Republic Airways Holdings expects its Frontier Airlines subsidiary to post load factors of at least 90% this summer as the low-cost carrier starts to benefit from the network synergies generated by its merger with Midwest Airlines.
Republic CEO Bryan Bedford acknowledges Denver-based Frontier and Milwaukee-based Midwest, both of which were acquired by Republic last year and are now in the process of merging under the unified Frontier brand, struggled early this year. But on 3 June Republic reported a May load factor of 85% for Frontier, including the Midwest operation, and Bedford predicted at the 4 June Low Cost Airlines World Americas Conference in Miami the Frontier load factor should reach 90% in the third quarter.
"We had a lot of fits and starts in the first quarter which we've figured out," Bedford says. "The [Frontier and Midwest] networks are finally pulling together."
Republic initially projected network revenue synergies of $10 million from the Frontier-Midwest merger. Bedford now says that estimate was significantly too low.
Bedford adds that barring any major unforeseen event Frontier will post "unheard of numbers" this summer. In addition to the recent improvement in Frontier's load factor, Bedford says, yields are also now starting to track up on a year-over-year basis.
He says uptake for Frontier's extra legroom product, dubbed Stretch, also has been high. "It's full. We probably could actually use more Stretch seating," Bedford told Flightglobal after his speech.
The extra legroom section is now available on Frontier's fleet of Airbus A320 family aircraft. Republic unveiled plans earlier this year to add a Stretch seating section to the Embraer 170s now operating in the Frontier network. Bedford says the first E-170 with the new configuration will roll out in June and the entire E-170 Frontier-branded fleet will have the product by the end of November.
Republic is also now in the process of retrofitting its E-170 fleet with Aircell's Gogo in-flight internet system. Bedford says Gogo will be available on the E-170s in Frontiers' network from August.
He says there are no plans to outfit these aircraft with the LiveTV product which is already on Frontier's A320 fleet. He says Republic decided that offering live television systems on the E-170s was not important given the aircraft are used on short-haul sectors.
The Frontier network also currently includes 12 smaller regional jets operating at the Milwaukee hub. Bedford says Republic is now looking at expanding this operation by also basing small regional jets in Denver.
Source: Air Transport Intelligence news
