Skift Take
Frontier will be hoping that the premium business fares give the airline a much needed revenue boost.
Key Points
- Frontier Airlines has introduced a new business fare called BizFare to attract business travelers.
- BizFare includes perks such as a free carry-on bag, a premium seat, priority boarding, and no change or cancellation fees.
- The move comes as Frontier struggles with a weakening market for ultra-low-cost carriers and competition from larger airlines.
Summary
Frontier Airlines has launched a new business fare called BizFare, aimed at attracting business travelers with perks like free carry-on bags, premium seats, priority boarding, and no change or cancellation fees. This initiative comes as the ultra-low-cost carrier faces softening demand and increased competition from larger airlines that are expanding their basic economy offerings. Frontier's move is part of a broader strategy to generate additional revenue and appeal to a new segment of travelers.
Frontier Airlines is courting a new class of travelers.
The ultra-low-cost-carrier announced Thursday that it is launching a business fare, as part of an effort to reach business travelers. It comes as the airline struggles with softening demand.
Frontier said the ticket, called “BizFare,” would allow companies to save on corporate travel expenses and would be available through a respective company’s global distribution channel.
The new option is an easy win for Frontier, as it allows the carrier to gain extra revenue while catering to a set of travelers that may not normally fly with an ultra-low-cost brand for business trips.
The new class deviates from Frontier’s bare bones business model. It includes a free carry-on bag, a premium seat, priority boarding, and no change of cancellation fees.
Typically, travelers flying with Frontier would have to pay extra for any ancillary perks beyond the basic ticket.
Members of Frontier’s loyalty program can also earn a minimum of 10x the miles for every qualifying dollar spent through the new product.
“For companies with a strong focus on keeping travel expenses down, our BizFare is going to be a great new option to integrate into their overall corporate travel mix,” Frontier CEO Barry Biffle said in a statement.
A Weak Market for Ultra-Low-Cost Carriers
Similar to its competitor, Spirit Airlines, Frontier has been struggling with losses due to weaker-than-expected sales and a lack of an appetite for domestic travel post-pandemic.
Biffle said international travel was “in vogue” but “isn’t going to last” during the carrier’s third-quarter earnings call in October.
Larger carriers like American, Delta and United have also tried to eat into ultra-low-cost carriers’ market share by expanding their basic economy offerings and capacity in leisure destinations in places like Florida, Mexico and the Caribbean.
These larger airlines are betting that customers will be willing to buy their basic economy products, while also paying for premium features.
American chief commercial officer Vasu Raja said in a call with analysts January 25 that the carrier noticed 10% of its revenue came from customers who purchased a basic economy seat and then bought a premium product.
United CEO Scott Kirby made a jab at Frontier during the airline’s third-quarter earnings call, referring to Frontier’s crack down on passengers that tried to take carry-on bags as personal items to avoid paying the extra fees.
“I mean charging people $99 at the gate and paying your employees a commission to take their purses away crossed the line,” Kirby said. “And so while they’ve gone in one direction, we’ve gone the other with an improved product.”
Frontier is set to report fourth-quarter earnings on February 6.
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