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Frontier Airlines straddles ultra low-cost and hybrid profiles (or falls between them)

Analysis

Denver-based Frontier Airlines has experienced a vast upheaval during the last few years. Acquired by US regional operator Republic Airways Holdings in 2009, Republic decided more than a year ago to spin-off or sell Frontier.

Meanwhile, during its time as a subsidiary of Republic, Frontier has successfully executed a cost cutting scheme and network overhaul that has largely produced favourable results. As it worked to achieve cost efficiency Republic management declared its intent to transform Frontier into an ultra low-cost carrier to mimic the cost structure of other US carriers in that genre, namely Allegiant and Spirit.

But as Frontier has worked to improve its fortunes it has not developed a business model that falls strictly into a no-frills offering in the same vein as Spirit Airlines. Its network is a mix of flying from a hub in Denver and point-to-point operations largely from Orlando and its new focus city of Trenton, New Jersey. Frontier lacks the scale to develop into a full-blown hybrid carrier like JetBlue, yet does not strictly adhere to a pure leisure focus.

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