Aug 13, 2024 • 10 min read
12.08.2024 - 20:20 / thepointsguy.com / Scott Kirby / Ed Bastian / Delta Ceo / Barry Biffle
It seems Frontier Airlines CEO Barry Biffle has heard enough criticism of the U.S. ultra-low-cost airline industry — even as the carrier projects more financial losses in the coming months and plans to reduce flights on certain days of the week and push back new aircraft deliveries by years.
Speaking to analysts last week, Biffle insisted the airline's efforts to cut costs — a hallmark of the budget airline strategy — have Frontier well positioned for 2025 and beyond.
"Our cost advantage is real, it's durable, it's sustainable," Biffle said during a conference call Thursday.
Biffle made the declaration with a confidence and a cadence evocative of one frequently used in recent months by United Airlines CEO Scott Kirby, although Biffle had a different take on the state of the ultra-low-cost carriers.
For many months, Kirby has boasted of United's "structural, permanent and irreversible" advantage atop the U.S. industry (alongside Delta Air Lines). He's also criticized the business models of budget airlines at the same time, as low-cost carriers have struggled to regain financial footing amid a demand for premium seats and international travel that's strongly favored the larger network carriers.
That critique (echoed more subtly last month by Delta CEO Ed Bastian) has grown sharper as the U.S. airline industry has faced sagging domestic fares — and profits — in 2024, largely caused, according to airlines, by a surplus of flights flooding the industry with stiff competition, forcing major route shake-ups and seismic shifts in how some airlines do business.
"The pressure other U.S. airlines are feeling today is due in large part to their unprofitable flying in many domestic markets. It was always inevitable that carriers would begin to cancel this unprofitable flying," Kirby told analysts last month in comments that were more measured than when he predicted some budget carriers' demise while speaking on an industry podcast earlier this summer.
Biffle, in a seemingly defiant assessment of his own, deflected some blame for the industry's challenges Thursday and argued that the larger carriers, too, have flooded the industry with flights, pushing down fares.
"We see several hundred routes for the high-cost carriers that are up at least 50% or more capacity versus 2019 ... and I think there's over 150 of them that the capacity's more than doubled," Biffle said. "Best way to stop losing money is to stop doing things that lose money."
Of course, when it comes to money, Frontier has had its challenges of late.
Sure, the carrier was profitable in the second quarter of this year, but the second quarter is prime earnings season for all airlines. As such, it's when many carriers hope to line their coffers ahead of
Aug 13, 2024 • 10 min read
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