Frontier Airlines plans to expand its low-fare network to several smaller markets following the acquisition of up to 20 Bombardier Dash 8 Q400 turboprops.
The deal marks the continued comeback of turboprops in the regional market. Turboprop orders have surpassed regional jet orders since the beginning of 2005 but US carriers until now have not participated in this trend. Currently there are only two operators of 70-seat turboprops in the continental US. As fuel prices continue to rise, US majors such as Continental Airlines and US Airways are considering 70-seat turboprops and US low-cost carriers are considering copying the model set by UK-based Q400 operator flybe.
“Turboprops are nothing new but there is renewed interest,” says Raymond James & Associates regional analyst Jim Parker, pointing out 70-seat Q400s are 28% more fuel efficient than 70-seat regional jets and have the same operating costs as 50-seats regional jets.
Although the addition of turboprops adds an element of complexity which low-cost carriers typically try to avoid, Frontier chief executive Jeff Potter believes Q400s will increase feed into its Denver hub, where Frontier is under assault by Southwest and United. “When you draw a 650-700 mile circle around Denver what we see is a lot of opportunity, but we didn’t necessarily have the right aircraft,” he says.
Unlike the 70-seat Bombardier CRJ700s which already feed Frontier, the turboprop “gives us the flexibility to serve some of the Colorado mountain destinations that we couldn’t otherwise do”. That makes resort towns and secondary cities such as Aspen, Durango Grand Junction, Steamboat and Telluride candidates for Q400 services.
Frontier is creating a new subsidiary to operate the Q400s from May 2007. It will hire new employees for the subsidiary, Lynx Aviation, at lower pay scales than unionised Frontier employees.
Potter says Frontier also wants to expand the number of 70-seat regional jets in its network from nine to up to 20 and is seeking bids from operators. Horizon Air now operates nine CRJ700s for Frontier but is putting them back in its own network and has decided not to pursue the new Frontier contract. ■
Source: Airline Business
