- Frontier Airlines promoted CFO James Dempsey to president of its customer care and operations strategy, the airline announced last week, along with a number of top leadership changes. Dempsey now reports to CEO Barry Biffle.
- The C-suite refresh comes as the budget airline is rethinking its frequent flyer program, offering consumers up to 20 miles for every dollar spent, Frontier said Tuesday. Rewards members can now receive 10 miles for every $1 spent.
- Beginning in January, customers will have access to four status levels, each of which offer advance seat assignments, priority customer care, family pooling and priority boarding. Frontier Miles program holders will also have no change or cancelation fees if they make flight changes at least a week ahead of departure.
While Frontier receives an overall low rating from Consumer Affairs — earning just 1.2 stars out of 5 across more than 2,250 reviews — customers generally know what to expect. Frontier is known as a bare bones airline, one where customers must pay for higher levels of service, purchasing such benefits as seat selection or carry-on bags.
Now, with its new rewards program, if a customer flies enough with Frontier, some of those benefits will eventually be included.
At each customer tier — silver, gold, platinum and diamond — the miles multiplier increases. For every dollar spent, a silver rewards member (those with 10,000 qualifying miles) will earn 12 miles, but a diamond member (those with 100,000 qualifying miles) will receive 20 miles.
The program revamp is intended to earn customers more benefits from the outset and a push to increase loyalty.
Frontier Group Holdings, the parent company of the airline, is up against what it calls "challenging operating conditions" thanks to tough summer weather and high fuel costs, executives said during the Q2 earnings call on Aug. 1. But it still recorded a net income of $71 million in Q2, with revenue that reached $967 million and was up 6% year over year, according to its Q2 earnings.
"Our continued focus on cost management [helped] drive a beat on our non-fuel operating expense," Biffle said on the earnings call. "Our total cost structure is significantly lower than the industry average generating an advantage of more than $70 per passenger today."
The airline’s goal is to maintain low fares and grow engagement, Biffle said. To do so, it's betting on loyalty programs and subscription-related products that capitalize on return customers.
The rewards program refresh will feed into that strategy, incentivizing loyalty with perks customers usually have to pay for.
It's an area that will, in part, fall under Dempsey's purview. Dempsey will lead commercial customer care, including contact centers and customer relations, alongside operations research, design and planning. Before joining Frontier as CFO in 2014, he held roles at Ryanair Holdings and PwC.
The C-suite shuffle includes the promotion of Mark Mitchell to take over Dempsey's role as senior vice president and CFO. Frontier also hired Rajat Khanna from Lowe's Companies to take over as SVP and CIO.