Business

RDU’s fastest-growing airline is low on fares and frills, but high on complaints

Frontier Airlines started flying nonstop from Raleigh-Durham International Airport to Minneapolis-St. Paul earlier this month, followed two days later by its first nonstop to Detroit. Next month, it begins offering what will be the only nonstop flights between RDU and San Diego.

The new flights are part of a year-long expansion for Frontier at RDU that will make it the No. 1 airline in the Triangle in terms of nonstop destinations with 27, surpassing the current leader Delta. And with the new flights to Minneapolis and Detroit, Frontier takes on Delta at two of its hubs, becoming only the second airline to offer nonstop flights between RDU and those cities.

But Delta and Frontier represent two different approaches to running an airline. As a traditional full-service airline, Delta offers daily flights, multiple times a day to some cities, with connections to about 325 destinations in the U.S. and around the world. A carry-on bag in the overhead bin, a can of soda and package of pretzels are built into the cost of the ticket.

Frontier, in contrast, brings a no-frills model to flying that aims to keep basic fares low and allow passengers to pay for the “extras” they want. Placing a bag in the overhead bin on a Frontier flight will cost you $30 to $60, depending on when and how you pay for it. Food, drinks and even seat assignments cost extra, too.

“The service on board some would describe as a little austere,” said Robert Mann of the airport consulting firm R.W. Mann and Co. in Port Washington, N.Y. “They put a lot of seats on the plane, in order to sell a lot of seats at low prices. But if you’re not an NBA player, you probably will be comfortable.”

Comfortable, if not totally happy. Frontier has one of the highest customer complaint rates of the major airlines, along with other low-cost carriers Spirit Airlines and Allegiant Air, according to government statistics.

Frontier’s schedule also differs from Delta and other legacy carriers such as American and United. The airline offers daily nonstop flights between RDU and Las Vegas and its hub, Denver, but most of its other nonstop flights happen anywhere from two to four days a week. Business travelers trying to get to a meeting in cities such as Detroit or Austin and back in as little time as possible will likely go with Delta, which has daily nonstops and more connections to choose from.

Of course, they’ll pay more for the convenience. A recent check online showed the main cabin fare for a round-trip Delta flight from RDU to Austin this month was $556, compared to $216 on Frontier on days when it offers nonstop flights. (Frontier’s fares are considerably higher on days when it doesn’t fly nonstop.)

Fewer flights means Frontier’s presence at RDU is not nearly as strong as the number of destinations would imply. Frontier has flown more than twice as many people out of RDU so far this year than last, making it by far the fastest growing carrier in the Triangle. But it accounted for just 6.1 percent of passenger boardings at RDU in June, with flights to 15 destinations. Southwest, which also served 15 destinations that month with a fuller schedule, had 19.5 percent of boardings.

Delta remains the airport’s leader, handling 30.7 percent of passenger boardings in June, followed by American, Southwest and United. RDU has seen 52 consecutive months of passenger growth, and all 10 airlines that serve the Triangle handled more passengers in the first six months of the year.

It’s not clear what impact Frontier’s lower fares might have on the cost of flying from RDU overall; government data on airfares tends to lag six months or so, said Kristie VanAuken, the airport’s vice president for communications and community affairs.

And Frontier is not the only airline that’s expanding at RDU. Even airlines that aren’t adding destinations are using bigger planes on some routes to increase capacity, VanAuken said, and that tends to push fares down as well.

“Most of our carriers are adding more seats here,” she said. “We see really strong travel demand now and for the foreseeable future. The airlines see that, too.

‘Kind of a legend’

Frontier Airlines was founded in 1994 by executives who worked for an earlier incarnation of the airline that went out of business in the 1980s. After a rocky history that included a bankruptcy, a merger and several owners, the airline was taken private by Bill Franke and his Phoenix private equity firm Indigo Partners in 2013.

Franke set about turning Frontier into a ultra-low-cost, no-frills carrier, drawing on the lessons he had learned from other airlines, starting with America West, where he was chairman and CEO from 1993 until 2001. Mann, who worked as a consultant for America West, said Franke saw then how inefficient U.S. air carriers were and how lowering costs would expand the demand for air travel by attracting more people who might otherwise drive, take a bus or train or not travel at all.

Since then, Franke has been an owner and executive in several low-cost airlines in Europe, South America, Asia and North America, where he was chairman of Spirit Airlines for several years.

“He’s been right over the long term, not just here but in a lot of places around the world,” Mann said. “He’s facilitated a lot of democratization of travel around the world. He’s kind of a legend in that respect.”

The low-cost model has led to changes in the industry as a whole. Most airlines now charge extra for checked luggage; Southwest markets itself as the exception with its “bags fly free” campaign. And Delta now offers a lower “basic economy” fare that doesn’t come with advanced seat assignment.

Mann says low-cost airlines aren’t necessarily less safe ones; any airline with an FAA certificate to fly is safe. “You don’t keep a license in this business without an excellent safety record,” he said.

Unhappy pilots

But the union representing Frontier’s pilots has warned that management is stretching the airline toward a breaking point. The Air Line Pilots Association says Frontier’s pilots are the lowest paid in the industry, earning 40 percent less than their peers flying the same kind of planes. The union and the company haven’t been able to agree on a new contract, and pilots are threatening to strike.

In a memo to pilots earlier this month, union chairman Tracy Smith said Frontier has not hired enough pilots to keep up with its expansion and is operating its planes more hours a day than other airlines, resulting in delays in maintenance that lead to canceled flights.

“Under the leadership of Frontier investors Bill Franke and Indigo Partners, our management devised a plan that has pushed the operation too hard and has cut costs and necessary infrastructure too deeply,” Smith wrote. “Based on our own analysis, we’re concerned that serious operational challenges will get even worse in the near future.”

Frontier rejected Smith’s claims. In a statement, the company said safety is its top priority.

“Our aircraft maintenance has remained robust and will always keep pace with our operations,” the company said. “We are investing in making Frontier America’s premier affordable airline, which includes hiring new pilots as our aircraft fleet and business continue to expand. Frontier is disappointed that pilots are spending energy spreading false narratives, rather than attempting to reach a new collective bargaining agreement that is fair, sustainable, and provides security for everyone.”

The transition to the ultra-low-cost model at Frontier was not without other problems. In 2016, the airline’s chief executive, David Siegel, resigned after the government said the airline had the highest complaint rate and the worst on-time performance of the nation’s leading carriers.

And those problems persist. According to the Federal Aviation Administration, 76.4 percent of Frontier’s flights arrived on time in April, the most recent month for which data is available, worse than all but one of the 17 airlines the FAA tracks. Frontier had the highest rate of consumer complaints per passenger, at more than three times the industry average, and had the second highest rate of passengers bumped from a flight because it had been oversold in the first quarter of the year (only Spirit Airlines was worse).

Steph Jeffries of Raleigh is not inclined to fly Frontier again after the return flight she, her husband and two children expected to board in Las Vegas was canceled last month because of mechanical problems. Because Frontier doesn’t have a reciprocal arrangement with other airlines, its initial offer to the family was a $150 voucher for a hotel and seats on the next available nonstop flight to Raleigh — four days later.

Jeffries, who teaches environmental science at N.C. State University, worked with a Frontier representative at the counter to see about flying through the airline’s hub in Denver the next day. The best connection there was a 1 p.m. flight to Denver, then the final leg home arriving at 6:15 a.m. the following morning.

“I could care less about things like peanuts and pretzels and soda on the flight,” Jeffries said. “But reliability is critical, and it was lacking.”

Frontier gave the family four $200 vouchers to use on other Frontier flights within 90 days. Jeffries doesn’t think she’ll use them.

“You sort of take a risk when you go with a low-cost carrier,” she said. “If the airline’s not reliable, I’m just not going to fly it.”

Nearly 200 new planes

The complaints have not slowed Frontier’s expansion. Last fall, Franke announced that he was buying 430 A320neo jets from Airbus, in a deal reportedly worth close to $50 billion, and said he will distribute them among Indigo’s four low-cost carriers. Frontier, which claims to have one of the youngest fleets in the industry, with nearly 80 A320 jets, will receive 134 of those new planes.

It’s not clear if Frontier will continue to put more of its planes on routes out of RDU. The airline has announced new flights five times this year, most recently last month when it said it would add six new nonstop flights this winter, including three to the Caribbean.

VanAuken said Frontier has told airport officials that it is pleased with the performance of its flights so far (Frontier did not respond to requests to speak to someone at the airline). She noted that Frontier will try routes that might not seem logical at first, such as the twice-weekly flights between RDU and Harrisburg, Pa., that begin July 25, just to see how they do.

“They see opportunity where maybe other carriers would not,” VanAuken said. And if it doesn’t work out? “They’ll take their airplane and put it somewhere where they think they can make more money with it. They’re opportunists.”

Richard Stradling: 919-829-4739, @RStradling
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