Dive Brief:
- Frontier Airlines is heavily promoting its bundled fares and loyalty offerings as the carrier tries to woo customers amid economic uncertainty, executives said during a Q1 2025 earnings call last week.
- The airline is also cutting flights during off-peak days of the week in response to falling travel demand among leisure customers. From May forward, the carrier is reducing capacity on Tuesdays, Wednesdays and Saturdays.
- “In this environment, we're focused on the elements of our business that are within our control, primarily capacity and management of our costs and capital expenditures while continuing to provide our customers with what we believe is the best overall value in air travel,” CEO Barry Biffle said on the earnings call.
Dive Insight:
Like other airlines, Frontier is focusing on its loyalty program and premium offerings to try to entice more flyers amid economic uncertainty and falling demand. But unlike other airlines, the budget airline is also looking to win on cost.
The value proposition of the New Frontier, the airline’s transformation plan for 2025, takes on more importance in this environment, President Jimmy Dempsey said.
“This value proposition is clear with the introduction a year ago of the new Frontier, which in this environment takes on heightened importance and is strengthened by our enhanced product offerings and loyalty upgrades,” Dempsey said. “For example, our economy bundle provides customers with a direct comparison to other airlines' economy fares by offering a carry-on bag, seat selection, and no change cancel fees. The economy bundle provides a standardized product enabling us to compete and win on cost.”
While the airline had seen high demand in January, with revenue per available seat mile up 19% year over year, demand among leisure customers dropped precipitously in March, according to Biffle. Revenue per available seat mile ended up flat for the quarter.
“Our results for the quarter were lower [than] original expectations due to a disruption to travel demand and mark,” Biffle said. “The good news is we've seen booking stabilize.”
Total operating revenue grew 5% year over year to $912 million, and the airline reported a net loss of $43 million.
Loyalty and customer engagement are key to the New Frontier as the airline looks to offer customers the lowest fare and best overall value, SVP and Chief Commercial Officer Bobby Schroeter said. Since last year, the airline removed change fees from bundled products, added free checked bags for co-brand cardholders and simplified the path to elite loyalty status.
The airline increased its premium offerings with the launch of Upfront Plus last year, and plans to roll out first-class seating later in 2025.
“We previously announced that Frontier miles will soon be redeemable for bundles and that an unlimited companion pass benefit is coming as well for our top tier elite members, both of which will further strengthen the appeal and competitiveness of the program,” Schroeter said.
The airline is also trying to capitalize on Southwest Airlines’ elimination of its marquee policies. Frontier made a play for customers “who feel underserved by traditional airline programs,” Schroeter said, with a promotion for free checked bags and offering its economy bundle gratis.
“One of the key advantages of Frontier miles is that it delivers benefits faster than other frequent flyer programs, where customers actually realize real value in the form of seat upgrades and added perks even at the lowest tier levels,” Schroeter said.
The airline launched a new Android app and is on track to roll out a redesigned iOS app in the coming weeks. “Together, these upgrades will significantly improve the customer experience with more intuitive design and expanded self-service tools,” Schroeter said.
