Why did Frontier Airlines change its business model?

Why did Denver-based Frontier Airlines change its business model? Photo: Wikipedia.

Why did Denver-based Frontier Airlines change its business model? Photo: Wikipedia.

As most readers know, Denver-based Frontier Airlines this week took the final step in becoming an ultra low cost airline, similar to Spirit Airlines. That means if you fly Frontier, you’ll pay for drinks and carry-on bags. On the bright side, the airline says its fares will be a lot cheaper than mainstream carriers.

Kirsten Painter of the Denver Post has been covering this story well and conducted an interview last week with Frontier CEO David Siegel. The full interview is up on a Denver Post blog, but I wanted to share some snippets with readers.

On why changing customer behavior could represent more profit for the airline. 

“When soda’s not free, fewer people want it, the less we carry onboard, the less fuel we burn, the more money we spend. So this is about changing customer behavior. If the customer behaves in a way that saves us money, we give them some of that back. They can behave any way that they want to behave, but if it saves us money, we’ll share that with them to give them an incentive to behave differently.”

On one of the reasons for instituting a carry-on bag fee. 

“We want to create a disincentive (for carrying on) but we don’t want it to be punitive or customer-unfriendly. But it’s a balancing act because you really want to change behavior, it’s better for the customer because they save money.”

On the reason the fee for bags gets higher, as the passenger moves physically closer to the gate.

“We don’t have a higher fee at the gate because we want to make more money. We have a higher fee at the gate so we hope we never collect it.”

Facebook Twitter Plusone Linkedin Reddit Tumblr Email