The Motley Fool thinks ticket prices might be going up for flights to and from
Denver International Airport.
Excerpt:
Indigo -- Frontier's new owner -- is planning to convert it to an "ultra-low-cost carrier," or ULCC, model similar to the one it introduced for its last U.S. airline investment:
Spirit Airlines (NASDAQ:
SAVE). The defining feature of ULCCs is that they offer low base fares to stimulate demand and then charge extra for everything else.
So far, Frontier has begun the transition to an ultra-low-cost carrier model while maintaining a hub-and-spoke route structure based in Denver. However, the hub-and-spoke structure doesn't fit well with the ULCC model, because it costs more to route passengers on connecting flights than on a nonstop. (For this reason, Spirit focuses its growth on city-pairs with plenty of local traffic.)
As a result, while Frontier will continue to be based in Denver, it's very likely that the carrier will scale back its Denver flight schedule. Some of the markets it serves from Denver don't have many local passengers, and so Frontier would probably be better off shifting that capacity to markets with plenty of nonstop traffic.
Read the rest
here.
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