enilria From Canada, joined Feb 2008, 6627 posts, RR: 13 Posted (4 months 3 weeks 5 days 17 hours ago) and read 3222 times:
Didn't see any other threads, oddly...
"Our process to sell Frontier continues and I am very pleased that we were able to reach tentative labor agreements with both our Flight Dispatchers and Flight Attendants, which remain subject to membership ratification. I am thankful for the continued professionalism and dedication of my 10,000 co-workers on behalf of our passengers."
Frontier's operating profit was down to $13.7 m from $14.1 a year earlier, despite a $22.6m decline in fuel cost. Operating margin was only about 4% which is by far the worst operating margin I've seen reported. WN's which was considered lackluster was over double that. I'd wager VX will report an operating margin in that same vicinity. Pretty disappointing...
point2point From United States of America, joined Mar 2010, 2330 posts, RR: 1 Reply 2, posted (4 months 3 weeks 5 days 17 hours ago) and read 3092 times:
Quoting enilria (Thread starter): Frontier's operating profit was down to $13.7 m from $14.1 a year earlier, despite a $22.6m decline in fuel cost. Operating margin was only about 4% which is by far the worst operating margin I've seen reported.
Is it that maybe after all of these years..... the Southwest Effect at DEN has finally sunk in and is now showing and taking its toll on F9?
n7371f From United States of America, joined Jul 2008, 1588 posts, RR: 12 Reply 4, posted (4 months 3 weeks 5 days 15 hours ago) and read 2793 times:
Quoting usflyguy (Reply 1): Quoting enilria (Thread starter):
Operating margin was only about 4% which is by far the worst operating margin I've seen reported. WN's which was considered lackluster was over double that.
Considered lackluster by whom, a fellow poster? and DL's operating margin was virtually the same as WN, but it's ok.
Good point since the original poster generally sees F9 in nothing but a negative light. But...same person makes a very valid point. That was my reaction when I saw the numbers too. Certainly the smaller scale of operations does have an effect on the profitability. However the glaring reduction in oil prices and similar year-to-year profit does raise flags certainly. If oil prices were the same as 2012, you'd have a nasty loss.
I've lost a lot of enthusiasm for what is going on at Tower Road. This throw a dart at a map operation seems incredibly disjointed and rudderless.
I always go back in my mind to Sean Menke's view that he wanted all of Frontier's assets in Denver when times were the toughest because he and the management team felt that was their best chance of survival...and it worked. Would it have the same result today? Don't know...Southwest certainly is much bigger. And if anyone is still in denial that Southwest poured it on in DEN to eliminate F9, really?
I've just always felt with my medium knowledge of the industry and the people I talk to that Frontier's best chances remain as a Denver airline - not some Allegiant spin off hoping to strike gold.
Quoting FRNT787 (Reply 3): ASMs were down by 10%. Lower profit on lower seats makes sense. Granted, there is still much work to be done, but that's what management has been saying all along.
Quoting n7371f (Reply 4): Good point since the original poster generally sees F9 in nothing but a negative light. But...same person makes a very valid point. That was my reaction when I saw the numbers too. Certainly the smaller scale of operations does have an effect on the profitability. However the glaring reduction in oil prices and similar year-to-year profit does raise flags certainly. If oil prices were the same as 2012, you'd have a nasty loss.
Well, to be fair, F9 did lose money. They reported an Operating Profit only. If you look at Republic's overall results the combined company has an Operating Profit of $70.3m on revenue of $664 million. Overall operating margin was 10.6%. Net Margin was just $24.6m/$664 million=3.7%. So normal "below the line" expenses like taxes and interest expense reduced operating margin about 7 points to get to Net Profit margin which is much more important than Operating Margin (which is the equivalent of you not paying the interest on your mortgage/car or any income tax).
So, if you adjust F9's +4% margin by reducing it by those same 7 points of interest and tax expense, F9 had an estimated net margin of -3%. This should come as no shock because if the company was profitable it would be sold by now.
point2point From United States of America, joined Mar 2010, 2330 posts, RR: 1 Reply 10, posted (4 months 3 weeks 4 days 11 hours ago) and read 1690 times:
Quoting mariner (Reply 9): I don't think the Southwest Effect has "finally" sunk in - I think it became obvious some years ago.
Well.... it did take WN a few years at DEN to finally get to be the dominant carrier on many major routes ex-DEN. And now that WN is there, and UA having the resources to do at DEN what F9 cannot, what can F9 do but to stay out of the way as much as it can with these two humongous gorillas controlling turf at DEN? Now, I do believe that DEN can be a 3-hub airport, but now that F9 is not playing 'hub at DEN' anymore it seems, what can F9 do except go after routes with grants (and some will work, some won't), go into ex-DEN routes where there is no WN or UA, work with Apple Vacations for guarantee vacation flights, go into some other airports with little or no service (COS, TNN, ILG) where some may work or some won't...... and after all of this, F9 is still stuck being a DEN-centric airline for the time being?
The fact that F9 is showing any sort of plus $$$$$ has to be remarkable considering what it is up against. And as long as it can be $$$$ plus, it can do what needs to be done to survive, and hopefully grow in some sort of organic fashion to find again how it can be the niche airline at DEN.
I think that it's common knowledge that F9 has been shrinking....... so why is it such a puzzle when they don't pull in as in income?
illinoisman From United States of America, joined Feb 2012, 140 posts, RR: 0 Reply 12, posted (4 months 3 weeks 4 days 2 hours ago) and read 1504 times:
Quoting mariner (Reply 11): My only puzzle is the negativity that the airline seems to attract, especially on a.net.
It isn't the airline it used to be? No - that airline lost money regularly.
I am really disgruntled dealing with F9. It used to be "fun" to do business with them but now, if you can not do your business on the web, there are excessive hold times. I was on hold a few days ago for 20 minutes and then the call was disconnected. The staff also does not appear to be trained very well, as they used to. Why doesn't F9 have the call back system like WN? There's a reason WN is doing better than F9, even with the cattle call boarding process. Its sad to see a once great customer focused airline go.
mariner From New Zealand, joined Nov 2001, 23969 posts, RR: 86 Reply 13, posted (4 months 3 weeks 3 days 23 hours ago) and read 1455 times:
Quoting illinoisman (Reply 12): I am really disgruntled dealing with F9. It used to be "fun" to do business with them but now, if you can not do your business on the web, there are excessive hold times. I was on hold a few days ago for 20 minutes and then the call was disconnected.
But you keep saying you will never fly Frontier again, so why do you continue to do so?
GentFromAlaska From United States of America, joined Feb 2005, 2691 posts, RR: 1 Reply 14, posted (4 months 3 weeks 3 days 21 hours ago) and read 1347 times:
Quoting point2point (Reply 8): And why would it be, do you think, that F9 has to resort to these? F9 for the most part wasn't that way when it only had UA to deal with at DEN.....
If I may borrow the a phrase from the Night before Christmas children's story "Visions of Sugar Cookies Danced in their Heads" I think F9 decided it wanted in on the G4 model of servicing micro markets; no other large jet carrier would even have thought about ten years ago, using regional jets or otherwise.
At the time the G4 model intrigued a lot of people including myself. In the present day the model is too crowded for four carriers. I think F9 used the opportunity to test the waters hence the hybrid carrier you see today, an LCC in the west and a ULCC in the east. ULCC in aviation has not yet been defined. The term is better better known in the maritime industry as Ultra Large Crude Carrier. In my mind its hard to be something that isn't something.
There are a few exceptions (Juneau being one) I think F9 needs to find those markets with a minimal of 100,000 population with an anchor, be it business or military. In a perfect world it would be a town with no other scheduled service. It has to be a 60/40mix of leisure and business. SHD was set up to fail from the beginning as it had neither. COU failed because it had no anchor. A facility of higher education is not an anchor, a bonus yes. A relative who lives in south central Missouri thinks COU (Columbia) was initiated to catch traffic into the Ozarks region.
Unfortunately the here today gone in nine months has caused a ripple effect which I don't think F9 planned on. They should have saw it. The flying public including myself is asking themselves will the airline be here when their flight arrives. Vacation plans are put in motion a year in advance if not longer. A fare refund is not the answer. It creates animosity.
[Edited 2013-07-27 14:54:22]
Man can be taken from Alaska. Alaska can never be taken from the man.
point2point From United States of America, joined Mar 2010, 2330 posts, RR: 1 Reply 15, posted (4 months 3 weeks 3 days 20 hours ago) and read 1323 times:
Quoting mariner (Reply 11): I don't think it is "stuck" at DEN. I think it wants to be there. And given that (according to Shurz today) 90% of the business is at DEN, I understand why.
In that sense, yes, 90% of its business is DEN, because Denver and the Front Range is where F9 has its brand loyalty. I would think that anyone in the area with any sense of the area would want to see a local business do well, and patronize it to the extent one can to make sure it does well. Is there anywhere else in the U.S. that F9 could just pick up from DEN and go to, and expect the same results that it does outside of DEN? I would think not, although with some prodding F9 seems to be getting what it can out of TTN, and soon hopefully ILG. But still, how much of a percentage are those two going to be contributing to F9s bottom line in the near and even intermediate future? Maybe up to 5-10 percentage points if all goes extremely well?
So it's been noted here I think many times before, that DEN is where F9 is going to live..... or die....... Yet, it still seems that there is room and pax for 3 major hubbers at DEN. Unfortunately, the playing field in terms of resources is not there for F9 against UA, WN, and all of the others that service DEN. F9 really only has brand loyalty......and how much can brand loyalty contribute in terms of overall plus $$$$ for F9 here?
Quoting GentFromAlaska (Reply 14): I think F9 needs to find those markets with a minimal of 100,000 population with an anchor, be it business or military. In a perfect world it would be a town with no other scheduled service. It has to be a 60/40mix of leisure and business.
What you describe seems already to be taken...... looking at a map of the U.S. mainland. Maybe TTN and ILG will show themselves as gems.... but these are in secondary regions of major airports. And this may be a way for F9 to go, but yet they couldn't make COS, AZA, and PVU work in the longer term. So what is out there that is left, something like STC or LEX?
In the meantime, there does seem to be a few markets with lack of DEN nonstop, such as BUF and RIC right offhand, where the O&D pax traffic would well support at least a daily mainline flight, year round. Then there's a few more that could be done probably seasonably, such as PVD, PBI, and SYR. Here are 5 markets that pretty easily could work to/from DEN that F9 could be considering.......
mariner From New Zealand, joined Nov 2001, 23969 posts, RR: 86 Reply 16, posted (4 months 3 weeks 3 days 19 hours ago) and read 1260 times:
Quoting point2point (Reply 15): Yet, it still seems that there is room and pax for 3 major hubbers at DEN.
But not - I suggest - if all the three airlines are all just flying from DEN to the same places. The latest example would be DEN-ABQ. Yes, Frontier can get okay loads with junk fares, but why bother? Put that aircraft where it can actually make money.
Frontier has two issues still to address, and the first of those is DEN in winter.
It is a very long time since Frontier had a profitable Q1 (or even just break-even) and the disappointment of this new Frontier - to me - is that they didn't do better this past Q1.
Yes the ski season helps, but it doesn't help enough, and Siegel knows the answer - that Frontier doesn't do enough north/south (snowbird) flying, just as Sean Menke did when he said "there has to be more to Frontier than DEN.
I can't argue with that. The original basis of Allegiant's success was snowbird stuff (LAS and Florida), and Spirit at FLL.
But it isn't just to Florida - it is deep winter to Florida, not mild winter to Florida. GSO-MCO did okay, but only okay, whereas (summer) GSO-DEN seems to have been gangbusters.
TTN is a move to address this, and ILG, but I don't see the point of trying to keep ILG-IAH going through deep winter. I'd make it seasonal, or drop it, and switch that aircraft to Florida, or ILG to the Caribbean - STT or SJU or even NAS.
The other issue is costs - which are still too high. Moves have been made to address this, but some of them cost money in the first instance (the removal of aircraft from the fleet early, e.g.) and the airline needs to get to the point where those cost cuts have kicked in. I look forward to the day when DirectTV goes - it is (a) old technology, expensive and heavy and (b) a money losing proposition, as the provision of fresh food was.
I can hear rhe howls of outrage if DirectTV does go, of course - but good luck with DirectTV on Spirit or Allegiant. Bring on Wifi, I say.
Your not to far off. A lot the car making that was in Detroit has relocated to Tennessee, Alabama and Georgia and the businesses who follow them tires, spare parts etc. Japan seems to likes Tennessee too. I like CHA and coastal Georgia or an area 50-75 miles miles from a medium or large airport. CHA although well served by regional jets fits neatly. CHA with a 172,000 population gives you leisure/tourism, (the Smokies) and biz with the new VW manufacturing facility. CHA roughly splits the distance between ATL and BNA in half.
New Hampshire/Maine should also be on the F9 route map, at least seasonally. The planner in me would start looking mid continent at the larger cities not already served along the proposed Keystone oil pipeline route. In the oil arena
I think a less than daily non-stop flight connecting oil center at YYC and the oil center at Dallas would flow. AA and West Jet appear to be the only two carriers who offer non-stop service between the two cities.
Quoting mariner (Reply 16): I can hear rhe howls of outrage if DirectTV does go, of course
I agree. Thus far I like what I've heard about the WN deal with DISH. If I subscribe to DISH on the ground should able to access my account in the air using the DISH Hopper service.
Man can be taken from Alaska. Alaska can never be taken from the man.
RyanairGuru From Australia, joined Oct 2006, 4091 posts, RR: 2 Reply 18, posted (4 months 3 weeks 3 days 10 hours ago) and read 1033 times:
Quoting mariner (Reply 16): it is deep winter to Florida, not mild winter to Florida. GSO-MCO did okay, but only okay, whereas (summer) GSO-DEN seems to have been gangbusters
When I live in Greensboro the winters definitely seemed "deep" enough for me Central Carolina can be stuck down in the 30s for days. Sure it's not North East conditions, but cold enough to want to escape from!
A big problem that F9 had on GSO-MCO, IMHO, is that they underestimated the extent to which G6 is entrenched in the market. Sure, MCO is definitely more convenient than SFB, but I found that there was generally broad awareness in Greensboro that G6 was a cheap way to Florida. In comparison, F9's marketing was pretty non-existent. I saw one, not particularly eye catching, billboard.
DEN is a totally different story as it is GSO's only flight west of DFW. It was therefore tapping into the sort of under-served market that F9 can flourish on. Maybe MCO might work better this winter with F9 now have a larger name in the Triad? Time will tell...
I personally feel that GSO could be an interesting market for F9. Sure, it's not ILG or TTN as it is [relatively] well served by all four majors. As has been mentioned over and over on here, however, Piedmont Triad is one of the largest metropolitan area in the country without WN service. That could represent an opening for F9 to pull of another TTN-style operation. The market isn't as "virgin" as TTN or ILG, but I think that DEN shows that the market is larger than ATL and CLT! Or maybe I'm dreaming
mariner From New Zealand, joined Nov 2001, 23969 posts, RR: 86 Reply 20, posted (4 months 3 weeks 3 days 10 hours ago) and read 1022 times:
Quoting RyanairGuru (Reply 18): When I live in Greensboro the winters definitely seemed "deep" enough for me Central Carolina can be stuck down in the 30s for days. Sure it's not North East conditions, but cold enough to want to escape from!
I'm with you on that. It never quite gets to freezing at my house, but every winter I'm off to somewhere warm - I've just come back, a couple of weeks too soon maybe. I don't do cold.
But 30 degrees is mild compared with the north-east and none of Frontier's MCO routes from the "mild" winter places - GSO, COU and SHD - were gangbusters, with or without Allegiant.
I don't know if GSO-MCO will come back but I hope so because I think you're right - I think that it might do better now that Frontier is so much better known at GSO and may even have built up a few FF's there.
As to GSO generally, I like the idea of it, too, in part because of RDU. I am quite surprised at how well TTN-RDU is doing - a tad over-scheduled at 6 x weekly, but really good at 5 x weekly. I'd like to see TTN-GSO - shades of Eastwind.
mariner From New Zealand, joined Nov 2001, 23969 posts, RR: 86 Reply 22, posted (4 months 3 weeks 3 days 9 hours ago) and read 992 times:
Quoting F9animal (Reply 21): I was a strong supporter of Lynx. The Q400 had tons of potential. WN could not touch markets like ASE. Lynx was starting to mature, and I still bang my fists to this day since it was shutdown.
Many of us were strong supporters of Lynx and if it had been making money it would still be with us.
The problem was that 11 aircraft was not enough for a fleet. There were not good opportunities to expand the flying for Frontier. Republic searched for CPA partners to add Q400 flying to make the fleet larger and worthwhile. Nobody was interested at the time. Had United needed a Q400 partner 2-3 years earlier, it may have been a different story.
Of course it doesn't matter now. The Q400 does not fit with the new brand strategy anyway.
"We have a right to fail, because failure makes us grow" --Glenn Beck
PlanesNTrains From United States of America, joined Feb 2005, 5065 posts, RR: 29 Reply 24, posted (4 months 3 weeks 2 days 23 hours ago) and read 774 times:
Quoting FRNT787 (Reply 23): Had United needed a Q400 partner 2-3 years earlier, it may have been a different story.
That might have been a great outcome, though I don't know the details of the contracts involved and whether doing both F9 and UA flying out of DEN would have passed muster. Regardless, it could have really changed the equation.
I love the QX Q400 fleet's effectiveness for them. Too bad it didn't magically work out for Frontier as well.