brand. The company aspires to ensure that every experience is “easy, affordable and enjoyable”. This mission statement emphasizes user experience and providing high-quality service.

• Frontier’s standards are primarily focused on sustainability and upholding its high green standards for travel. The company is working towards reducing its carbon footprint further.

• The corporate values most prioritized by the employees of Frontier Airlines are shown below.

 

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• Frontier Airlines also values equal employment and ensures equal opportunities for all people. The company makes a strong effort in prohibiting all kinds of discrimination in its operations.

Recent and Announced Strategic Initiatives

• In December 2020, Frontier Airlines signed a 10-year contract with Boeing to avail a wide range of planning and operations tools designed to boost the airline’s overall efficiency. Boeing’s digital solutions offer Frontier a fleet-wide cost-saving system, enhanced operational reliability, and amplified staff-planning processes. Apart from digital navigation, Frontier also obtained Boeing’s new “digital solutions suite that provides day-of-operations decision-support tools”.

• In January 2021, Frontier Airlines announced its partnership with Vistair Systems, a market leader in aviation Document and Safety Management services, for its sophisticated document management platform called “DocuNet”. The adoption of this platform allows Frontier to reach higher efficiency and scalability levels in its operations. Frontier’s VP of Flight Operations, Brad Lambert, said that Vistair’s document management system is the best fit with regard to the company’s scalability, technical capability, and client management requirements.

• In October 2021, Frontier Airlines announced its adoption of Skywise Health Monitoring (SHM) as its primary fleet performance system, which will cover Frontier’s 111 single-aisle aircraft. The SHM system will operate by collecting live diagnostic feeds from the aircraft’s information system via the Aircraft Communication Addressing and Reporting System (ACARS) link. Frontier Airlines hopes to decrease maintenance costs and save time with the adoption of the SHM system.

• In December 2021, Frontier Airlines announced that it would expand its partnership with AVIOBOOK to improve existing workflow efficiency and to better deliver its eco-friendly operations. Through this initiative, Frontier Airlines planned on expanding the scope of AVIOBOOK’s Electronic Flight Folder’s functionality. This marks Frontier’s implementation of phase II of the initiative, where pilots are offered tools to better facilitate EFB workflow, improve real-time communication, and streamline access to critical airport information.

• In September 2022, Barry Biffle, the CEO of Frontier Airlines, revealed having discussions with SpaceX and said that Frontier would consider installing Starlink on its aircraft fleet when the service becomes more affordable. The low-cost carrier does not currently provide in-flight WiFi, and thus, the adoption of Starlink would make it the very first WiFi contract. While the discussion was promising, Biffle admitted that there is no marked timeline for the endeavor since there still exists the challenge of countering the additional weight and drag.

Quotes from Frontier Airlines’ Executives on their Digital Strategy

• In its press release on the company’s growth opportunities, in July 2022, Barry Biffle, the CEO of Frontier Airlines said “As we continue to see a rebound in leisure travel, we have never been more confident in our strategy and prospects than we are today”.

• In 2020, Frontier announced its partnership with Retail inMotion (RiM) in developing an on-board retail program. On the subject of broadening digital and retail experience, Jake Filene, Frontier’s Senior Vice President of Customers said, “As Frontier continues to grow, we are extremely focused on evolving the customer experience and this new partnership with LSG and the experts at RiM will provide terrific new on-board retail options that we know our customers will appreciate and enjoy”.

• In 2020, Frontier partnered with MINT Software Systems to leverage its innovative software for Frontier’s training operations. On the subject of the digital adoption, Frontier’s vice president of flight operations, Brad Lambert, said, “We were looking for a contemporary qualification, training management solution to replace our legacy systems, and MINT TMS in combination with the service package offered by our new partners at MINT Software Systems was the correct choice.”

• In 2019, Barry Biffle said in a press release, “Our business has undergone an amazing transformation to reach this level of efficiency and we’re committed to continuing our efforts to be a more sustainable and affordable option for travelers.”

Existing Marketing Tech Stack

• The technologies used by Frontier for e-commerce include Monetate, Cart Functionality, and PROS Pricing.

•  Bigtincan, Seismic, Airtable, ROLL, and Intercom are technologies used for Frontier’s Sales category.

•  Qubit, Wyng, Facebook for Business, Tailwind, and PressPage are the technologies used by Frontier for marketing.

•  Umbraco is a content management system used by Frontier.

• Frontier uses content delivery network software such as Microsoft Azure CDN, CDN JS, CloudFront, Azure Edge, AJAX Libraries API, Gstatic Google Static Content, Cloudflare, and Cloudflare JS.

Corporate Challenges Faced by Frontier Airlines

#1: Aggregating Data

• According to Jake Maloney, an eCommerce senior manager at Frontier Airlines, capturing and aggregating third-party data efficiently is, both, an opportunity and a challenge. With the current privacy regulations and the ever-growing concerns of consumers, every business faces the growing challenge of data aggregation.

• Airlines, like Frontier, are heavily dependent on data and most often end up dealing with more data than they ever imagine using. Digital offerings such as subscription programs and loyalty programs have an important role in Frontier’s data collection strategy.

• Maloney admitted that the company struggles in “compiling data in a digestible format” that can later be used in a useful and intelligent manner. This challenge can be overcome by adopting an efficient technological strategy and with the right team of skilled people.

#2: Staffing Shortages

• The summer of 2022 saw airline traffic going back to its pre-pandemic levels. However, the influx of customers has left several airlines struggling to maintain an appropriate staff-to-customer ratio. Staffing shortages along with logistic issues have caused many flights to delay or even get canceled. According to an article published by BestLife, Frontier Airlines revealed that more than 4,000 of its flights are to be cut amid staffing shortages.

• In 2021, the staffing issue was more prominent in Orlando, where almost every single flight was delayed by one to three hours. Furthermore, the staffing problem extended to Florida, as people were forced to stay on their flights even after landing because there wasn’t enough gate staff. The staff shortage stems from different factors, however, the key reason has been attributed to the mass lay-offs made during the pandemic.

• Additionally, while the United States aviation industry is experiencing a pilot shortage, Frontier is attempting to address the issue by hiring pilots from foreign countries. It has also made strategic partnerships with educational institutes, such as the University of North Dakota, to encourage qualified students to move directly into training at Frontier.

Research Strategy