Frontier Airlines coming to Aspen
ASPEN ” Frontier Airlines announced Thursday that it will offer five daily flights from Aspen to Denver, ending a decade-long run of virtually no competition for United Airlines in the local market.
The new competition will almost certainly help to lower fares for Aspen travelers. Frontier’s new service is expected to reduce the average fare by as much as 50 percent, according to industry observers.
Introductory fares offered by Frontier begin as low as $49 each way to Colorado Springs and $89 to Denver. Service will begin May 15.
Frontier is offering round-trip fares to dozens of destinations around the country, as well as Mexico and Canada, at an average price of $300.
“It’s even more service than we could ever dream of,” said Bill Tomcich, president of the central bookings agency Stay Aspen Snowmass and local liaison to the airline industry.
Tomcich added that the last significant airline competition between Aspen and Denver was in 1994 when both Continental and United operated at the Aspen-Pitkin County Airport. Aspen Mountain Air offered Aspen to Denver flights for one year from 1997 to 1998.
Frontier’s announcement was made in Denver at a press conference attended by Gov. Bill Ritter and several Aspen representatives, including Mayor Mick Ireland.
The airline’s expanded service also includes Colorado Springs, Durango and Grand Junction, along with Fargo, N.D., Jackson, Wyo., and Missoula and Bozeman in Montana.
It’s no secret
Frontier had hoped to have service started on its low-cost subsidiary, Lynx Aviation Inc., in December. The announcement has been expected for months and has been referred to by industry observers as the worst-kept secret in aviation history.
“It’s been a long wait that has required patience,” Tomcich said, adding that Frontier’s timing is ideal in that the airline will have plenty of lead time to sell tickets, and is coming on the heels of United’s announcement that it will charge customers $25 for a second checked bag.
Anticipating that Aspen would be included in Frontier’s expanded service plans, the airline was waiting for operating authority from the Federal Aviation Administration, which it received on Dec. 6. Frontier couldn’t market its new service or sell tickets until those approvals were granted.
“We still need certification for Aspen as a special use airport and that process is in progress … we couldn’t get final certification until we announced it as a destination,” said Frontier spokesman Joe Hodas. “But it’s not anticipated to be a problem … It’s just a matter of paperwork.”
The eight new cities are among 62 that offered bids for Lynx service. Lynx already serves Wichita, Kan., Rapid City, S.D., and Sioux City, Iowa.
A United reaction
How United Airlines will react to Frontier’s presence in Aspen remains to be seen but observers say fares will surely drop. Changes to fares typically happen fairly quickly in response to competition, Tomcich said.
“It’s anybody’s guess and depends on when people book Frontier,” he said. “But this is the beginning of significant changes for the landscape of our airport in terms of service and fares.”
Depending on the season, United Airlines operates between six and 13 flights daily into Aspen, with an additional three on the weekends.
United spokeswoman Robin Urbanski said while the Justice Department forbids airlines from discussing future pricing, the company will adjust its fares accordingly.
“Historically, our fares remain competitive, and we will compete rigorously, as we always do,” she said, adding United has competed against Frontier for years at Denver International Airport.
Urbanski also said United has a leg up on Frontier in that it can fly European travelers direct to Denver with its new London to DIA service, which begins March 31. She also noted that United has more leg room in its economy class section.
Local travelers were ecstatic with Frontier’s announcement.
“This is a tremendously positive response,” said Bob Morris, a frequent flyer of United Airlines who travels more than 100,000 miles a year.
Morris added that despite the benefits he gets as a frequent flyer, he will switch to Frontier, especially if he can fly Aspen to New York for half of what United offers. “For $300, they’ve got my attention. I’ll [fly Frontier] just to give them a chance.”
Fares also are expected to go down at Delta Airlines, which operates three flights a day to Aspen from Salt Lake City, with a fourth on weekends. Delta’s direct service from Atlanta to Aspen begins on Saturday.
Hodas said Frontier decided to operate five flights a day in order to effectively compete with United. It also shows the commitment Frontier has to Aspen and its travelers.
“We wanted to make sure there was opportunity for choice,” he said. “We want to compete and we think we can with this schedule.”
The ‘Green Machine’
Lynx Aviation will use a turboprop aircraft and regional jets operated by Republic Air ” both of which can be more efficient and economical on shorter trips.
Lynx will operate the Bombardier Q-400 into Aspen, a regional aircraft labeled as the “Green Machine,” for its fuel efficiency, resiliency and speed.
Frontier’s new destinations are shorter-haul markets, better suited to leveraging the economics of the Q-400. With seating for up to 78 passengers, the Q-400 provides airlines with greater revenue-generating opportunities in regional and low-cost markets, and extends an airline’s reach well beyond traditional turboprop markets.
The aircraft has no weight restrictions in the summer and is more resilient to tailwinds than other models, Tomcich said.
Financial boon or bust?
Frontier executives hope that the expanded service will improve the bottom line while coping with persistently high fuel costs and aggressive competition.
The airline unveiled its plans about three weeks after reporting the fiscal third-quarter loss more than doubled from the previous year due to high fuel costs.
Frontier Airlines Holdings Inc. in January reported a consolidated net loss of $32.5 million, or $0.89 per diluted share, for its third fiscal quarter ending Dec. 31, 2007, compared to a consolidated net loss of $14.4 million, or $0.39 per diluted share, for the same period the previous year.
Part of the net loss for the quarter was $4.8 million of net start-up costs and losses for Lynx Aviation.
Frontier’s shares were at $3.07 a share Thursday afternoon.
The announcement also comes as Denver-based Frontier is completing an operational review under Chief Executive Officer Sean Menke, who came on board five months ago.
Tomcich said there has been a near 100 percent turnover in Frontier’s senior management from one year ago when local officials began discussions with the airline.
Menke said he is satisfied with the route adjustments overall and will look at other ways to boost revenue as he strives for sustained profitability.
The company plans to announce other new destinations in early summer. Among the possibilities are the Eagle County Airport (serving Vail), Steamboat Springs and Crested Butte.
The company expects to hire between 10 and 15 employees for the Aspen operation, and officials plan to tap the local work force.
Sweetening the pot
Menke said the cities offered incentive packages that included reduced landing fees and rent, and marketing campaign assistance. However, he said his decisions were based largely on demographics and economic opportunity.
The Aspen business community offered $100,000 cash as a financial incentive to Frontier for marketing.
That money is sitting in an escrow account and will be delivered to Frontier within 60 days of Thursday’s announcement, Tomcich said.
Contributors to that incentive are Stay Aspen Snowmass, the Aspen Skiing Co., the Aspen Chamber Resort Association and four lodging properties ” the Silvertree Hotel, Destination Hotels and Resorts, Frias Properties and ResortQuest.
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