Frontier’s ongoing network overhaul shows promise through solid revenue improvement

A network overhaul undertaken by Frontier Airlines in 2011 that entailed significant pull-downs in Kansas City and Milwaukee in favour of new point-to-point markets and a focus in Denver and Colorado Springs appears to be bearing fruit as the carrier in 2Q2012 recorded pre-tax income of USD14 million, reversing a USD33 million pre-tax posted in the prior year. Much of the improvement can be attributed to the network revamp that served at the centre of a restructuring at Frontier that delivered a total of USD136 million in cost improvements.

Frontier parent Republic Airways Holdings estimates that network and fleet changes represented USD50 million in the cost improvement programme as both unprofitable markets and aircraft were eliminated from Frontier's operations.

Between 3Q2010 and 3Q2012 the relevance of Milwaukee and Kansas City in Frontier's network dropped markedly. During 3Q2010 Milwaukee and Kansas City accounted for 16% and 5%, respectively, of Frontier's capacity. By 3Q2012 Milwaukee represented just 1% of the carrier's available seat miles while Kansas City dropped 3 ppts to 2%.