Frontier airlines operate high-fare markets to improve earnings

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Frontier Airlines, a U.S. no-frills carrier, is adjusting its strategy to prioritize growth in “high fare” markets like Seattle and Detroit over leisure markets such as Las Vegas and Florida in a bid to enhance earnings, CEO Barry Biffle informed Reuters.

Despite a travel boom, Frontier has struggled to turn a profit in three of the last four quarters, prompting a reevaluation of its business model.Biffle attributed Frontier’s challenges to excess industry capacity in key leisure markets, resulting in depressed airfares. The airline’s fare revenue per passenger fell by 22% in 2023 compared to the previous year.

In response, Frontier is focusing on increasing revenue by catering to premium travel demand. This includes adding more seats with extra legroom and introducing business fares targeted at small companies. According to Biffle, demand for premium seats has been growing at a double-digit pace, now accounting for up to 12% of the seats on Frontier’s flights.

Source: Reuters

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