Frontier plan could boost Colo. Springs airline activity

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Frontier Airlines is changing its flying strategy, and Colorado Springs’ business community stands to be a winner in its new plan.

The airline company has dubbed Colorado Springs a “focus city” with plans of non-stop flights, larger more efficient aircraft and lower ticket prices.

“Take all that into account and what does that mean?” asked Mark Earle, Colorado Springs Airport aviation director. “These flights are more efficient for the business traveler.”

Just two months ago Frontier Airlines announced four non-stop flights out of Colorado Springs to Phoenix, Los Angeles, Portland and Seattle to begin in May. It’s good news for the small Colorado Springs Airport, which like small airports across the country lost flights in recent years.

But, the move also represents a new business model that could shake up the competition and drive ticket prices down across the board, Earle said.

“There will be a competitive response from other carriers,” he said. “It will put downward pressure on fares for the other carriers to those destinations.”

Colorado Springs is among Frontier Airline’s first “focus cities” — a term they coined to represent their new focus on local markets, said Daniel Shurz, Frontier senior vice president, commercial. The airline has a hub in Denver and since 2008 has had a healthy schedule of flights from Colorado Springs to Denver and back to get passengers to connecting flights.

But now, after careful study of the market, Frontier believes there could be a significant number of flights from point to point — from Colorado Springs to Los Angeles, Phoenix, Seattle or Portland. And, Colorado Springs Airport is far enough away from Denver to make it work, Shurz said.

“These new routes are beneficial from a leisure perspective, no question,” Shurz said. “But, they are beneficial to the business community — it gives more straight forward access. It’s an easier way in and out.”

Part of the Frontier plan is to fly its bigger airplanes in and out of Colorado Springs. Typically, the smaller aircraft flies from smaller airports to the larger hub airports. But those aircraft are less efficient to operate and fuel costs more per passenger, which usually means higher ticket prices.

Frontier plans to fly its 138-seat Airbus A319 out of Colorado Springs and they are lowering ticket prices so they can fill the plane. Prices will be comparable to tickets flying out of Denver, Shurz said. And, on three of the four non-stop routes in and out of Colorado Springs, there is no direct competition, he said.

“If this is doing well, in the next few months, we may make announcements about further developments,” Shurz said.

Frontier is looking into adding non-stop flights from Colorado Springs to Washington, D.C., he said.

“They clearly see the potential in this market,” said Dave Csintyan, interim CEO of the Greater Colorado Springs Chamber of Commerce and Economic Development Corp. “I think they see this as an underserved market.”

Shift in the winds

In the past five years, there has been a structural shift in how the airlines do business. They used to blanket the field, trying to put service everywhere they could or they would choose a location just because their competition was there, Earle said.

But, after the fuel crisis of 2008 and then a recession on its heels, airlines scaled back their service. Small and medium size airports were hit the hardest. Medium airports lost 18 percent capacity and smaller airports lost 10 to 15 percent capacity.

“With that double squeeze, the (airlines) made huge decisions to cut capacity nationwide,” Earle said. “Nearly 20 percent of capacity in the entire system was cut — that’s seats cut out of the market and it was primarily older, less efficient airplanes which are primarily the smaller regional jet.”

Colorado Springs fared better than other small airports, losing about 12 percent capacity since 2009.

“We weren’t quite as hit as everyone else because of the large military presence and part of it was a very aggressive air service development effort,” Earle said.

Now, the economy is starting to turn, Earle said. And, Colorado Springs Airport is hearing from some carriers that they are willing to discuss adding more flights.

“The problem is there is only so much capacity,” Earle said. “The (airlines) have learned they need to keep volume down.”

And that makes the pitch for new carriers or added flights even tougher, he said.

Typically, there is a lot of back story and years of market research that go into an airline’s decision about flights, Earle said. Both airports and airlines are constantly crunching demographic numbers and trying to figure out where businesses are expanding to determine demand.

“Airports try to learn as much as they can about how (airlines) operate, learn as much as you can about the business model, how they make decisions, what they are looking for,” Earle said.

All the talks with airlines are very hush-hush and no one knows until the airlines are ready to make an announcement.

“They consider it to be proprietary. They are worried about their competition looking at what they are thinking about doing,” Earle said. “And, they are very concerned about creating expectations — they don’t’ want to disappoint the community.”

Earle’s team began pitching the idea of non-stop flights out of Colorado Springs to Frontier years ago, when they first entered the Colorado Springs market. Many things are in play, including the economic development and future growth plans for the city.

“Two months ago they contacted us and said, OK, it makes sense,” he said.

Already, Frontier has had strong bookings on the new flights, Shurz said.

“We’re impressed with the direct bookings in Colorado Springs and we are very excited about it,” he said.

For Colorado Springs hotels, the non-stop flights to and from four major cities levels the playing field when they are competing head-to-head against other cities for group meetings and conferences, Csintyan said. It simplifies the logistics for the meeting planners.

The additional access to and from Colorado Springs is key in the Economic Development Corps. efforts to recruit and retain business, Csintyan said.

“It’s clearly going to be an upside for the EDC team that is out there talking to and trying to attract business,” he said.

With the addition of Frontier’s four nonstop destinations, Colorado Springs Airport projects a 10 percent increasing in passengers for this year. Once the airline has a full year of those flights, the projections are 15 percent increase in passengers over 2011.

“We are very excited about that,” Earle said.