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Frontier At BOS: What Went Wrong?  
User currently offline727LOVER From United States of America, joined Oct 2001, 5962 posts, RR: 17
Posted (10 years 2 months 3 weeks 3 days 13 hours ago) and read 3573 times:

Why did F9 quit an important destination like BOS?  Confused


Listen Betty, don't start up with your 'White Zone' s*** again.
21 replies: All unread, jump to last
 
User currently offlineOzarkD9S From United States of America, joined Oct 2001, 4880 posts, RR: 22
Reply 1, posted (10 years 2 months 3 weeks 3 days 11 hours ago) and read 3478 times:

The official reason was inadequate, consistant gate space and ground handling. Once the new A terminal opens up for DL I hope space can be made for F9's return. Funny how JetBlue found a couple of gates though, isn't it?



Next Up: STL-TPA-BWI-PWM-BWI-STL
User currently offlineNavairjax From , joined Dec 1969, posts, RR:
Reply 2, posted (10 years 2 months 3 weeks 3 days 10 hours ago) and read 3387 times:

I don't doubt they closing of terminal A played a part but AS may have played a factor when they began service from BOS. I'm not sure of the top west coast destinations from BOS but nonstop service to SEA eliminated the need for a one stop trip. (Although F9 originally continued its BOS-DEN to SAN, I believe they changed it to BOS-DEN-SEA) UA already provided enough nonstop service to DEN and between UA and AA California is served well enough once again with nonstop service to possibly kill the need.



.


User currently offlineMariner From New Zealand, joined Nov 2001, 24656 posts, RR: 86
Reply 3, posted (10 years 2 months 3 weeks 3 days 10 hours ago) and read 3349 times:
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Navairjax:

Sorry, but the arrival of Alaska at Boston had little to do with it. Frontier's flight may have been BOS/DEN/SEA, but DEN is the major hub, and most passengers probably weren't going to SEA but other Frontier destinations in the west. I used to fly BOS/DEN/LAX frequently.

Apart from the closing of Terminal A, the main culprit was 9/11, when business out of Boston dropped off a cliff.

Before 9/11, Frontier was doing well out of Boston and was talking about a third daily flight.

SunValley, who posts here, has figures saying that after 9/11 the load factor dropped to 26%.

Add this to the fact that Frontier was paying an arm and a leg for new gate space, meant the end of the route.

cheers

mariner



aeternum nauta
User currently offlineDIA From United States of America, joined Jan 2001, 3273 posts, RR: 28
Reply 4, posted (10 years 2 months 3 weeks 3 days 10 hours ago) and read 3335 times:

". . .after 9/11 the load factor dropped to 26%."

I've read/heard the same. Good reference Mariner.




Ding! You are now free to keep supporting Frontier.
User currently offlineLH423 From Canada, joined Jul 1999, 6501 posts, RR: 54
Reply 5, posted (10 years 2 months 3 weeks 3 days 7 hours ago) and read 3249 times:

OzarkD9S: You do raise a good point about how B6 found gate space with one less terminal than when F9 was here but it wasn't gate space that they had a problem with so much as where the gate space was.

Back then the only gate space available was in Terminal A, the oldest and shabbiest of the terminals. Originally built by EA in the 1960s it was ill-equipped for today's airline standards. The gates B6 procured were part of the agreement of the CO-DL-NW alliance in which the carriers had to give up a certain number of gates if their daily utilization of the gates was under a certain number of turnarounds. CO having only a couple of gates, and DL with a bustling Song and DL connection operation did not need to give up any gates. Northwest, however, being in Terminal E (the IAB) had gotten several gates from Massport in the 80s to support their growing European Gateway hub. That has since died and with only a daily AMS flight plus a few flights to the major hubs and MKE, NW's gate utilization was low. They, therefore, were forced to give up two gates in Terminal E to be compliant with the rules. And let me tell you, NW probably HATED doing that as gates in Terminal E are prime real estate and NW knows that Massport has wanted to move them for a while to open up to extra gates desparately needed for international ops. Unfortunately, that didn't happen and B6 got 1C and D, both gates that can't handle widebody ops! I would imagine a gate shake up next year when DL moves into the rebuilt Terminal A.

Unfortunately, F9 did well but UA became predatory over the route and dropped prices. Unfortunately they didn't dump capacity! I would have loved to have seen a 763 or 777 on one of the flights  Smile

LH423



« On ne voit bien qu'avec le cœur. L'essentiel est invisible pour les yeux » Antoine de Saint-Exupéry
User currently offlineONT 737 From United States of America, joined Mar 2001, 584 posts, RR: 2
Reply 6, posted (10 years 2 months 3 weeks 3 days 2 hours ago) and read 3181 times:

I talked with a few of our people who came back to LGB from the BOS start up and they had a few things to say about the warm reception from the folks at NW. (please note the scarcasm) There is not much love going around over there in Terminal E.


"The world is run by C students"-Harry Truman
User currently offlinePVD757 From United States of America, joined Aug 2003, 3406 posts, RR: 17
Reply 7, posted (10 years 2 months 3 weeks 3 days ago) and read 3091 times:

Mariner has it best, an F9 corporate rep. told us here in PVD that the situation in BOS was terrible all around. The gate space issue, UA's competition, 9/11, loads tanked, and the airport basically could have cared less. They were very unhappy about the entire BOS experience. He told us that is very unlikely they would return to BOS and has turned thier focus on PVD & MHT, similar to what WN did to surround the BOS market. They would also see little or no competition from PVD/MHT to DEN on UA or B6 anytime soon. He also mentioned BDL and PHL are the other northeastern cities they are looking at. The #1 concern he stated was competition, they want to avoid direct competition to DEN on the east coast whenever possible.

User currently offlineJetBluefan1 From United States of America, joined Dec 2003, 2937 posts, RR: 14
Reply 8, posted (10 years 2 months 3 weeks 2 days 18 hours ago) and read 2918 times:

that didn't happen and B6 got 1C and D

They actually got E1A and E1B.

Anyway, I'm pretty sure the reason F9 dropped BOS from DIA was because of low loads. That's why I'm still baffled why JetBlue would start the route. If anything, F9 would get higher loads due to connecting passengers. But as far as I'm conserned, JetBlue needs to keep the route to keep the fares low...$492 rt. is outrageous for UA's daytime flights. JetBlue offers $158 rt., but it's a redeye  Sad

JetBluefan1



Most people on a.net hate JetBlue. Get used to it.
User currently offlineMariner From New Zealand, joined Nov 2001, 24656 posts, RR: 86
Reply 9, posted (10 years 2 months 3 weeks 2 days 18 hours ago) and read 2894 times:
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JetBluefan1:

Yes, it was low loads. But, as I said above, that was after 9/11. Prior to that the loads had been good.

I see no reason why JetBlue shouldn't do quite well on the DEN/BOS run - I'm just not sure about it being a red eye.

cheers

mariner



aeternum nauta
User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4467 posts, RR: 34
Reply 10, posted (10 years 2 months 3 weeks 2 days 12 hours ago) and read 2783 times:

Mariner has it best, an F9 corporate rep. told us here in PVD that the situation in BOS was terrible all around. The gate space issue, UA's competition, 9/11, loads tanked, and the airport basically could have cared less. They were very unhappy about the entire BOS experience.

Massport certainly seems enthusiastic about JetBlue's arrival. I've read in the Globe and other places that Massport is very interested in low-fare carriers these days. Which makes sense--as others have noted, BOS got hammered by 9/11. Also, once high-flying downtown mutual-fund companies and other Boston-area employers are probably more cost-conscious these days than they were in fat-happy 1999, like employers nationwide.

I wonder if Frontier would find a better attitude by Massport, and perhaps improved load factors, if they returned. Of course, now JetBlue's there, and F9 would be going up against both them *and* UA. UA's got a tougher attitude these days (one that bears DOJ attention, in my view) and will probably put TED on the route if they haven't already.

Jim


User currently offlineCapt078 From United States of America, joined Jul 2003, 421 posts, RR: 1
Reply 11, posted (10 years 2 months 3 weeks 2 days 11 hours ago) and read 2756 times:

it's important to note that jetblue is operating many more frequencies and many of them are operated off peak (read: red-eye and late evening departures). compare this to frontier's low frequency service during peak hours to one destination (den), and it is easy to realize the pressures bearing down on the airline to achieve high load factors. not to mention logan's high prices, relatively high amount of delays, and near chaos, i do not blame frontier for pulling out.

i would love to see frontier back at bos. i flew f9 several times and loved every flight. plus they have the best commercials around. i do believe that with the impending additional gate space frontier could return, though i would think they would need to fly increase frequencies and possibly add another destination (though to where i do not know - perhaps san diego or another underserved western city).


User currently offlineCoronado990 From United States of America, joined Oct 2003, 1593 posts, RR: 2
Reply 12, posted (10 years 2 months 3 weeks 2 days 11 hours ago) and read 2703 times:

Although I would like to see more point-to-point flights on F9 out of SAN, I think that, eventually, B6 would be more interested in the BOS-SAN route (although gate space at SAN for B6 is at a premium as well).




Uncle SAN at your service!
User currently offlinePVD757 From United States of America, joined Aug 2003, 3406 posts, RR: 17
Reply 13, posted (10 years 2 months 3 weeks 1 day 23 hours ago) and read 2635 times:

Logan's about-face is well noted, but the bridges have been burned. They treated small carriers and charter operations like crap for too long. Capt078 knows all too well of the high costs and intangible costs/negatives that come with operating out of BOS. If you don't have enough revenue (frequencies with above BE loads), you'll never make BOS work, especially in the face of strern competition (UA and now B6).

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13275 posts, RR: 62
Reply 14, posted (10 years 2 months 3 weeks 1 day 21 hours ago) and read 2565 times:
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Unfortunately, F9 did well but UA became predatory over the route and dropped prices.

Sigh...here we go again...when the LCC enters the market and drops prices, they're "good competitors," but when the major matches their fares they're somehow considered "predatory" ?!?  Nuts

Why this lame double-standard?



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineAPAOps5 From United States of America, joined Dec 2003, 98 posts, RR: 0
Reply 15, posted (10 years 2 months 3 weeks 1 day 14 hours ago) and read 2419 times:

EA CO AS:

The difference is, if a larger main line airline drops their price to compete w/ a lower fare carrier they usually drop their fares below a break even load factor. Typically lower fare carriers can offer lower fares because they have lower costs, where as a mjor carrier may and usually does have higher costs. Thus it is considered 'predatory' for a major carrier to compete on the same route at the same fares, because it is nearly impossible for them to make a profit let alone break even. The only reason they do it is to bully out the typically smaller 'lower fare carrier', thus is predatory in nature. Hopefully my wording made some sense.


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 16992 posts, RR: 48
Reply 16, posted (10 years 2 months 3 weeks 1 day 14 hours ago) and read 2368 times:

"I see no reason why JetBlue shouldn't do quite well on the DEN/BOS run - I'm just not sure about it being a red eye"

*How bout B6 has no virtually no presence in DEN or BOS, especially no connecting opportunities?

*It's a redeye

*If F9 couldn't make a dime on it with plenty of connecting opportunities during the day, that obviously means that the O&D traffic wasn't that great either...why would B6 do well at 0-dark-hundred?



E pur si muove -Galileo
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13275 posts, RR: 62
Reply 17, posted (10 years 2 months 3 weeks 1 day 14 hours ago) and read 2330 times:
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The difference is, if a larger main line airline drops their price to compete w/ a lower fare carrier they usually drop their fares below a break even load factor. Typically lower fare carriers can offer lower fares because they have lower costs, where as a mjor carrier may and usually does have higher costs. Thus it is considered 'predatory' for a major carrier to compete on the same route at the same fares, because it is nearly impossible for them to make a profit let alone break even.

Not quite. See, by your definition a company could only match prices to breakeven. You're forgetting that a larger mainline carrier can offer the same price (even below breakeven), provided they're still offsetting that loss with higher-yield fares in other inventory buckets on the same flight.

It's called a loss-leader, and many businesses offer them.

True predatory practices involve not only dropping fares, but also dumping capacity on the competitor as well, to where even the LCC can't break even.

For example, not even the LCCs offer their lowest fare on evey seat. If a competing major offered every single seat for the lowest fare (below breakeven), then that's predatory.

That's also why prosecuting true predatory behavior is so hard...because it's very difficult to gauge it.

Nevertheless, my initial comment was a tongue-in-cheek jab at the LCC apologists who think WN entering a market with 10 nonstops a day with discount fares is good business, while a major matching them is predatory.

You can't have it both ways.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineCapt078 From United States of America, joined Jul 2003, 421 posts, RR: 1
Reply 18, posted (10 years 2 months 3 weeks 1 day 14 hours ago) and read 2312 times:

EA CO AS: i teach economics in boston, so perhaps i can lend a little here. to back up what APAOps5 said, yes, united implemented predatory pricing to aid in driving frontier out of boston. the greatest transgressor among the legacy carriers is american, who (just) recently contributed to the demise of legend, midway, and vanguard, but has a much darker history.

essentially, legacy (read: high cost carriers) subsidize unprofitable routes with the excess revenues (read: unit profits) from profitable routes. this is done legally to a certain extent, namely on routes that would not otherwise have service. throughout the nation, there are many communities whose sole and limited air service is provided for by federal, state, and local subsidy, in addition to the ability of the legacy carrier network to subsidize the costs of the flight with more efficient (read: profitable) routes. this is a marked difference from low-cost carriers, who operate on routes conducive to their low-cost structures. this is evident by the fact that there is virtually no low-cost service to any small community in this country. alas, on high-demand routes, prior to the pressence of a low-cost carrier, legacy carriers are capable of charging inflated fares (particularly to those most demanding service: last minute business travelers). however, when a new low-cost entrant offers service at reduced fares, the legacy carrier has three options: abandon the market, charge fares in line with their unit costs (significantly higher than the lcc), or match fares. the first two choices have obvious consequences, neither of which the legacy carrier will allow. therefore, the legacy carrier temporarily reduces its fares to compete with the new lcc. understandably, passengers flock to the legacy carrier with whom most have established frequent flyer accounts, and with whom they can travel further. all is well and good for the flying public, that is until the weaker low-cost carrier is driven out of the market. soon thereafter, the legacy carrier re-instates the original higher airfare, often even raising prices further to offset the depressed income during the period the lcc flew that market. consequently, the public (consumers) face artificial pricing that only harms them. this is predatory and more-importantly, anti-competitive, which if can be proven, is illegal.

so the real question is what is the legacy carrier to do? the answer is what we are seeing now; legacy carriers are being forced to drastically reduce their unit costs (costs per available seat mile), by lowering labor costs (the 2nd greatest cost facing an airline), increasing operational efficiency (higher utilization, greater capacity), et al. theoretically, competition from the low-cost carrier should drive the legacy carrier to become more efficient (thus lowering consumer prices), or replace the legacy (high-cost) carrier with low-cost service. either way, consumers as an aggregate appreciate lower prices when traveling, an incontrovertible goal of economics.


User currently offlineAPAOps5 From United States of America, joined Dec 2003, 98 posts, RR: 0
Reply 19, posted (10 years 2 months 3 weeks 1 day 14 hours ago) and read 2300 times:

EA CO AS:

Excellent rebuttal!  Smile You are right, and I agree, I guess I missed your initial jab. Sorry, if I sounded elementary.


User currently offlineCapt078 From United States of America, joined Jul 2003, 421 posts, RR: 1
Reply 20, posted (10 years 2 months 3 weeks 1 day 13 hours ago) and read 2285 times:

EA AS CO: your point about dumping capacity is certainly appropriate, though not necessarily requisite for there to be predatory action. the definitive action, is the return to higher fares after driving out the smaller airline. nevertheless, with the exception of one or two examples (the last of which was american at midway, who merely replaced mainline service with increased regional jet frequencies, without a marked increase in capacity).

User currently offlineCapt078 From United States of America, joined Jul 2003, 421 posts, RR: 1
Reply 21, posted (10 years 2 months 3 weeks 1 day 13 hours ago) and read 2277 times:

sorry, wasn't paying attention. i meant to say "nevertheless, with the exception of one or two examples (the last of which was american [and] midway, who merely replaced mainline service with increased regional jet frequencies, without a marked increase in capacity)", capacity increases (dumping) are an all-to-common characteristic of predatory action.

again sorry, i never learned to not watch the television while typing.


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