Frontier Airlines CEO Barry Biffle is confident that the carrier’s cost advantage will drive its growth — and success — over the coming decade. This confidence comes after it lost a bidding war for budget competitor Spirit Airlines to JetBlue Airways, and remains a fraction of the size of the U.S. big four, American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.
At an event Tuesday in Tampa marking the arrival of the Denver-based airline’s first Airbus A321neo, Airline Weekly correspondent Ted Reed spoke with Biffle on a range of topics from the Spirit deal to Frontier’s prospects and pilots. The interview has been edited and condensed for clarity.
Airline Weekly: Frontier’s attempted merger with Spirit didn’t work out. What does Frontier’s future look like if JetBlue and Spirit merge?
Barry Biffle: They are trying to merge with JetBlue and we’re on our own. This wasn’t the path we looked for in the beginning, but if this were to go through, 95 percent of the capacity in the United States will have costs 30 percent or higher than ours. So we feel like it’s kind of back to 1988, where if you were Southwest Airlines, that’s kind of what you enjoyed for the next 20 or 30 years. That would be the position we would be in.
If they merge, JetBlue has already said they’re going to take Spirit’s costs up to their costs. That’s going to price out a lot of consumers. And that pretty much makes us the sole nationwide ULCC [ultra-low-cost carrier]. My comparison to Southwest is that you haven’t had that extreme of a disparity between cost structures since the late ’80s with Southwest. That’s what helped fuel their growth over the last three or four decades. Because again 95 percent will have 30 percent to 80 percent higher costs than us.
We’ve announced that we will be back to sub six cents [cost per available seat mile excluding fuel] in 2023. [Post-merger] Spirit is going to be well into the 8-9 [cents] range. It will be 40 percent to 50 percent higher than us. The competitive dynamics for us is we basically have no natural competitor.
AW: Will the merger go through?
Biffle: I have to assume it goes through. I originally thought it wouldn’t go through, [but] I believe that JetBlue management and their board really think they have a deal or they wouldn’t risk $500 million in reverse termination fee. I assume they have to have confidence that they are going to get it through.
AW: How can you be a national airline with only 116 aircraft, and about 500 daily departures? And do you connect any passengers?
Biffle: We serve, within 90 minutes of driving, 90 percent of the U.S. population. We’re in over 100 cities. It’s all point to point. We have a small amount of connecting traffic. Those are by accident. We fly point to point. We make some connections but It’s less than 20 percent of our traffic. We connect some in Denver, some in Orlando, and some in Las Vegas. They’re all very similar, about 75 departures a day.
AW: Where will you be in five years?
Biffle: By the end of the decade, we will almost triple our size — not necessarily in fleet, but in passengers, because we’re also growing with bigger gauge planes. There are 158 more of these [A321neos] coming with 240 seats. We have 116 as of this second, counting this one and one more that is transferring title [from Airbus] today. We picked this one up a week and a half ago, I was there [in Hamburg].
They are all A320 family. We have a mix of A320 classics, A321 classics, A320neo and, now, the A321neo.
We’re going to be growing a lot. We look to where the fares are the highest, and where we can provide the most value in lowering fares for consumers.
AW: What’s different about the A321neo?
Biffle: It is the most efficient configuration that has ever been flown in the U.S., with 240 passengers in 41 rows. Pitch is 28 or 29 inches. When this starts flying later this week, it will be the greenest airplane to ever fly in the U.S. It gets 120 miles per gallon per seat. We have the A321 today, but it only has 230 seats. Now we will burn less fuel and have more seats, because of the new engines.
If you burn the least fuel per seat, that makes you the lowest greenhouse gas [producer] by a mile. Airlines today get 60 miles per gallon per seat. This gets 120.
AW: How do you compete for pilots?
Biffle: Today we enjoy having a competitive rate, but our pilots make as much money or more than any other airline in the U.S. because they upgrade to captain in under four years. Then, because we’re growing, their seniority is higher sooner, so they’re going to have weekends and holidays off ten years before anybody else. Also, we’re spending a significant amount of time making sure that our pilots get over six hours of flying per day on their lines. So, what we believe that’s going to do, is that it will enable our pilots to have the lowest days per month worked. They’ll have more days off. If we can pay them the best, have the best lifestyle because they’re relative seniority is higher, and they can have more bases as an option, we think we have the best package.
AW: What do you think about the Justice Department’s antitrust case against the northeast alliance between American and JetBlue?
Biffle: Everybody in the industry is watching. The government is alleging that it is anti-competitive. So we’re all trying to observe and see where this goes. When you look at it from our point of view, it’s very hard to justify — when any one of the big four that [together] control 80 percent of the market — when they get together with other people to control parts of the market, it’s kind of difficult. I think we could use more competition in this country and I can’t see how this helps it.
AW: What did you learn during your years at US Airways? (US Airways merged with American in 2013)
Biffle: I went through two bankruptcies at US Airways so I learned a lot. One of the things I learned, which was probably the most important: The best way to stop losing money is to stop doing things that lose money. We had city ticket offices. We had a hub we closed in Pittsburgh that we kept two clubs open in. The list goes on and on. We had a Noah’s ark of airplanes. We had two of everything. In the late nineties, in the back of the magazine, it took a whole page to show all the equipment types. And you take the headquarters. The headquarters should have been in Charlotte. But because they didn’t want to make a decision, we picked a third city [Arlington, Va.] that was the most expensive of all of them. That drove the labor rates up for your headquarters. The list goes on and on.