executives have disclosed that so far, customers have responded positively to the new premium offerings that the airline has been adding throughout 2024, which allowed the company to end 2024 with a net profit, its first since 2019.
Maturing quickly
During Frontier Airlines’ Q4 2024 earnings call on February 7, Barry Biffle, the chief executive officer (CEO) of the airline, said that as the company launched the UpFront Plus product, which is a European-style business class seat with a blocked middle seat, it sold over 70% of the seats offered to customers in Q4, “and that is within six months of launching it.”
“So we are pretty jazzed about our customers looking for a premium experience and we are not attracting, we are not stealing share or anything. [These are] just customers that were already onboard willing to pay for a better experience.”
Photo: Bradley Caslin | Shutterstock
Biffle added that the airline’s passengers are providing positive feedback about the upcoming first class seats. While the company is focusing on data, the data indicated that its customers have changed and they are willing to pay for a new product.
Frontier Airlines introduced the UpFront Plus seats in March as part of its ‘The New Frontier’ proposition. Flights with blocked middle seats at the front of the aircraft took off on April 10, 2024, and the airline invited customers to pay extra to block the middle seat.
“Premium seating is a key focus, providing customers with more choice while driving revenue growth. UpFront Plus, introduced last year, has performed very well, attracting customers willing to pay for added comfort.”
Related
ULCC Frontier Airlines Will Start Blocking Middle Seats In The First 2 Rows
Passengers can upgrade and enjoy more elbow room and personal space.
Changing demographics
The airline also remarked that its premium changes have also resulted in certain demographic changes within its customer base. According to Robert Schroeter, the chief commercial officer (CCO) of Frontier Airlines, some of the changes have created benefits for the carrier’s demographic composition.
“We have actually seen an increase on the business side in terms of the travelers there. Incomes have gone up.”
Schroeter added that the airline was excited about the changes being introduced and the customers to whom they have been providing premium options. The demographics are moving in the right direction, including the fact that they will be able to purchase and engage with those products.
Photo: Wirestock Creators | Shutterstock
The CCO revealed that now, its co-brand credit card revenue per passenger is only $3, compared to $30 at legacy and other no-frills airlines. As such, capturing a sliver of the competitors’ revenue represented a meaningful growth opportunity since Schroeter pointed out that the demographics of loyalty credit card applications have also shifted.
“Other carriers, one of the things that they have is a tremendous amount of folks who have status but are not able actually to capture value within that status, we are going to be able to provide value to folks like that.”
Frontier Airlines will roll out further premium offerings throughout 2025. In December 2024, the airline announced that as part of the next phase of ‘The New Frontier,’ throughout the year, it will introduce first class seats (late 2025), free seat upgrades for Elite Gold members (early 2025), unlimited free companion travel for Frontier Miles Platinum and Diamond Elite members (mid-2025), and the option to redeem miles for bundled booking options (mid-2025).
Frontier Airlines To Introduce First-Class Seating In 2025 As Part Of ‘Luxurious’ Transformation
The airline will install two rows of first class on its planes.
Snapping a four-year loss streak
The executives’ comments were made after the airline disclosed that it ended Q4 2024 and 2024 with a net profit of $54 million and $85 million, respectively. During the quarter, its revenues were $1 billion, while full-year revenues were $3.7 billion.
That was Frontier Airlines’ first annual profit since 2019, when the airline ended the year with a non-adjusted net profit of $251 million and a net income margin of 10%.
In 2024, Frontier Airlines carried 33.2 million passengers. Still, while the airline’s executives tried to play down its worsening load factors, with average load factors in 2024 dropping 4.6% to 76.8%, its Q4 2024 average revenue per passenger increased by 6% to $117.17.
Photo: Robin Guess | Shutterstock
According to Biffle, Frontier Airlines does not report booked load factors. Instead, the carrier publishes flown load factors, meaning that a couple of points must be added to “normalize” the number.
“But the biggest issue has been that we continue to see Tuesday, Wednesday, and Saturdays are just not in demand like they were pre-COVID, and that is why we have reshaped the capacity to that demand.”
As such, the CEO of Frontier Airlines said that was why load factors could improve in 2025, with the whole industry watching the switch from work-from-home/hybrid work to return-to-office (RTO) mandates that could benefit US-based carriers in 2026 and beyond.
Related
Turn Around Story: How Frontier Airlines Went From Loss To Profit In A Year
Frontier Airlines has snapped its four-year net loss streak in 2024.
