DENVER—Frontier Airlines Holding Inc. is whittling a nifty niche south of the border.
Since it started flying international routes, Frontier Airlines has expanded service to seven Mexican resorts with flights from 13 U.S. cities, including the newest additions of Milwaukee and Albuquerque, N.M. On Tuesday, it is announcing service to Puerto Vallarta from the California cities of Sacramento and San Jose.
Some flights will use 76-seat regional jets which offer a cost-savings and enable the airline to fly with more frequency, John Happ, Frontier’s senior vice president of marketing and planning, said Monday.
Frontier has adopted the Mexico expansion as part of a diversification strategy that also includes the regional jets, made available through a contract signed this year with Republican Airways Holdings Inc., and a turboprop operation starting this fall.
“Those are two key strategies that they’re working on to reinforce their position in what’s become a super-competitive environment at their Denver hub,” Calyon Securities analyst Ray Neidl said Monday. “The early signs are hopeful…it’s going to be a tough competitive environment.”
The Mexico expansion was hatched under the guidance of Chief Executive Officer Jeff Potter who is resigning next month to head up Exclusive Resorts, a privately held Denver-based luxury destination club.
Frontier introduced flights to Cancun and Matzalan at the end of 2002 to establish Mexico as a market from Denver, and it just began to grow, Happ said. The airline offered 92 weekly flights to Mexico by December 2006, which equaled 12.2 percent of its capacity, he said.
By this December, Frontier will offer 139 weekly flights to Mexico and Costa Rica from 13 U.S. cities, which will equal 19.2 percent of capacity. Cancun is the No. 1 destination, followed by Cabo San Lucas and Puerto Vallarta. Other Mexican cities are Acapulco, Cozumel, Guadalajara and Ixtapa/Zihuatanejo.
“We recognized that there was a great opportunity for us to operate from non-Denver cities as well as Denver-to-Mexico,” Happ said. “For the most part, all of the U.S. cities are integral and important cities in their own right within our domestic network.”
The airline does not publicly release revenue or costs associated with the Mexico routes, Happ said.
The addition of the Embraer E-170 jets gave Frontier the chance to increase the range of point-to-point service, Happ said.
“We believe that Mexico and Latin America are logical places for us to continue to consider growth, whether it is new gateway or new destinations or a combination of the two,” he said.
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