Frontier sees strong corporate demand for ultra low-cost fares

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Frontier Airlines is seeing strong demand from corporate travellers for its streamlined ultra low-cost fare structure, just three months after simplifying its options.

“We’ve been really amazed,” says Andrea Blankenship, director of sales at the Denver-based carrier, on the sidelines of the Global Business Travel Association (GBTA) annual convention in Los Angeles. “Business travellers actually do look for good fares when travelling.”

Frontier initially expected the new lower fares to appeal mostly to leisure travellers and has been surprised by the interest from business travellers, she says.

The airline simplified its fare structure to include just two options in April: fully unbundled economy and bundled classic plus fares. It was able to lower fares an average of 12% as a result of the simplified structure, it says.

Passengers pay extra fees for everything from carry-on bags to assigned seats with economy fares, while these come included with classic plus.

Frontier has been transitioning to an ultra low-cost carrier model for more than a year but the transformation received a boost when Indigo Partners, the former owner of US ultra low-cost leader Spirit Airlines, bought the airline from Republic Airways in December 2013.

Part of its new shift includes expanding at airports near major cities, for example Trenton and Washington Dulles, or in former mainline carrier hubs, like Cleveland and St. Louis, in addition to the new fare structure.

Blankenship says that Frontier has been “very successful at meeting a niche” with all of the new routes.

Trenton service has “really hit a chord with people” in a catchment area that includes stretches from Newark to Philadelphia, she says. US Census data estimates that there are about 10 million people living in the region, which is also served by Newark Liberty International and Philadelphia International airports.

Frontier flies nonstop to 17 destinations from Trenton, though most on a less-than-daily basis, and opened a flight attendant base at the airport in June.

Washington Dulles is next on the carrier’s list of new focus cities. It will begin service to 14 cities in August, a number it hopes to expand to at least 17 by the end of the year. This comes despite the airport being home to a large United Airlines hub.

“I think there’s a lot of people we can reach with the new model,” says Blankenship on the plans for Dulles. She adds that Frontier sees a lot of “opportunity” at the airport for an ultra low-cost carrier.

Frontier has not been successful everywhere with its new model. Earlier in July, it confirmed plans to cut flights between Wilmington and Atlanta, Chicago Midway, Denver and Fort Myers, as it focuses more on leisure traffic to Florida in December.