Tough talk. Not sure why this was a productive thing to say? Are they trying to harm F9's IPO? Pretty low move...

During United's Q2 earnings call, Kirby called the ultra-low-cost carrier's decision "the best news I've heard in 10 years."

That's because Kirby sees Frontier's move as a sign that its point-to-point model has failed to hold up when exposed to price competition from large network carriers through products like basic economy fares.

"I've believed for many years that the ultra-low-cost carrier business model can't work when a network carrier decides to compete on price," Kirby said in response to a question by Wolfe Research analyst Hunter Keay. "This is the first public validation that one of the ULCCs has thrown in the towel on the point-to-point business model."

However, Frontier Airlines disagrees with the United executive's assessment.

"Kirby's statement simply isn't true," the airline said in a statement in response. "Frontier currently offers connections over Denver, and always has, so this isn't a change in the business."

http://www.businessinsider.com/united-a ... ure-2017-7

Just a point of clarification. Kirby is the President of United Airlines. The CEO is Oscar Munoz.

Funny that its comes from Scott Kirby, who was 2IC to Doug Parker when they jointly decided to transform America West into a low cost carrier after 9/11 - they even changed the stock market code to LCC.

I guess he has to defend his territory somehow.

mariner

Frontier adds and drops routes so quickly that I can't keep track anymore. Hopefully some of the routes will stick. They seem to be going back to their hub-and-spoke model, while still retaining and adding point to point routes as well. With United offering basic economy, they can match or beat F9's fares. DEN fliers will have 3 options in hubbing airlines, each a different type of airline. They will have to decide which they like best. Maybe DEN can sustain all 3 comfortably? F9 gave up some DEN gates to DL, but DEN is planning on expanding all the concourses.

I'm not clear on why it matters if Frontier drops or adds routes? It's their business model. They aren't seeking out the business passenger but rather being more opportunistic with the leisure traveler, who usually isn't as loyal anyhow. I flew them recently but that route may be gone at some point. So? I'll just fly someone else. If I were a FF with one of the legacies, it'd probably matter to me more, but with carriers like Frontier, if they are in the market and have a competitive fare and schedule, that's all I care about.

TerminalD wrote:

Tough talk. Not sure why this was a productive thing to say? Are they trying to harm F9's IPO? Pretty low move...

During United's Q2 earnings call, Kirby called the ultra-low-cost carrier's decision "the best news I've heard in 10 years."

That's because Kirby sees Frontier's move as a sign that its point-to-point model has failed to hold up when exposed to price competition from large network carriers through products like basic economy fares.

"I've believed for many years that the ultra-low-cost carrier business model can't work when a network carrier decides to compete on price," Kirby said in response to a question by Wolfe Research analyst Hunter Keay. "This is the first public validation that one of the ULCCs has thrown in the towel on the point-to-point business model."

However, Frontier Airlines disagrees with the United executive's assessment.

"Kirby's statement simply isn't true," the airline said in a statement in response. "Frontier currently offers connections over Denver, and always has, so this isn't a change in the business."

http://www.businessinsider.com/united-a ... ure-2017-7

How is it a low move for someone highly knowledgeable with the LCC and Network Carrier business models to opine on F9's latest strategic play? The way F9 operates it does make it look like they're grasping for straws to find their niche.

77H

mariner wrote:

Funny that its comes from Scott Kirby, who was 2IC to Doug Parker when they jointly decided to transform America West into a low cost carrier after 9/11 - they even changed the stock market code to LCC.

I guess he has to defend his territory somehow.

mariner

different times, different carrier, different era. HP was based in low-yielding cities confined to the mountain west (LAS and PHX) with high-volume, largely leisure-oriented traffic. WN was also eating their lunch in both of these markets.

has nothing to do with F9 going p2p and creating hubs in random places like MCO, MIA, TTN, IAD, etc.

PlanesNTrains wrote:

I'm not clear on why it matters if Frontier drops or adds routes? It's their business model. They aren't seeking out the business passenger but rather being more opportunistic with the leisure traveler, who usually isn't as loyal anyhow. I flew them recently but that route may be gone at some point. So? I'll just fly someone else. If I were a FF with one of the legacies, it'd probably matter to me more, but with carriers like Frontier, if they are in the market and have a competitive fare and schedule, that's all I care about.

Eh, I wouldn't be so sure. Kind of conflicts with their brand premise as a ULCC, where they refer to themselves as the, "Target" of ultra low cost carriers vs. Spirit and Allegiant which are more Wal Mart types. I'd argue that NK tends to be FAR more stable in terms of adhering to its route network.

Also, really not encouraging for investors if you're in the midst of an IPO. Kirby is spot on with that point.

IrishAyes wrote:

has nothing to do with F9 going p2p and creating hubs in random places like MCO, MIA, TTN, IAD, etc.

And making money.

As we know from the IPO filing Frontier is making good money with this model, so it seems an odd time to dump on them.

mariner

What else was he suppose to say? That this is a great strategy that will pay dividends and they will become a formidable competition to United in a couple of years?

To me F9 and NK are moving more towards a WN type model. I do think Kirby has a point about being less point-to-point. They don't really have banked hubs, but are increasingly including the one-stop or connecting possibilities in the route planning. A prime example with the new release is that there is a plane that does MCO-MSY-SAT/AUS-SAN-SAT/AUS-MSY-MCO, allowing them to sell MSY-SAN daily with a stop at either AUS or SAT or MCO-AUS/SAT with a stop at MSY. This allows them to offer more frequency and sell more seats than a simple point to point model, without the risk and extra expense of a banked hub.

msycajun wrote:

To me F9 and NK are moving more towards a WN type model. I do think Kirby has a point about being less point-to-point. They don't really have banked hubs, but are increasingly including the one-stop or connecting possibilities in the route planning. A prime example with the new release is that there is a plane that does MCO-MSY-SAT/AUS-SAN-SAT/AUS-MSY-MCO, allowing them to sell MSY-SAN daily with a stop at either AUS or SAT or MCO-AUS/SAT with a stop at MSY. This allows them to offer more frequency and sell more seats than a simple point to point model, without the risk and extra expense of a banked hub.

I've never understood all this with Frontier.

The airline has always had one major hub - DEN - which has been, over the years variously successful and unsuccessful, and now successful again. At various times it has been a banked hub with many connecting possibilities. DEN was seen as its great strength, allowing them to make money and also it's major flaw because it made itself vulnerable to attack, which is precisely what happened when Southwest came to DEN.

For years, commentators and critics were urging Frontier to get another hub and after the Chapter 11 and sale to Republic, it had an unsuccessful second hub at MKE for a time, but it has also, from time to time, had some smaller focus cities. One of these, TTN, has been pretty successful - much to everyone's surprise - LOL.

What is happening now is a work in progress preparation for the IPO.

mariner

Scott Kirby is one of the brightest strategy guys in the industry today point blank.

Without evidence saying otherwise, I'd have to agree with him.

mariner wrote:

msycajun wrote:

To me F9 and NK are moving more towards a WN type model. I do think Kirby has a point about being less point-to-point. They don't really have banked hubs, but are increasingly including the one-stop or connecting possibilities in the route planning. A prime example with the new release is that there is a plane that does MCO-MSY-SAT/AUS-SAN-SAT/AUS-MSY-MCO, allowing them to sell MSY-SAN daily with a stop at either AUS or SAT or MCO-AUS/SAT with a stop at MSY. This allows them to offer more frequency and sell more seats than a simple point to point model, without the risk and extra expense of a banked hub.

I've never understood all this with Frontier.

The airline has always had one major hub - DEN - which has been, over the years variously successful and unsuccessful, and now successful again. At various times it has been a banked hub with many connecting possibilities. DEN was seen as its great strength, allowing them to make money and also it's major flaw because it made itself vulnerable to attack, which is precisely what happened when Southwest came to DEN.

For years, commentators and critics were urging Frontier to get another hub and after the Chapter 11 and sale to Republic, it had an unsuccessful second hub at MKE for a time, but it has also, from time to time, had some smaller focus cities. One of these, TTN, has been pretty successful - much to everyone's surprise - LOL.

What is happening now is a work in progress preparation for the IPO.

mariner

So if the point-to-point model has been a success for Frontier — and everything seems to indicate that it has been — why refocus back to DEN? That's not a critique, I'm just asking because I don't understand. F9 can't live with DEN but can't live without DEN, yet I have trouble seeing how this move is anything but a departure from their network planning of the last 2-4 years.

intotheair wrote:

So if the point-to-point model has been a success for Frontier — and everything seems to indicate that it has been — why refocus back to DEN?

You won't get a sensible answer from me because - as I said - I've never understood all this "boxing" of Frontier as a point-to-point airline or whatever the converse of that is.

I just want the airline to do interesting things, and it's been doing that for me since I started following it in 1998, good times and bad, and a lot (most?) of that focussed at DEN.

But I love that MCO is now a Very Big Focus City - HUB? - and I love that TTN is a Very Small Focus City - Not Hub?

mariner

Varsity1 wrote:

Scott Kirby is one of the brightest strategy guys in the industry today point blank.

Without evidence saying otherwise, I'd have to agree with him.

Obviously, although probably not as bright as his recent partner, Doug Parker, in my book. But even the brightest guys are going to say negative things about the competition, be it valid or not.

And to be fair, the man running Frontier is no slouch, having invested in some of the most successful low cost carriers on the planet, starting with Ryanair.

mariner

mariner wrote:

intotheair wrote:

So if the point-to-point model has been a success for Frontier — and everything seems to indicate that it has been — why refocus back to DEN?

You won't get a sensible answer from me because - as I said - I've never understood all this "boxing" of Frontier as a point-to-point airline or whatever the converse of that is.

I just want the airline to do interesting things, and it's been doing that for me since I started following it in 1998, good times and bad, and a lot (most?) of that focussed at DEN.

But I love that MCO is now a Very Big Focus City - HUB? - and I love that TTN is a Very Small Focus City - Not Hub?

mariner

W/r/t "boxing" in F9 as one thing or the other, I don't think you can fault people for trying to make sense of what type of airline it is. Interesting, definitely, but what message are they trying to send to the consumer, and perhaps more importantly, will they deliver a profitable business proposition to investors?

intotheair wrote:

mariner wrote:

intotheair wrote:

So if the point-to-point model has been a success for Frontier — and everything seems to indicate that it has been — why refocus back to DEN?

You won't get a sensible answer from me because - as I said - I've never understood all this "boxing" of Frontier as a point-to-point airline or whatever the converse of that is.

I just want the airline to do interesting things, and it's been doing that for me since I started following it in 1998, good times and bad, and a lot (most?) of that focussed at DEN.

But I love that MCO is now a Very Big Focus City - HUB? - and I love that TTN is a Very Small Focus City - Not Hub?

mariner

W/r/t "boxing" in F9 as one thing or the other, I don't think you can fault people for trying to make sense of what type of airline it is. Interesting, definitely, but what message are they trying to send to the consumer, and perhaps more importantly, will they deliver a profitable business proposition to investors?

I don't see how a DEN hub is incongruous with P2P?
I don't see how seasonality and less-than-daily is incongruous with profitability?

Frankly, the message they are sending to the consumer is "cheap fares". Beyond that, they are basically just a pimp mack daddy, looking for the dollar. So to speak.

intotheair wrote:

W/r/t "boxing" in F9 as one thing or the other, I don't think you can fault people for trying to make sense of what type of airline it is. Interesting, definitely, but what message are they trying to send to the consumer, and perhaps more importantly, will they deliver a profitable business proposition to investors?

I'm not "faulting" anybody, I'm just saying you won't get that kind of response from me, because it doesn't interest me. Other people want to do it, fine, go for it, but I don't put labels on things, or try to avoid doing so. Or, most usually, I ignore any labels I see. I've had memorable trips on airlines that others dismiss as crap - Iraqi Airways springs to mind - LOL.

mariner

PlanesNTrains wrote:

I don't see how a DEN hub is incongruous with P2P?
I don't see how seasonality and less-than-daily is incongruous with profitability?

Frankly, the message they are sending to the consumer is "cheap fares". Beyond that, they are basically just a pimp mack daddy, looking for the dollar. So to speak.

You have outlined the problem nicely. A hub without frequency (and destination count) is worthless. 'You missed your flight to xxx. The next one is Thursday afternoon.'

Seasonality and less-than-daily means business traveler count approaches zero. Average fares will be low (good for consumers - at least those who can live with low frequency). Sure, F9 has low costs, but profit = RASM-CASM.

They can keep trying other routes - but that increases their marketing costs and they start as an unknown in yet another market.

American's short-lived ad campaign, 'Get a great low fare and a lot more airline' could be a great way to compete against ULCCs.

77H wrote:

How is it a low move for someone highly knowledgeable with the LCC and Network Carrier business models to opine on F9's latest strategic play? The way F9 operates it does make it look like they're grasping for straws to find their niche.

77H

There's an unwritten rule in business that pretty much anything is fair game except trying to influence another company's IPO or stock/bond issuance. I've never seen such a blatant attempt to scare away investors. Find another example in any industry where a competitor de facto says an investment in our competitor is an investment in a failing company. I'm not sure it exists. If it does exist it's in small local companies. I've never seen it before on a stage like this. Maybe I've seen it when somebody like Buffet is buying a stake in a competitor, but not in a retail offering situation like this.

The better comment would have been "their network certainly doesn't seem to have a lot of stability. Next question." That would have been fine. It's when he draws a conclusion on how good of an investment they are when they are doing an IPO that he is furrowing new ground.

TerminalD wrote:

77H wrote:

How is it a low move for someone highly knowledgeable with the LCC and Network Carrier business models to opine on F9's latest strategic play? The way F9 operates it does make it look like they're grasping for straws to find their niche.

77H

There's an unwritten rule in business that pretty much anything is fair game except trying to influence another company's IPO or stock/bond issuance. I've never seen such a blatant attempt to scare away investors. Find another example in any industry where a competitor de facto says an investment in our competitor is an investment in a failing company. I'm not sure it exists. If it does exist it's in small local companies. I've never seen it before on a stage like this. Maybe I've seen it when somebody like Buffet is buying a stake in a competitor, but not in a retail offering situation like this.

The better comment would have been "their network certainly doesn't seem to have a lot of stability. Next question." That would have been fine. It's when he draws a conclusion on how good of an investment they are when they are doing an IPO that he is furrowing new ground.

He answered a question honestly. If F9 has a strong balance sheet they will reap the rewards of the IPO. However it does seem every 6 months they regurgitate a business plan and move to all new cities promising service only to disappear when the next round of schedules is released.

As for staying classy, this is really terrible of an officer of F9 to make such comments and put them in an email. Reflects poorly on the "talent" running F9. That guy should be looking for a job today.

http://www.9news.com/mb/news/local/next/fee-based-frontier-airlines-offers-sassy-insults-to-kyle-clark-for-free/458008027

intotheair wrote:

mariner wrote:

intotheair wrote:

So if the point-to-point model has been a success for Frontier — and everything seems to indicate that it has been — why refocus back to DEN?

You won't get a sensible answer from me because - as I said - I've never understood all this "boxing" of Frontier as a point-to-point airline or whatever the converse of that is.

I just want the airline to do interesting things, and it's been doing that for me since I started following it in 1998, good times and bad, and a lot (most?) of that focussed at DEN.

But I love that MCO is now a Very Big Focus City - HUB? - and I love that TTN is a Very Small Focus City - Not Hub?

mariner

W/r/t "boxing" in F9 as one thing or the other, I don't think you can fault people for trying to make sense of what type of airline it is. Interesting, definitely, but what message are they trying to send to the consumer, and perhaps more importantly, will they deliver a profitable business proposition to investors?

WN has established that an airline can send a loud and clear low-fare message to the customer (to the point that they sometimes do so when their fares are not the lowest) and target some more lucrative business traffic. But to do that, you need some sort of schedule predictability. I'm not sure why F9 chooses only the lowest possible fare group of customers.

Cubsrule wrote:

intotheair wrote:

mariner wrote:

You won't get a sensible answer from me because - as I said - I've never understood all this "boxing" of Frontier as a point-to-point airline or whatever the converse of that is.

I just want the airline to do interesting things, and it's been doing that for me since I started following it in 1998, good times and bad, and a lot (most?) of that focussed at DEN.

But I love that MCO is now a Very Big Focus City - HUB? - and I love that TTN is a Very Small Focus City - Not Hub?

mariner

W/r/t "boxing" in F9 as one thing or the other, I don't think you can fault people for trying to make sense of what type of airline it is. Interesting, definitely, but what message are they trying to send to the consumer, and perhaps more importantly, will they deliver a profitable business proposition to investors?

WN has established that an airline can send a loud and clear low-fare message to the customer (to the point that they sometimes do so when their fares are not the lowest) and target some more lucrative business traffic. But to do that, you need some sort of schedule predictability. I'm not sure why F9 chooses only the lowest possible fare group of customers.

The reason that F9 is going for these customers is because they have zero brand loyalty and will almost always book the cheapest fare, often through another service like Expedia. Frontier is in a position to offer very low fares initially, with bags and seats in the mix it's comparable but you have to fly regularly to know that. As someone who was doing a ton of leisure travel, I did 20+ segments on F9 last year out of DEN, buying only stretch seating and packing into a personal item only. It was cheap <$200 RT always, schedule fit my Friday-Sunday needs and it got me always largely direct and on mainline aircraft. Looking at the population mix, there are nearly all casual travelers on F9. Yes Biz is more lucrative but there are A LOT of casual travelers out there for VFR and vacations on a budget in the US to draw from.

By the way, you can't even book government travel fare on frontier (typically Y, refundable), and they aren't contracted or selling any GSA city pairs so again, who are they going for?

downdata wrote:

What else was he suppose to say? That this is a great strategy that will pay dividends and they will become a formidable competition to United in a couple of years?

THIS. Hits the nail right on the head. We aren't going to expect a competitor airline's president to laud its competitor for its strategy. It's like Singapore Airlines praising AirAsia or Air India praising Indigo for its efforts lol.

Cubsrule wrote:

I'm not sure why F9 chooses only the lowest possible fare group of customers.

It's trying to emulate NK and G4, more than WN, and those carriers do exactly the same, i.e. target the lowest possible fare group of customers.

msycajun wrote:

To me F9 and NK are moving more towards a WN type model. I do think Kirby has a point about being less point-to-point. They don't really have banked hubs, but are increasingly including the one-stop or connecting possibilities in the route planning. A prime example with the new release is that there is a plane that does MCO-MSY-SAT/AUS-SAN-SAT/AUS-MSY-MCO, allowing them to sell MSY-SAN daily with a stop at either AUS or SAT or MCO-AUS/SAT with a stop at MSY. This allows them to offer more frequency and sell more seats than a simple point to point model, without the risk and extra expense of a banked hub.

I don't know if F9 though will proactively discount routes through a 1-stop the way WN does. e.g. WN will often sell PIT/CLE-BWI-BOS cheaper than PIT/CLE-BWI, in order to inflict pressure on B6 who runs the nonstop to those markets to BOS. I don't see F9 and NK following that model with 1-stops.

chiraagnt wrote:

downdata wrote:

What else was he suppose to say? That this is a great strategy that will pay dividends and they will become a formidable competition to United in a couple of years?

THIS. Hits the nail right on the head. We aren't going to expect a competitor airline's president to laud its competitor for its strategy. It's like Singapore Airlines praising AirAsia or Air India praising Indigo for its efforts lol.

You can handle it much more professionally than saying it's a "failure". You can't be an executive without knowing how to answer a question without saying anything if you want to.

Am I the only one who doesn't like Kirby and think his ego is above his head? Didn't like him at US, didn't like him at AA, certainly don't like him at UA.

All Frontier has to do is work up a code share deal with Norweigian out of Denver, that would offer up much cheaper TATL connecting flights than the US3.

WaywardMemphian wrote:

All Frontier has to do is work up a code share deal with Norweigian out of Denver, that would offer up much cheaper TATL connecting flights than the US3.

Logic says it's only a matter of time

Super80Fan wrote:

Am I the only one who doesn't like Kirby and think his ego is above his head? Didn't like him at US, didn't like him at AA, certainly don't like him at UA.

Knowing some people that were around him a bunch during the HP/US days that's one of the highlights that they have pointed out to me, some claim it is a major character flaw. Though they also said that type of ego was what many who worked under him went to battle for.

In this situation I think he is just changing the conversation, he probably could have chosen his words better, but I don't think he's massively concerned with F9 at the current time.

jnev3289 wrote:

WaywardMemphian wrote:

All Frontier has to do is work up a code share deal with Norweigian out of Denver, that would offer up much cheaper TATL connecting flights than the US3.

Logic says it's only a matter of time

Norweigian could buy a sizable stake come IPO time.
Frontier is profitable these days.

It's a good point that Frontier has two major competitors in Denver; when they started de-emphasizing their hub there (2014?), SWA had far fewer non-stop routes there and so was less of a factor. I'm not sure how many new non-stops SWA has added since then, (I found at least 10), but sufficient to say, they will have even more competition. Anyone have stats on how many of the new routes out of DEN are also flown on SWA?

Tulsa for sure

jnev3289 wrote:

chiraagnt wrote:

downdata wrote:

What else was he suppose to say? That this is a great strategy that will pay dividends and they will become a formidable competition to United in a couple of years?

THIS. Hits the nail right on the head. We aren't going to expect a competitor airline's president to laud its competitor for its strategy. It's like Singapore Airlines praising AirAsia or Air India praising Indigo for its efforts lol.

You can handle it much more professionally than saying it's a "failure". You can't be an executive without knowing how to answer a question without saying anything if you want to.

My reply may have come off a bit wrong, I didn't mean to say that the comments were appropriate. I was more of the opinion that F9 would be a success and yet competitors would be very hesistant to laud it for success, not that Kirby was right or that his opinions should be taken so seriously.

One of the analysts did ask Kirby if Frontier was simply regaining its "natural share" in Denver, referencing Kirby's justification for adding capacity.

If Frontier was really no threat to UA, Kirby should have kept his mouth shut. Given that Kirby said that UA's most profitable hub is now DEN, he put a target on his own company when Frontier announced a huge expansion. UA and WN have enjoyed higher fares due to less Frontier presence in the past few quarters. That is likely to change and it will have an impact. WN was just smart enough not to comment.

Looking at F9 route map....I'd think this is a gigantic airline.
https://www.flyfrontier.com/plan-and-book/route-map/


1. BOS is noticeably absent.
2. No I-90 upstate New York
3. Two Ft. Myers airports?

So given that over half the new routes announced don't touch DEN, F9's point-to-point model is a failure? LOL!

jnev3289 wrote:

You can handle it much more professionally than saying it's a "failure". You can't be an executive without knowing how to answer a question without saying anything if you want to.

I think he professionally said exactly what he wanted to say.

727LOVER wrote:

Looking at F9 route map....I'd think this is a gigantic airline.
https://www.flyfrontier.com/plan-and-book/route-map/


1. BOS is noticeably absent.
2. No I-90 upstate New York
3. Two Ft. Myers airports?

1. I can't remember...have they ever served BOS?
2. ALB is pretty well served by SWA (including DEN) and B6, but SYR or ROC might be good adds. Along those lines, maybe BDL too.
3. They do?
4. Does anyone else think AUS-ONT is a strange add?
5. Anyone know if LAS has any connections or is strictly O&D? Still hoping for FAT-LAS in the future...

flyfresno wrote:

727LOVER wrote:

Looking at F9 route map....I'd think this is a gigantic airline.
https://www.flyfrontier.com/plan-and-book/route-map/



3. Two Ft. Myers airports?

3. They do?{quote]

Now THAT is interesting....it was there 1/2 hour ago.


BOS....yeah they did....seems like its been a good while.

That is so interesting. PGD is no longer on the drop-down.

Super80Fan wrote:

Am I the only one who doesn't like Kirby and think his ego is above his head? Didn't like him at US, didn't like him at AA, certainly don't like him at UA.

You are not the only one. I also think he's not as "bright" as some people think he is.

His ego took a shot when AA chose to retain Isom and not him.

Now it seems he's on some kind of rampage to prove everyone wrong.

downdata wrote:

What else was he suppose to say? That this is a great strategy that will pay dividends and they will become a formidable competition to United in a couple of years?

He obviously cant say that, but that is exactly what will happen. He has a crappy brand that has been badly damaged by several incidents and Frontier is taking full advantage of that.

WaywardMemphian wrote:

jnev3289 wrote:

WaywardMemphian wrote:

All Frontier has to do is work up a code share deal with Norweigian out of Denver, that would offer up much cheaper TATL connecting flights than the US3.

Logic says it's only a matter of time

Norweigian could buy a sizable stake come IPO time.
Frontier is profitable these days.

No more than 25%, per US regulations.

727LOVER wrote:

That is so interesting. PGD is no longer on the drop-down.

IINM, the Frontier announcement thread said that PDG service was moving back to RSW (but I could be wrong).

Scott is smart and what he said is probably true. Customers prefer network carriers to ULCC when the prices are similar. To become another WN is quite challenging and I never understood WN's business that well anyway. ULCC have limited opportunities against both WN and network carriers. But they do provide price sanity (spoil) on big routes. I like that, as a paying passenger. Long live the ULCCs; I won't fly them much.

except that UA doesn't have costs as low as Frontier and the analysts all know it. Either UA fights for share and loses money or they acknowledge that Frontier is rebuilding DEN and it will cost UA some share.

ldvaviation wrote:

Super80Fan wrote:

Am I the only one who doesn't like Kirby and think his ego is above his head? Didn't like him at US, didn't like him at AA, certainly don't like him at UA.

You are not the only one. I also think he's not as "bright" as some people think he is.

His ego took a shot when AA chose to retain Isom and not him.

Now it seems he's on some kind of rampage to prove everyone wrong.

This. Totally.

It is more significant that since Kirby left AA, AA's capacity growth has slowed, AA's RASM is increasing (in part due to improvements in Latin America), and Wall Street seems to increasingly be liking AA's plan for managing its network.

Even though Latin America is coming back, AA hasn't rushed to throw capacity back into the region while UA has continued to grow in Asia even while complaining about excess capacity and its pressure on UA's performance.

It is pretty apparent that when Parker said there were differences between the way Kirby wanted to manage AA's network and others in the management team, that was very much an understatement.

ldvaviation wrote:

Super80Fan wrote:

Am I the only one who doesn't like Kirby and think his ego is above his head? Didn't like him at US, didn't like him at AA, certainly don't like him at UA.

You are not the only one. I also think he's not as "bright" as some people think he is.

His ego took a shot when AA chose to retain Isom and not him.

Now it seems he's on some kind of rampage to prove everyone wrong.

Well and the fact that AA fired him tells me your assessment is correct. If he was as bright as some suggest, AA would've held onto him in spite of personality clashes.

The team with the successful track record was Kirby and Nocella, not legacy AA's team.

Kirby is right.

For the last few years Frontier has been spastic in regards to its routes. Their S1 filing showed Frontier had a plan and that plan was paying dividends. Unfortunately whatever that plan was they have abandoned and the current moves could very well be a sign of panic. They have made two moves that demonstrates they are not following their old planning and have instituted a new one.

1. DEN. In 2015 gave up 6 out of their 14 gates to leave them with the 8 they are down to now. Frontier has said that certain routes will be reduced to open up aircraft for the new schedule. With the number of new DEN routes either this schedule cut is coming from DEN's current schedule or Frontier will need some additional gates. Clearly whatever planning Frontier had concerning DEN has changed recently. With this much new service we are seeing a strategic change in Frontier's operations.

2. 21 cities and 85 new routes. This is somewhere between a 50% change in schedule and 50% growth depending on how many current flights are subject to change to make way for the new schedule. This is an extreme change in operations that isn't seen often and is certainly not consistent with Frontier's past actions (in plan or execution) nor something that anyone (especially an investor) expects to be repeated (if ever it was expected in the first place). The one sure thing Frontier has abandoned is predictable revenue which will certainly drive away many investors in the short term. I wouldn't expect the Frontier IPO to occur until the dust settles and a six month horizon for that wouldn't be unreasonable.

Two big moves out of step, and contradictory, with all their moves in the past can't be the sign of anything good. Not to say this is a sign of disaster but airlines don't make such moves and celebrate their success afterwards. I have also heard this move as an increase in Frontier's P2P flying however routes like JAC-DEN are clearly spokes from a hub and no one expects a route like this to be successful without a feed system. Many will disagree with me on this but no one can rule the possibility out. Frontier has possibly abandoned a pure P2P model and is introducing a mixed P2P and hub model.