President and CEO of Frontier Airlines, Barry Biffle attends The Way forward for All the pieces presented by the Wall Street Journal at Spring Studios on May 17, 2022, in Recent York City.
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Frontier Airlines CEO Barry Biffle fired back at his counterpart at United Airlines who said the deep-discount model within the U.S. is dead.
“That is cute,” Biffle said Wednesday on the Skift Global Forum, a travel conference in Recent York. “If he’s good at math he would understand that we have now a [flight] oversupply issue in the USA.”
Biffle’s comments were a response to United CEO Scott Kirby, who said last week at an airline conference in Long Beach, California, that he thought the most important U.S. discounter, Spirit Airlines, would exit of business. Spirit in August entered its second bankruptcy in lower than a yr after failing to seek out sturdy financial footing.
When Kirby was asked why he thought Spirit would shut down, he responded, “Because I’m good at math.”
Kirby added that if Biffle wants Frontier to be the most important of the U.S. discount carriers, then he’ll be the “last man standing on a sinking ship.”
Biffle pointed to his airline’s lower unit costs — 7.50 cents per available seat mile, excluding fuel, compared with far-larger United’s 12.36 cents per available seat mile within the second quarter — and said the budget carrier caters to customers who may not be flying in any respect, in addition to those that want an affordable flight but are splurging on other things when traveling, like luxury hotels.
When asked Wednesday about whether Frontier relies on extra capability left on the table by United, Biffle replied, “That is just like the CEO of Nordstrom saying ‘I allow customers to purchase jeans from Walmart.'”
Each Frontier and United, together with other airlines like JetBlue Airways, have announced that they are adding latest flights on major Spirit routes to win over its customers because it struggles.
Ultra-low-cost airlines have struggled from a jump in costs after the pandemic, an oversupply of domestic U.S. flights which have pushed down fares, and competition from larger airlines that supply each no-frills basic economy tickets and global networks to burn frequent flyer models on.
“Customers care about value, and so they do not get value on a [ultra-low-cost carrier],” Kirby told CNBC on Tuesday.
Those budget airlines long relied on rock-bottom fares and charges for every thing else from seat assignments to cabin baggage, a model large network airlines have copied with their basic economy tickets. Now, Spirit, Frontier and others wish to offer more upscale offerings and bundles that include things they used to charge for.
Frontier swung to a $70 million net loss within the second quarter but forecast unit revenue growth within the mid-to-high single digits within the third, and to “provide a solid foundation for profitability in 2026.”
Correction: This story has been updated to correct the airline unit costs.
