Deregulation of the US aviation market wasn't kind to the local service airlines. They faced being gobbled up by rampant former trunk airlines or kamikaze low fare competition from a host of new startups. Frontier Airlines was in a more difficult position than most and attempted to buttress itself with a low-cost offshoot of its own. Sadly, this only served to strain relations with its own employees and fell short of the hopes that it could stabilise the failing airline. Frontier Airlines had, like most of the other local service airlines, been a well run company that had outgrown the shackles of the CAB's initial feelings towards feeder airlines. By the early 70s it had turned itself into a proper 'regional airline' (in the 70s this term didn't equate to operating regional aircraft) operating pure jets on an expanding route network, nibbling at the heels of the trunk majors whilst trying to stay true to the roots of its local service mandate. Frontier was based at Denver but, under the regulated era's framework of rules, even though that airport was a base for both United Airlines and Continental Airlines it had been able to grow profitably. In 1978, it flew 32 737-200s, 27 Convair 580s and 3 DHC-6 Twin Otters, had 5,060 employees, made $16 million and had, in April, just introduced its new Saul Bass designed F logo and livery. Frontier actually welcomed deregulation, but it would quickly be the death of it. Below: The workhorse of the Frontier fleet was the 737-200. Initially, Frontier's success continued and 1981 proved the airline's most profitable year ever, with a $33 million windfall. However, the airline had lost its leader in 1980 - as Al Feldman jumped ship for rival Continental. Vice President Glen Ryland was promoted to President, but faced a set of factors that would have a strong negative impact on the airline. The rot would start to set in in 1982. The airline setup Frontier Holdings Inc as the new owner of the airline itself, but found that it's now subsidiary Frontier Airlines was increasingly competing head to head with both United and Continental, now free to do business as they saw fit. A fare war escalated and ate into profits at Frontier - cutting them in half for the year. The carrier attempted to grow its way back to profit with a fleet of new McDonnell Douglas MD-82s and cut First Class service to keep costs down. It also retired the last of the Convair 580s and continued to shed routes to the smaller destinations that had been its bread and butter in the 60s and 70s. Even with major wage concessions of 20% in renegotiated labour contracts with the unions, and increased revenues, high costs saw the airline fall into it's first loss in over a decade to the tune of $13.8 million. Things were falling apart fast and something needed to be done about it. The solution that was implemented proved to be controversial. The holding company decided to setup a sister airline, which was formed in August 1983. Why would they do that? Well, Frontier, as with many of the unionised legacy airlines, was despite the wage concessions, still staffed by a lot of relatively highly paid workers. It was felt that to compete costs needed to be cut further and by setting up the new carrier as a non-unionised one they could workaround the problem.
Above and below timetables from timetableimages.com
Not only were attempts to make inroads into United's marketshare unsuccessful but fare wars with Continental forced prices lower. Ultimately, the gamble of Horizon didn't pay off and the airline ceased operations after less than a year at the end of 1984. The 727s were wet-leased to Frontier to continue the routes for a short time, but the airline's assets, including the 727s, were sold in January 1985 to another startup airline that would become the equally unsuccessful Skybus, based in Atlanta. The failure of Frontier Horizon was another nail in the coffin of Frontier Airlines itself. They took over the Horizon routes but the carrier was on a one way path towards liquidation, despite layoffs and further wage concessions from the unions. If Frontier Horizon was a mis-step it illustrated the central issue Frontier had. High costs and strong competition from competitors with deep pockets. The solution would be to adopt low-cost airline practices and in 1994 Lund was instrumental in starting up the second Frontier Airlines that did just that. References
1996. Norwood, T. Deregulation Knockouts Round One. Airways Press 2002. Hill, R.C. The First Frontier. Airliners Issue 73
2 Comments
8/6/2024 09:00:34 pm
Thanks for this stunning summary of Frontier's final years! Frontier Discovery is a fascinating name! Does Eurowings still have some planes branded as Eurowings Discovery? I had not connected that both United and Frontier had liveries designated by Saul Bass. They are similar designs with three color stripes and a logo in the negative playing off the stripes. Was Continental's livery from the same era also designed by Saul Bass? It is somewhere between Frontier and United in design, had three stripes, and a circular logo in the negative. What other airline liveries did Saul Bass design? I am thinking about the excellent post on this forum about all the liveries designed by Walter Landor. How about Saul Bass?
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AuthorI'm Richard Stretton: a fan of classic airliners and airlines who enjoys exploring their history through my collection of die-cast airliners. If you enjoy the site please donate whatever you can to help keep it running: Archives
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