Frontier Airlines is known for its aggressive ancillary product pricing and cost-cutting measures such as doing away with phone support.
But in a clear nod to evolving consumer preferences, the carrier revised its merchandising strategy on May 17, largely doing away with the unbundled pricing model that it pushed further than any U.S. carrier and looking much more like a conventional U.S. airline.
Discount rival Spirit quickly responded by discontinuing its own cancellation and change fees while stating that more adjustments are in the offing.
Frontier CEO Barry Biffle, meanwhile, has begun talking like a changed man.
"What happened over the last 10 or 20 years is that ancillaries were a great idea and they saved consumers money with unbundling," Biffle said. "But we believe that the ancillaries got too high, and it caused a problem in that we could always be trusted for the lowest fare, but depending upon the options that you wanted, you didn't always get the lowest total price."
Frontier's new merchandising strategy
Under its new merchandising strategy, flyers can still purchase a bare-bones product, now called Basic, with upcharges for seat assignments, carry-on bags, changeability and more. But if a traveler plans to purchase any of the above options, they'll find it significantly less expensive to choose a rebranded bundled fare. Frontier's Economy bundle roughly aligns with the economy offerings of full-service carriers: Carry-on bags are included, and a standard seat can be selected at the time of booking. There are no change or cancel fees. Checked bags cost extra.
The Premier bundle includes the economy offerings plus early boarding and an extra-legroom seat, if available. The Business bundle includes two checked bags as well as the carrier's UpFront Plus product, featuring an extra-legroom aisle or window seat next to an open middle seat.
Costs for the Economy bundle begin at $30 more than the basic fare each way, Premium costs as little as another $20 on top of that, and Business begins at an additional $50.
Those options cost much less than what Frontier previously charged for its fare bundles, called The Works and The Perks. They are also much less expensive than existing ancillary charges for those who choose the Basic fare. Another key difference is that the bundles are offered at the beginning of the booking path instead of after the customer selects their flight, as was previously the case at Frontier.
Biffle said that the new bundles are designed to be easily comparable for consumers used to traditional U.S. airlines. And Frontier intends to continue to be a leader in low fares: It is offering 2,500 frequent flyer miles to any booked customer who finds a comparable flight for less on the same route and day as their own trip.
Adding up the ancillaries
The switch comes as Frontier searches to find its footing in a post-pandemic landscape that has sharply favored full-service global U.S. carriers, especially Delta and United. Frontier, meanwhile, recorded a small loss in 2023.
Biffle believes that by moving away from the a la carte model, Frontier will appeal to a wider range of flyers, including those whose luggage requirements would make an unbundled Frontier flight pricey. And although Frontier averaged $76.51 of ancillary revenue per passenger last year, Biffle said the purchase rate for the various ancillary options was less than 20%.
He expects that number to rise dramatically with the new merchandising strategy. "We're going to charge a lot less for all these products and services, but we expect to sell a whole lot more," he said.
Frontier also implemented service changes on May 17, bringing back phone agents for elite Frontier Miles program members and for other customers within 24 hours of a flight, ending a policy of offering customer service via chat only. The airline also extended the lifetime of flight credits from three months to a year.
Still, a Frontier flight experience won't mirror that of a full-service carrier. It will continue to charge fees for snacks and beverage service, and checked bag prices outside of the Business bundle remain much higher than at full-service airlines, while the standard checked bag weight allowance of 40 pounds is below the 50-pound industry standard. Frontier aircraft don't have WiFi, and its cabins are more densely configured than those of traditional U.S. carriers.
Airline industry analyst Brett Snyder, who writes the Cranky Flier blog, said that Frontier's new merchandising approach is likely to bring in additional customers.
"Making it easier to book should help fill seats," he said. Less clear, he said, is if it helps them make more money. "It depends a lot on how they end up pricing everything."
Snyder also said that Frontier will have to improve its reputation. Among other concerns, the carrier had the lowest on-time performance among the 10 largest U.S. airlines last year.
"They need to get operational integrity. They need to stop getting themselves in the news for whatever bad reason. Then they may change their reputation over time," he said.
What is Spirit doing?
Spirit, which is currently bleeding money, may be the next discount airline to overhaul its sales model. Executives said early this month that they are working on merchandising changes that will be geared toward attracting higher-end flyers. But with the exception of ending change and cancellations fees, the airline is keeping whatever plans it has close to the vest.
Snyder said it's noteworthy that Spirit, which until March had been distracted by its failed attempt to merge with JetBlue, has acted much slower than Frontier.
"Frontier is throwing everything at the wall," he said. "Spirit is just saying, 'Wait.'"