Indigo’s real work in Frontier’s ultra low-cost aspirations begins in earnest as the deal closes

As Indigo Partners moves closer to finalising its acquisition of Frontier Airlines and heightens the efforts underway to transition the airline into a true ultra low-cost carrier similar to Spirit Airlines, certain nuances to Frontier's strategy should prove interesting for Indigo to navigate as it works to place Frontier squarely in the US's growing ultra low-cost business model. Overall, the ultra low-cost business scheme has so far proven fruitful for Spirit in terms of the carrier's financial performance; but passengers still bristle about being nickel and dimed even though they are paying base fares lower than most other airlines (even so-called low-fare airlines) by a significant margin.

Headed by former Spirit Airlines chairman William Franke, Indigo was a major owner of Spirit as it began the transition to an ultra low-cost carrier in 2006. As is now well documented, he set the wheels in motion to purchase Frontier earlier in 2013 when he resigned as Spirit's chairman and Indigo sold its stake in Spirit.

The deal is expected to close some time during 4Q2013; but Indigo has no doubt been plotting a strategy specific to Frontier's network to ensure the successful execution of the business model change. It is a formidable challenge for a long-standing brand that for a long period of time offered at least some medium frills. Indigo's biggest challenge may lie in avoiding isolating a loyal Frontier passenger base in Denver that has already endured a number of significant changes since its 2009 purchase by Republic Airways Holdings.