In what it says was the largest new route announcement in U.S. airline history, Frontier last month said that it would add 21 destinations and 85 new routes by next summer. With the move, Frontier will service 82 cities, and will also beef up its connecting network in its base city of Denver. Airlines editor Robert Silk spoke with Frontier chief commercial officer Daniel Shurz about the expansion, and whether it signals a shift back toward a hub-based network for the carrier, rather than the point-to-point model Frontier has employed since 2014.
Q: Why do you believe there is so much opportunity to expand right now?
Daniel Shurz
A: We have continued to make progress on reducing our costs. We can actually profitably serve more markets. We continue to look and we continue to find cities and routes that are underserved or are paying too high a price for airline travel.
Q: United president Scott Kirby characterized this announcement as an acknowledgement that you have run out of point-to-point expansion opportunities. How would you respond?
A: Apparently some people can't read everything we put into a press release. We announced 85 routes on the press release. Of those, 64 don't serve Denver and 21 do. Even my bad math shows that's three-quarters of the routes.
We are finding plenty of point-to-point routes. We are absolutely able to find other opportunities in other parts of the country.
Q: As part of the new routes announcement, your CEO, Barry Biffle, did emphasize that refortifying in Denver will help with connecting flights. Why are you putting capacity back in Denver after spending the past few years moving to a point-to-point model?
A: Fundamentally, we had an opportunity to review again where we are flying. We have applied a strategy in the rest of the country to fly to new cities and add frequencies to those cities. We haven't done very much of that in Denver. Since 2013 we've gone from 90% of our routes touching Denver to 45%. In the process, we haven't looked at where we could add new routes from Denver. We just wanted to make sure we looked. And we found a lot of opportunities. A lot of them are cities we went to before that didn't work profit-wise six years ago that we think will work from a profitability standpoint now.
We wanted to make sure that we emphasized the point that we offer customers low-fare access to Denver. We are also giving them low-fare access to other places.
Take Fresno, for example. People in the Central Valley pay a lot more to fly to the Central and Eastern times zones than customers do in the Bay Area and the L.A. basin. We wanted to emphasize that this is going to allow us to give competitive connecting fares.
Q: Was analyst Bob Mann accurate when he characterized you as becoming a hybrid airline that combines point-to-point and hub service?
A: Not exactly, no. If this is a hybrid model, we already have the hybrid model. We fly 50 destinations out of Denver today. We sell connections out of Denver today. We have 70 daily departures from Denver this summer. Next summer we anticipate 70 daily departures out of Denver. Denver will actually represent a smaller proportion of Frontier's capacity in 2018 than it does in 2017.
Q: Are you taking delivery of new aircraft to support the expansion? Or are you reducing frequencies on routes? Explain those logistics.
A: We are taking delivery of 16 A320neo [planes] next year. We are also returning eight A319s in 2018. But even a net growth of eight airplanes provides for a significant number of new routes. The vast majority of routes we announced are three to four times per week. You can get a lot of new routes out of a moderate number of new aircraft.