Southwest is losing boatloads of money in Denver. They have struggled to gain market share against Frontier. Solution? Buy Frontier. Those who believe this will be good for Denver and its traveling public are ignoring those facts. Fares will go up and service levels found on Frontier will disappear. The so called "Southwest affect" will not occur and, in fact, the opposite will happen. United and Southwest will develop a kind of equilibrium and fares will become much less competitive. Meanwhile, thousands of employees will lose jobs and Denver will be left with a choice of the clueless giant (United) or the cattle call of Southwest. The Gersan blog really misses the point. Frontier is profitable (even net of bankruptcy impacts)and Frontier will not "live on" under Southwest. Frontier will disappear just as fast as SW can phase out the Airbus aircraft. The Lynx operation will cease to exist and so inter-mountain fares such as Durango, Aspen etc. will skyrocket.
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I have a somewhat unique perspective in that I was in management of the original Frontier and also at Morris and America West. All three airlines had very strong cultures and employees who, for the most part, felt a genuine loyalty to the company. There is a lot of emotion in this and probably rightfully so. Frontier has a long history with the people of Colorado and a brand that has very positive connotations. The current edition of Frontier has become, in many ways, a twin of the old one. It has fought against long odds and established a strong niche, a very positive and interesting brand and a relationship with Colorado and Denver. The current Frontier also shares a downside with its original. It has been squeezed hard by two strong competitors. History has shown that no market successfully supports three hub carriers. Despite SW's claim to the contrary, it is a hub operator. The difference this time around is Frontier has a very strong product in the face of other airline product that is becoming a race to the bottom. jetBlue, AirTran and Frontier have all retained at least some level of cabin service that does set them apart. Continental remains the only "network" carrier to at least attempt to keep service levels onboard.
At this time, FL is in a no win situation. Republic is not so much of an airline as it is a franchisor. The management has a long history in the business, principally at Mesaba, and things did not turn out too well there. It is very unlikely republic will retain frontier's culture or brand simply because they have no experience in doing so. They may initially keep the status quo but I guarantee that over time, the head shed in Indianapolis will take over and , having no sense of brand etc., FL will morph into another republic "franchise".
One the other hand, SW has a great employee culture and a unique brand. For the most part, the brand is efficiency. SW has the benefit of not having to "downsize' a brand image because the bar was never really high. That is not a knock. It merely means they are not having to explain the discontinuance of meals, charging for a pillow etc. "upsizing" the brand will never occur in this economic environment so Frontier's brand and culture will disappear over time. I'm sure Paula Berg is a very nice and knowledgeable person but there will not be a mesh of cultures. Frontier's will go away. It is also true that FL employees will likely lose a lot of jobs, seniority and self esteem. I saw that first hand with Morris. I did not want to transition to SW from Morris as I worked with other David Neeleman stuff including the JB idea. But I can tell you the Morris people were not handled well and many just gave up. Morris, like Frontier, had a very strong and participative culture, probably the strongest I have ever seen. They were put through, unnecessarily, a gauntlet of rehiring processes at SW that tore that pride up very quickly.
My own opinion is that FL would be a better fit for jetBlue AirTran or even Virgin America. Virgin is probably not in a position to do anything but JB and AT would open up interesting possibilities. But make no mistake, even those entities would mark the end of FL; just not through the same process as Sw has demonstrated over the years. The only way to preserve it all would be independent investment. Possible, but in today's environment, financial buyers in this industry are virtually non-existent. A group I advised thought about looking at Fl a while back but concluded early on that strategic buyers are more likey to emerge with this. We did, however, feel FL could successfully operate stand alone and if the markets weren't so screwed up, financial buyers like the group I advised would strongly consider this.
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