This web app uses cookies to compile statistic information of our users visits. By continuing to browse the site you are agreeing to our use of cookies. If you wish you may change your preference or read about cookies

close

Why Frontier Airlines's Business Model is so successful?

Get all the answers

Embed code:

x
Copy the code below and embed it in yours to show this business model canvas in your website.

Frontier Airlines’s Company Overview


Frontier Airlines, headquartered in Denver, Colorado, is a prominent U.S. ultra-low-cost carrier dedicated to providing affordable, reliable air travel. Operating as a subsidiary of Indigo Partners, LLC, Frontier Airlines services a comprehensive network of over 100 destinations across the United States, Mexico, Canada, Puerto Rico, and the Dominican Republic. With a mission to make air travel accessible to everyone, Frontier Airlines focuses on delivering value to its customers through competitive pricing, a young fleet, and an emphasis on operational efficiency. The airline's commitment to sustainability is evident in its efforts to minimize its environmental footprint by operating one of the most fuel-efficient fleets in the industry.

Frontier Airlines operates on a unique ultra-low-cost carrier business model that prioritizes cost savings and flexibility for passengers. By offering a no-frills base fare, the airline allows customers to customize their travel experience through a range of optional services including seat selection, checked and carry-on baggage, and in-flight amenities. This à la carte approach not only keeps the base fare low but also provides passengers with the freedom to pay only for the services they need. Frontier Airlines strongly emphasizes direct bookings through its user-friendly website, https://www.flyfrontier.com, to reduce third-party distribution costs and enhance customer engagement.

The revenue model of Frontier Airlines is strategically designed to optimize earnings while maintaining affordability for travelers. In addition to revenue from ticket sales, the airline generates significant income through ancillary fees for optional services such as baggage handling, seat assignments, and expedited boarding. Frontier also leverages partnerships with travel-related service providers and cobranded credit card programs to diversify its revenue streams. This multi-faceted approach allows Frontier Airlines to offer some of the lowest fares in the industry while ensuring financial sustainability and growth. By balancing low base fares with a robust menu of ancillary services, Frontier Airlines effectively meets the diverse needs of its customer base while maintaining a strong competitive position in the airline industry.

https://www.flyfrontier.com

Headquater: Denver, Colorado, US

Foundations date: 1994

Company Type: Subsidiary

Sector: Transportation

Category: Airlines

Digital Maturity: Beginner


Frontier Airlines’s Related Competitors



Frontier Airlines’s Business Model Canvas


Frontier Airlines’s Key Partners
  • Aircraft Manufacturers
  • Aviation Fuel Suppliers
  • Airport Authorities
  • Maintenance and Repair Organizations
  • Travel Agencies
  • Online Booking Platforms
  • Government Aviation Authorities
  • Catering Services
  • Advertising Partners
  • Technology Service Providers
Frontier Airlines’s Key Activities
  • Flight operations
  • Customer service
  • Aircraft maintenance
  • Route planning
  • Ticket sales and reservations
  • In-flight services
  • Safety and compliance
  • Marketing and promotions
  • Strategic partnerships
  • Fuel management
  • Crew training and management
  • Baggage handling
  • Technology and IT support
Frontier Airlines’s Key Resources
  • Fleet of Airbus Aircraft
  • Experienced Pilots and Crew
  • Strategic Partnerships with Airports
  • Strong IT and Reservations System
  • Maintenance Facilities
  • Customer Service Infrastructure
  • Marketing and Sales Team
  • Regulatory Licenses and Certifications
  • Fuel Contracts
  • Loyalty Programs and Customer Data
  • Financial Resources and Investors
Frontier Airlines’s Value Propositions
  • Low-cost air travel
  • Frequent flyer program
  • Eco-friendly initiatives
  • Family-oriented services
  • Customer-centric support
  • Seasonal deals and sales
  • No-frills travel options
  • Transparent pricing
  • Extensive route network
  • Reliable on-time performance
Frontier Airlines’s Customer Relationships
  • Online Booking Platform
  • Customer Support Hotline
  • Email Communication
  • Social Media Engagement
  • Mobile App Notifications
  • Loyalty Program (Discount Den, FRONTIER Miles)
  • Travel Assistance Services
  • Customer Feedback and Surveys
  • Personalized Offers and Promotions
  • Real-time Flight Tracking Alerts
Frontier Airlines’s Customer Segments
  • Leisure travelers
  • Budget-conscious travelers
  • Families
  • Students
  • Small business owners
  • Adventure travelers
  • Domestic travelers
  • First-time flyers
  • Frequent flyers looking for lower fares
  • Group travelers
Frontier Airlines’s Channels
  • Website
  • Mobile App
  • Social Media
  • Email Marketing
  • Customer Service Phone
  • Travel Agencies
  • Airport Ticket Counters
Frontier Airlines’s Cost Structure
  • Aircraft leasing
  • Fuel expenses
  • Crew salaries and benefits
  • Maintenance and repairs
  • Airport fees
  • Technology and IT infrastructure
  • Sales and marketing
  • In-flight services
  • Ground services and handling
  • Insurance
  • Training and recruitment
Frontier Airlines’s Revenue Streams
  • Ticket Sales
  • Ancillary Fees (Luggage Fees, Seat Selection Fees)
  • Onboard Purchases (Food and Beverage Sales)
  • Loyalty Program Revenue
  • Charter Service Revenue

Vizologi

A generative AI business strategy tool to create business plans in 1 minute

FREE 7 days trial ‐ Get started in seconds

Try it free

Frontier Airlines’s Revenue Model


Frontier Airlines makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Direct selling
  • eCommerce
  • Bundling
  • Membership club
  • Discount club
  • Credits
  • Add-on
  • Low cost
  • No frills
  • Customer loyalty
  • Dynamic pricing
  • Advertising
  • Cash machine
  • Reseller
Analytics


Market Overview
  • Patterns
  • Sectors
  • Categories
  • Companies
  • Right click on the nodes to explore

Frontier Airlines’s Case Study


Frontier Airlines's CASE STUDY


As a team of business strategy enthusiasts with a knack for dissecting successful enterprises, we have always been fascinated by the lean, efficient business model of Frontier Airlines. Not many companies manage to pull off the ultra-low-cost carrier (ULCC) philosophy with finesse, while also keeping an eye on sustainability. This case study explores what makes Frontier Airlines not just a price leader but a trailblazer in the commercial aviation sector.

Evolution and Mission


Frontier Airlines was founded in 1994, establishing its headquarters in Denver, Colorado. As an ultra-low-cost carrier, Frontier’s mission is to make air travel accessible to everyone. This mission is deeply embedded in its operational model, prioritizing cost-saving and flexibility for passengers. The company operates over 100 destinations across the U.S., Mexico, Canada, Puerto Rico, and Dominican Republic, all while leveraging a young, fuel-efficient fleet to keep costs and environmental impacts low.
As a subsidiary of Indigo Partners, LLC, Frontier Airlines doesn't just aim for affordable travel; the company has a broader objective of making air travel reliable and straightforward, ensuring that its passengers only pay for what they use.

The Low-Cost Advantage


The beauty of Frontier Airlines lies in its ultra-low-cost carrier business model. Unlike traditional full-service carriers, Frontier offers a no-frills base fare. This approach provides passengers with unmatched value by allowing them to customize their travel experience. Extra services such as seat selection, baggage, and in-flight amenities are optional, therefore passengers only pay for what they need.
According to the annual report from Indigo Partners (2022), this à la carte model allows Frontier Airlines to keep its base fare 30 to 40 percent lower than traditional carriers, reflecting the value-first approach that draws millions of passengers each year.

Revenue Streams and Financial Strategy


Frontier Airlines boasts a robust and multi-faceted revenue model that is designed to optimize earnings while maintaining affordability for its customers. Here’s how it works:
Ticket Sales: While base fares are low, they constitute the largest slice of revenue. Ancillary Fees: Revenue from optional services like seat selection, checked and carry-on baggage, and expedited boarding. In 2022, ancillary fees contributed nearly 45 percent of the airline's total revenue (Source: Indigo Partners). Partnerships: Through alliances with travel-related service providers and cobranded credit card programs, Frontier diversifies its income streams. Charter Services: Companies and organizations often deploy charter services, adding another vertical to the revenue structure.
This comprehensive approach ensures Frontier remains one of the most budget-friendly options while also ensuring financial sustainability and growth.

Commitment to Sustainability


One pivotal aspect that sets Frontier apart is its strong emphasis on sustainability. Operating one of the youngest and most fuel-efficient fleets in the industry, Frontier makes conscious efforts to minimize its environmental footprint. By leveraging fuel-efficient Airbus aircraft, the airline manages to curtail carbon emissions substantially. According to the Air Transport Action Group, Frontier Airlines consumed 15 percent less fuel per passenger mile compared to the industry average in 2022.
Moreover, Frontier announced an initiative in 2022 to offset 100 percent of its carbon emissions by partnering with CarbonFund.org. These steps indicate Frontier's alignment with the global trend towards sustainability, which further enhances its brand value among eco-conscious travelers.

Customer-Centric Innovations


Customer loyalty is another cornerstone of Frontier Airlines' strategy. The airline maintains a strong relationship with its customers through several key touchpoints:
Discount Den and FRONTIER Miles: The loyalty programs cater to frequent flyers, offering exclusive deals and rewards. Direct Engagement: Frontier emphasizes direct bookings through its official website (https://www.flyfrontier.com) to reduce third-party distribution costs and enhance customer engagement. Tech-Enabled Communications: The airline uses their mobile app and social media platforms for real-time flight tracking alerts and personalized offers.
Frontier's commitment to customer satisfaction is also evidenced by its family-oriented policies, featuring affordable travel options specifically designed for family vacations. The "Kids Fly Free" initiative under the Discount Den club is a noteworthy example.

Operational Efficiency


At the heart of Frontier Airlines’ operations is an unyielding focus on efficiency. Through strategic alliances with key partners including aircraft manufacturers, maintenance organizations, and aviation fuel suppliers, Frontier ensures streamlined and cost-effective operations. The airline’s fleet management and route optimization initiatives are supported by state-of-the-art technology and a data-driven approach.
Pilot testimonies often emphasize Frontier's rigorous training programs, which contribute to the airline's commendable safety and compliance records. Moreover, continuous feedback loops with customers through surveys and the dedicated support team help mitigate operational bottlenecks.

Resilience and Future Prospects


No case study would be complete without acknowledging the resilience exhibited by Frontier Airlines. The global aviation industry has faced unprecedented challenges, most notably the COVID-19 pandemic. Yet Frontier demonstrated remarkable agility in adapting to the crisis. With a robust liquidity position bolstered by flexible operational structures, the airline managed to navigate through the turbulent times, reaffirming its status as a leader in the ULCC category.
Frontier Airlines has laid out a promising future roadmap focusing on expanded route networks, higher fleet efficiency, and intensified sustainability efforts. This case study underscores the importance of aligning business strategies with core values – affordability, reliability, and sustainability – to carve out a unique competitive edge in a saturated market.
In conclusion, Frontier Airlines stands as a prime example of how strategic cost management, customer-focused added value, and unwavering commitment to sustainability can drive both operational success and customer satisfaction. By empowering passengers to only pay for what they need, Frontier continues to revolutionize the aviation industry, making air travel increasingly accessible to a broader audience.


If you enjoyed this content, you’re in for a treat! Dive into our extensive repository of business model examples, where we’ve dissected and analyzed thousands of business strategies from top tech companies and innovative startups. Don’t miss out!

+100 Business Book Summaries

We've distilled the wisdom of influential business books for you.

Zero to One by Peter Thiel.
The Infinite Game by Simon Sinek.
Blue Ocean Strategy by W. Chan.