Frontier Interested in Partnerships Similar to the One Inked Last Month with AirTran

Dec. 7, 2006
Fresh off a new alliance with AirTran Airways that it says will add as much as $6 million in annual revenue, Denver-based Frontier Airlines is interested in pursuing other similar ventures.

Fresh off a new alliance with AirTran Airways that it says will add as much as $6 million in annual revenue, Denver-based Frontier Airlines is interested in pursuing other similar ventures.

"We're definitely open," Frontier Chief Financial Officer Paul Tate said in an interview on Wednesday. "Well be happy to talk to anybody about it."

Also on Wednesday, Frontier reduced its fiscal third-quarter guidance, forecasting a loss of 12 to 17 cents per share because of weak November passenger traffic and higher than expected fuel costs. The company had previously forecast a break-even quarter.

Shares of Frontier fell 38 cents, or 4.71 percent, to close at $7.68 on the Nasdaq Stock Market Wednesday.

On Nov. 14, Frontier Airlines Holdings Inc. and AirTran Holdings Inc. agreed to a marketing and frequent flier partnership that will double the number of destinations available to each carrier's customers by encouraging passengers to connect from one carrier to the other.

The carriers' reservation systems, as well as third-party Web sites, will refer customers seeking to fly outside of their traditional route systems to the partner airline, and also enable them to earn and redeem frequent flier miles through the partner.

For Frontier passengers, the linkage opens up more destinations primarily along the East Coast; AirTran customers will gain access to markets in the West and Mexico.

While Frontier is not actively negotiating with any other carriers, Tate said similar relationships might make sense with airlines such as privately held Spirit Airlines, JetBlue Airways Corp. and Midwest Airlines, a unit of Midwest Air Group Inc.

Tate said the linkage with AirTran will help "de-regionalize" Frontier, which has faced increased competition at its Denver hub from Southwest Airlines Co. and UAL Corp.'s United Airlines. More importantly, it gains access to "incremental revenue" and new markets without having to buy new planes or hire more employees.

"It's a no brainer," said Tate, who expects anywhere from $5 million to $6 million of additional annual revenue as a result of the partnership.

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