Frontier Wants a Partner, but Does a Partner Want Frontier?
Republic Airways CEO Bryan Bedford said this week that subsidiary Frontier Airlines would be open to a marketing partnership with a network airline. That's not a surprise, but I do wonder if there's anyone out there that would really be that interested. I don't see any great opportunities here on the surface, but if you include Republic's regional flying in the mix, it could create some possibilities.
It's easy to point to the American (AMR)/JetBlue (JBLU) deal in New York as a way that low cost carriers and legacy carriers can work together, but there are some specific points in that deal that make sense. The airlines are cooperating at JFK, an airport that's effectively at capacity, so even if the airlines wanted to add more service on their own, they can't. They also both have hubs at JFK but without much overlap. JetBlue has a primarily domestic and Caribbean system while American has more of an international bent. So taking JetBlue's domestic feed and putting it on American's international operation creates a lot of opportunity. It's good for everyone.
You can also point, as Bedford has done, to deals between Alaska (ALK) or Hawaiian (HA) and many of the major carriers, but those have natural feed points as well. Everyone serves Hawai'i, but Hawaiian is unique in connecting all the islands. It's natural for airlines to partner with Hawaiian to get that feed. And Delta and American use Alaska's north/south network in LA and Seattle to feed their mostly east/west route structure. Again, it works very well.
Frontier is in a different boat. It has two hubs: Denver and Milwaukee. Denver, of course, has both Southwest (LUV) and United (UAL) with sizable operations, but the airport is not full and the airlines overlap more than not. We can probably forget about Southwest since that airline is in the middle of a merger with AirTran and would have enough tech and labor troubles to even bother worrying about a codeshare.
But what about United? Take a look at this Venn diagram I put together showing Denver overlap:
I apologize for using airport codes and not city names, but you get the point. The vast majority of destinations that Frontier serves are also served by United. Frontier doesn't add that much to United unless that airline wants to start pulling back service and let Frontier take over. That's not going to go over very well with labor, and I'd be surprised to see United take a shot at something like that right now.
There's also Milwaukee, but then it's back to Southwest (along with AirTran) and I just can't imagine Southwest looking to take something on like that.
Could others be interested? Sure, maybe American, Delta, or US Airways would want to do something, but the value of such a partnership is far less since there isn't any really strong natural point to increase feed.
There is, however, an additional wrinkle here. Frontier's parent, Republic, operates Express service for both Delta and US Airways. It doesn't do it for American, but American is expected to sell off its Eagle unit if it can find any airline willing to buy. So a deal with Frontier begins to look significantly more appealing for these guys if it means improvements to the regional flying contracts as well.
There are a lot of moving parts here, but it seems like only a multi-layered deal would really bring enough benefits to both sides to make it worthwhile.
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