Frontier Aims at Smaller Markets

Frontier Airlines will concentrate its near-term growth on service to Mexico, Canada and smaller U.S. cities, allowing it to sidestep fierce competition from Southwest Airlines and other carriers, a company executive said Thursday.

The Denver-based carrier still might add new service to larger cities. But "the power we have over Southwest . . . is to generate incremental traffic where they're not taking their passengers," Paul Tate, the company's chief financial officer, said at an airline conference in New York City.

"They're not going to fly to Vail or Aspen . . . so it's important for us to take full advantage of those (kinds of) markets."

Frontier has come under increasing pressure in Denver this year with the emergence of United Airlines from bankruptcy and the arrival of Southwest.

Part of its strategy in recent years has been to diversify away from its Denver hub, in part so the company isn't reliant on one market. Frontier has been expanding its Mexico service and adding flights that don't involve flying through Denver, as well.

It's also enhancing its fleet.

Next year, the company plans to begin flying 10 turboprops that will serve cities within a 650-mile radius of Denver. And it plans to add eight new regional aircraft in coming years.

Tate said Frontier expects to announce within 45 days which company will operate its regional planes. Horizon Air currently flies nine regional jets for Frontier, but the two companies have decided to part ways.

The company also is looking at new ways to increase revenue by offering additional products and services that go beyond plane tickets, Tate said at the conference, hosted by Calyon Securities. The carrier plans to begin offering travel insurance in January and will pursue offering package deals.

INFOBOX

Highlights

* Frontier will focus more of its growth on flying international routes and to smaller domestic destinations.

* The carrier will start selling travel insurance in January and is exploring other ways to increase ancillary revenue.

* It expects to announce within 45 days which company will handle its regional flying.

* Frontier will take a look at any assets put up for sale if US Airways is successful in its attempt to buy Delta Air Lines.

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