Monday, May 26, 2014

All Good Things...

Photo Copyright Joe Pries
Once upon a time, not so very long ago, there was an airline that originated the idea of low fare, high frequency flights with short turnarounds for their aircraft on the ground.  For $25 you could fly from one spot in the state to another further away, round trip, and the service on the ground and in the air was truly superb, friendly, and they were happy to have you on board.  The ORIGINAL Low Fare Airline was PSA - Pacific Southwest Airlines, based out of San Diego, California.  from 1949 to 1988 PSA was known as the "World's Friendliest Airline", and earned that distinction on every flight.  During the original round of merger mania in the 1980's, PSA fell victim to an apathetic management that felt it was better to sell off the airline and keep the rest of the assets from the Holding Company.  USAir took over PSA and the rest, as they say, is history.

Now, some of you might remember PSA, some might not.  But there is another airline that has claimed to the "Original" Low Fare Airline.  Enter Southwest Airlines, widely regarded as the darling of deregulation and falsely claiming to be the "Original" Low Fare Airline.  In the late 1980's and into the 1990's, Southwest could do no wrong.  Cities and their respective airports clamored for Southwest to begin service.  Once Southwest came to town, they didn't start with a handful of flights to one or two destinations, oh no, they came in with all guns blazing.  They would start 5-6 flights a day to several cities, usually 4-5 at first, then constantly growing as the loads developed and maintained.  This normally boosted a town's population and was a major source for creating new jobs in the area.  This was called the "Southwest Effect".  For years, this was how it worked, and Southwest motivated every single local economy it touched.

Lately though, it seems as if Southwest no longer has the effect it once had on local economies.  Since the iconic Chairman of Southwest, Herb Kelleher, left the company in 2008, and his successor, Gary Kelly has steered the company in a whole new direction, one more attuned with how the US Domestic Airline system is turning out with the latest round of mergers and consolidation.  Where once Southwest studiously avoided high-rent and high-traffic airports such as New York/LaGuardia, Denver, and Washington's National Airport, they now control vast amounts of traffic out of all three of these, and more cities such as Boston-Logan, Newark, and Atlanta.  Fares have also risen, for example,  I did a search from my hometown, Salt Lake City to Denver, one of Southwest's biggest cities, and a route that has massive competition from Delta, and Denver hometown favorite, Frontier.  I did a search at least 7 days ahead, and here's what i found:

Southwest's Lowest fare on June 9, 2014:  $230

Frontier's Lowest Fare for the same day and as close to the same time as possible:  $88.99

Delta's Lowest fare for the same day and as close to the same time as possible:   $150

By the way, Delta's lowest First Class Fare is only $10 more than Southwest's lowest Coach Fare.

It's not just on the Salt Lake City - Denver route either, look at the New York/LaGuardia to Atlanta route, a Delta stronghold route for the same day and same time...

Southwest's lowest fare:  $416

Delta's lowest fare:  $233, and First Class comes out to $371.

Photo Copyright Joe Pries
I rest my case, but Southwest Kool-Aid drinkers always use the "Bags Fly free, though!" mantra with me.  In First Class you also get free bags, and it looks like First Class on Delta is quite a bit cheaper or equivalent to Southwest's lowest fares, and you get an assigned seat.  or, if you fly Coach, its only an additional $25 for a checked bag, vs. the much higher Southwest fare.  I don't buy Southwest's gimmicks, nor do I approve of their charging for a second seat for passengers of size.  This is the biggest rip off in United States Commercial Aviation today.

Once upon a time, Southwest was the darling of Wall Street and cost-conscious travelers.  Airlines such as jetBlue, Allegiant, and Spirit (you could toss Frontier in this pile too) have taken over the lowering of fares nationwide.  RIP Southwest, you're just another airline now.

Saturday, May 10, 2014

The Bottom of the Barrel

"With an unbundled product, customers can save even more by choosing to pay for only the products that they want, allowing them to customize their flight experience for each and every flight"

If you believe the hype spewed out this last week by Frontier Airlines, I might have some beachfront property to sell you -- in Arizona.  Stung by being spun off from its previous owners, a hub in Denver with competition on 3 sides, and a route system that looks to be a hodgepodge of places no one wants to go on top of seemingly well thought-out routes (i.e. their old, original route system), Frontier Airlines seems to be in a breakneck sprint to the bottom of the barrel of airline choices nowadays, a far cry from their glory days from startup in 1994, to the Airbus fleet renewal and expansion of the Denver hub, and the addition of the Cancun hub.

Let me give you some background history.  This is not the first Frontier Airlines to fly around.  The first carrier named Frontier started in the 1940's as an amalgamation of three smaller carriers based in Arizona, Utah, and Colorado.  They selected Denver as their base of operations and grew from there.  They were one of the only airlines to support the Airline Deregulation Act of 1978.  Due to mounting competition at their sole hub from two other major airlines also hubbed there, Frontier began racking up losses and was eventually bought out in 1986 by PeoplExpress, who itself was bought by Continental (one of the other 2 airlines hubbed in Denver at the time) just a few months later.

Fast forward a few years, to around 1993 or so.  Denver Stapleton has pretty much outgrown its usefulness, and the new Denver International Airport was under construction.  Due to yet another bankruptcy filing and cost cutting measures, Continental has shuttered the hub in Denver, leaving tons of communities across the Mountain West and Midwest without adequate air service.  Enter Denver businessman Sam Addoms, and several former original Frontier executives.  They decide to restart Frontier in Denver, serving cities abandoned by Continental's tear down of the Denver hub, using Boeing 737 equipment.  In July 1994, the first 737 takes off, connecting Denver to Bismarck, Faro, Grand Forks, and Minot.  It was a great little operation that grew to encompass a nationwide system with a fleet of brand new Airbus A318's, A319's, and A320's.

Things were looking so great for management they decided to grow sideways.  They reformed as Frontier Airlines Holdings, Inc.  a parent company for the airline and any subsidiaries management decides to add, in 2006.  (In my opinion, this was bonehead  move number 1, as the original Frontier tried this and spectacularly failed after they started an airline-within-an-airline called Frontier Horizon back in 1983)  The parent company was based in Delaware, to take advantage of the extremely business friendly practices in state, while the operating headquarters and Frontier's hub still remained in Denver.  The parent company gave upper management the leeway to begin other subsidiaries, taking their focus off of the airline completely.

One of the first things management did was start Lynx Aviation, Frontier's answer to feeder flights in and out of Denver, using 70-74 seat DeHavilland Dash 8 equipment, hoping the new subsidiary would cut costs at Frontier by 30% with operating efficiencies in the smaller communities Frontier served as well as lower wages than the mainline carrier paid.  Not a bad idea, in general, just badly executed and ill timed.  In 2008, Frontier's credit card processor, First Data, announced it would withhold 100% of the carrier's transactions beginning May 1, 2008.  It put such a cramp on Frontier's liquidity, management threw the whole company, parent included, into Chapter 11 Bankruptcy Protection.

In Spring of 2009, Frontier reported that it will exit bankruptcy as a new subsidiary of Republic Airlines , once a feeder carrier for Frontier.  They also bought up Milwaukee based Midwest Express Airlines, famous for their baked on-board chocolate chip cookies.  Then they merged BOTH airlines under the Frontier brand, and went about cutting costs, slashing staff, and outsourcing stations away from Denver to third party contractors.  The instituted a march towards becoming a different kind of airline, a relatively new breed that has popped up called ULCC, for Ultra Low Cost Carrier.  That means you pay for your ticket, and your bags, your seat assignment, and everything else associated with your trip.  Marketing gurus call it "unbundling".  I call it a giant pain the wallet.

Final fast forward to this past winter.  Republic has been actively looking for a buyer of Frontier, after figuring out they were better off being a contract carrier than to run the risks of flying themselves.  In comes Indigo Partners, who own Spirit Airlines, and run by former America West boss Bill Franke.  They come in and announce that the company will institute a new fare saving gimmick, Frontier's Discount Den, where members can save $5 on their 1st checked or carryon bag,  as well as giving Frontier the ability to flood your email with deals on airfare to such exciting places as Trenton, NJ or Dover, Delaware.

And speaking of the costs for your checked bags, carryons and seat assignments, here's the breakdown:

Time of Carryon purchase:                        Classic Plus Fare            Economy Fare

Frontier's Discount Den member
booking on                               Free                                $20

Non-member booking on
or Reservations                                                Free                               $25

Web check-in at                       Free                               $25

Airport/concourse kiosk, or agent                     Free                               $35

At the gate                                                         Free                               $50

And seat selection?  Check this out:, anywhere between $3 and $15 depending on whether you assign a seat at booking, at check-in, or you allow Frontier to select your seat for you.  mind you, I do not recommend letting the airline select your seats if your not traveling alone.

Checked baggage remains the same at frontier as it does on almost every other airline in the United States, you still have to pay, but the fees range from $15 for Discount Den members at time of booking to $75 at time of check-in.

Like I said before, I'm not a fan of the ULCC practice.  The concept looks great, on paper, and sometimes, on the bottom line.  But to the consumer who flies more than once or twice a month, this blows.  I'll take my higher ticket fare and $25 checked bag fee to one of the network carriers and get to where I'm going in relative peace and quiet (and shoot for a chance at an upgrade).

Frontier seems to be headed for the absolute bottom of the air carrier barrel.  I will have a chance to try them out with their revitalized ULCC concept this November though, as my 12 year old daughter has been begging me to let her fly on Frontier, just once.  We'll see how that goes.