Frontier Airlines

            
 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BSTR441 For delivery in electronic format: Rs.400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

Competitive Strategy/ Strategic Management
Case Length : 18 Pages
Period : 2005-2006
Pub Date : 2013
Teaching Note : Available
Organization : Frontier Airlines
Industry : Aviation
Countries : US

Abstract:

After serving over 87 million customers for 40 years, the old Frontier Airlines stopped operating in 1986. The old Frontier Airlines had once dominated the Denver hub until it started having financial troubles as a result of the increased competition in the deregulated aviation industry. In July of 1994, however, a group of old Frontier executives brought Frontier Airlines, Inc. (“Frontier”), a Colorado corporation, back to Denver International Airport ("DIA"). In 2006, the new Frontier was the second largest jet service carrier at DIA based on departures. Beginning with two leased Boeing 737-200 jets, Frontier now operated forty-six jets.

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Initially serving small, under-serviced cities, the new Frontier grew steadily and flew to many of the popular destinations generally dominated by large airlines, such as Los Angeles, Chicago, New York, and Washington D.C. In addition, Frontier started offering international flights to Canada and many resort towns in Mexico. Due to the demand for Frontier's product, the company also started Frontier JetExpress, a code sharing partnership focused on providing low-cost regional flights.

Frontier's overall strategy was to "provide air service at affordable fares to high volume markets from [its] DIA hub and limited point-to-point routes outside of [its] DIA hub." Targeting price-sensitive passengers in both the leisure and corporate travel markets, Frontier attempted to execute this strategy in several different ways. First, Frontier tried to stimulate demand by offering a combination of low fares, customer-oriented service, and rewards for its frequent flyers. In addition, it expanded its Denver operations by adding additional high volume markets to its current route system, using larger planes on popular routes to maximize economies of scale, and code sharing with a regional airline. However, in 2006, Frontier faced a new direct competitor, Southwest Airlines, on its home turf. With mounting losses and scarce resources, Frontier's Board of Directors had to decide on the strategic options available to them. The case provides students the opportunity to decide which of those options was the best one for Frontier.

Issues:

Identify Frontier Airline's competitive strategy.
Conduct an Industry analysis; identify industry key success factors, and develop a SWOT analysis for Frontier Airlines, assuming it has a low-cost, conservative growth strategy focused on providing quality customer service.
Assess the company's financial health.
Evaluate potential strategic directions and recommend the most feasible alternative for the company.

Contents:

  Page No.
Introduction 1
The Airline Industry 1
The History of Frontier Airlines 3
Frontier: A Whole Different Animal 6
Culture and People: The Spirit of the West 10
Frontier's Financials 11
The Future and Strategis Decisions 13
Exhibits 14

Keywords:

Competitive strategy; Industry analysis; Industry key success factors; SWOT; Low-cost; Growth strategy; Resource-based-view analysis; Core competencies; VRIO framework; Strategic directions

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