Frontier Airlines, the Denver-based regional carrier, is about to become very cheap.
This week Bill Franke secured an agreement to acquire the carrier. Franke is a seasoned airline leader. Most recently he revived Spirit Airlines, turning it into an ultralow-cost carrier with exceptionally low fares, relatively poor customer service and lots of fees. The strategy was an enormous success.
Franke is apparently planning to embrace a similar strategy with Frontier.
Bill Franke clearly understands marketing strategy. He knows there are only two ways to succeed in a market with ample supply: be cheap or be different. With Spirit he fully the embraced the strategy of being cheap. Now it is apparently going to do the same thing with Frontier.
This is good news for Frontier. The airline has been struggling for many years, searching for a reason to exist and getting battered in Denver by the both United and Southwest. The outlook wasn’t encouraging, either.
By becoming an ultralow-cost carrier, Frontier can create a distinct place to play in the market and attract new flyers.
This move puts carriers like Jet Blue and Virgin America is a very difficult spot. These carriers have been successful by providing good service and reasonable prices. To some degree, they were both cheaper and better than United, Delta and American. This won’t work as well in the future. Fliers looking for low fares will shift to the very cheap carriers like Spirit and Frontier. Travelers looking for service and a broad network will stick with the big players.
Going forward, carriers will have to embrace a clear strategy.
United, American and Delta will be global, premium brands.
Spirit and Frontier will be ultralow-cost players.
Jet Blue, Virgin America and Southwest will have to figure out what to do.
Franke may understand marketing strategy, but he does not know how to execute with marketing communications or digital sales (web). Frontier Air has one of the worst and most amateur websites in the industry. The UI is a mess, with confusing visual elements that make evaluation of offerings and choice next to impossible. Their marketing and brand terminology is obscure and unappealing. Together, these marketing failures inhibit efficient evaluation, selection and purchase of by customers!
I don’t believe low cost and “relatively poor customer service” will survive as a strategy long-term. Just like low cost and relatively poor quality was not a good strategy for goods manufacturers, service industries that don’t provide better than average customer service will find their customer base eroding over time.
Customers may initially flock to low cost providers but poor customer service will push them away over time as the price differential to the alternatives will not be significant enough to put up with the poor service.
I was initially surprised to see Southwest’s name make your list of airplanes that need “to figure out what to do”. Southwest has been lauded in the past for its distinct strategy of low fares and servicing smaller, regional airports.
However, after taking a look at one of its recent advertisements (https://www.youtube.com/watch?v=4S-snuCDBXc), it is clear that the brand has made a shift away from its roots. The advertisement has no call out of low fares or “bags fly free”. There is an element of its fun tone still with the song “Some Nights” by Fun playing in the background, but for the most part the ad illustrates Southwest is trying to stand for something other than low cost. Southwest is a great example of Marketing Strategies needing to be evaluated continually as markets change to ensure it is drifting with consumer demands. I am not confident how Southwest is trying to differentiate itself in its new campaign. If the airline doesn’t clearly communicate its differential value in the near future, it might need to leverage its low cost heritage instead.