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Anyone get a call from Frontier
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F9 Driver
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June 10, 2006
Saturday Interview With Jeff Potter
Staking Claim to the Skies Over Denver
By JEFF BAILEY
Since being named chief executive of Frontier Airlines in April 2002, Jeff Potter, 46, has more than doubled sales, to $994.3 million for the year that ended March 31, and established the company, a low-cost carrier, as an alternative to United Airlines on many routes from Denver.
Frontier's Denver market share is now approaching 20 percent. And United, which emerged from bankruptcy in February, has agreed to give Frontier six gates at Denver International Airport, signaling a potential further shift in share. Still, in January, a bigger giant slayer arrived in Denver: Southwest Airlines.
Mr. Potter spoke about airline competition. Following are excerpts:
Q. Since Southwest started Denver flights, some have suggested that Frontier is going to become roadkill for the bigger low-cost airline.
A. I think there is a perception that Southwest is — not necessarily unbeatable — but they've never been in this market. I don't think people realized that Frontier positioned itself to compete against anybody in this market. We have the utmost respect for what they do. January through March was tough, but we're making progress. It's kind of reinvigorated us.
Q. What immediately happened to fares on routes on which you now compete against Southwest?
A. A drop of 25 percent in some of the markets. There's been a pricing impact.
Q. More recently?
A. We're raising fares along with everyone else. An advertised $59 fare doesn't mean that everyone on the airplane is paying $59.
Q. With United giving up some Denver gates, will you enter new markets or increase the number of flights to existing destinations?
A. A combination. Calgary just started. We have some markets we need to get some additional capacity in. Denver-Phoenix. Denver-Vegas. Florida.
Q. Even as a smaller post-bankruptcy airline, United dominates Denver with more than 50 percent market share. What's the biggest threat United poses to Frontier?
A. Irrational behavior. It's not only United. In this business, you're only as smart as your dumbest competitor. But over the last three to four months, we see some good signs. Loads are strong, but I think the fares are still trailing where they need to be.
Q. You're in contract negotiations with your pilots, who are paid more than comparable United pilots but less than those at Southwest. What are you asking for in terms of wages and work rules that are significant to Frontier's performance?
A. I can't say. We're right in the middle of it. We have a relationship with our pilots that is very strong. They see what's happening in this industry. They want to see Frontier around for a long time.
Q. Flight attendants at Frontier are not represented by a union. Can that continue?
A. Well, they've tried four times in six years. Five years? It's not passed yet. There's always rumbling.
Q. Your stock is at about $6, roughly half its 52-week high. What gives?
A. The perception issues, that is, Southwest. Once we get back to profitability, showing people what we're all about. This is a business where we have to make money. We'll get back in the black in the June quarter. You could extrapolate that if you make money in June, you should make money in September.
Q. Will Frontier be profitable for all of fiscal 2007, ending March 31?
A. Tell me what are oil prices going to be. The fundamentals of the airline are running well. Everything's working. We're starting to see some revenue improvements.
Q. You run a $1 billion company in a very difficult industry and yet you make $295,000 in salary, have little value in your stock holdings and might not get a bonus because Frontier has not been consistently profitable. Would you recommend bright young businesspeople go into the airline industry?
A. Trust me, I'm living the dream. You know what, I think it's a great business. I found my passion, so I'm pretty happy. Once you get into it, it's hard to get out, in the sense that's it's so challenging. If your passion is to get rich and make a lot of money, this isn't your direction. But I would also tell you that you have the wrong passion.
Q. What is the hardest part of your job?
A. Going through challenging times, keeping everyone motivated. What sets us apart is our service.
Saturday Interview With Jeff Potter
Staking Claim to the Skies Over Denver
By JEFF BAILEY
Since being named chief executive of Frontier Airlines in April 2002, Jeff Potter, 46, has more than doubled sales, to $994.3 million for the year that ended March 31, and established the company, a low-cost carrier, as an alternative to United Airlines on many routes from Denver.
Frontier's Denver market share is now approaching 20 percent. And United, which emerged from bankruptcy in February, has agreed to give Frontier six gates at Denver International Airport, signaling a potential further shift in share. Still, in January, a bigger giant slayer arrived in Denver: Southwest Airlines.
Mr. Potter spoke about airline competition. Following are excerpts:
Q. Since Southwest started Denver flights, some have suggested that Frontier is going to become roadkill for the bigger low-cost airline.
A. I think there is a perception that Southwest is — not necessarily unbeatable — but they've never been in this market. I don't think people realized that Frontier positioned itself to compete against anybody in this market. We have the utmost respect for what they do. January through March was tough, but we're making progress. It's kind of reinvigorated us.
Q. What immediately happened to fares on routes on which you now compete against Southwest?
A. A drop of 25 percent in some of the markets. There's been a pricing impact.
Q. More recently?
A. We're raising fares along with everyone else. An advertised $59 fare doesn't mean that everyone on the airplane is paying $59.
Q. With United giving up some Denver gates, will you enter new markets or increase the number of flights to existing destinations?
A. A combination. Calgary just started. We have some markets we need to get some additional capacity in. Denver-Phoenix. Denver-Vegas. Florida.
Q. Even as a smaller post-bankruptcy airline, United dominates Denver with more than 50 percent market share. What's the biggest threat United poses to Frontier?
A. Irrational behavior. It's not only United. In this business, you're only as smart as your dumbest competitor. But over the last three to four months, we see some good signs. Loads are strong, but I think the fares are still trailing where they need to be.
Q. You're in contract negotiations with your pilots, who are paid more than comparable United pilots but less than those at Southwest. What are you asking for in terms of wages and work rules that are significant to Frontier's performance?
A. I can't say. We're right in the middle of it. We have a relationship with our pilots that is very strong. They see what's happening in this industry. They want to see Frontier around for a long time.
Q. Flight attendants at Frontier are not represented by a union. Can that continue?
A. Well, they've tried four times in six years. Five years? It's not passed yet. There's always rumbling.
Q. Your stock is at about $6, roughly half its 52-week high. What gives?
A. The perception issues, that is, Southwest. Once we get back to profitability, showing people what we're all about. This is a business where we have to make money. We'll get back in the black in the June quarter. You could extrapolate that if you make money in June, you should make money in September.
Q. Will Frontier be profitable for all of fiscal 2007, ending March 31?
A. Tell me what are oil prices going to be. The fundamentals of the airline are running well. Everything's working. We're starting to see some revenue improvements.
Q. You run a $1 billion company in a very difficult industry and yet you make $295,000 in salary, have little value in your stock holdings and might not get a bonus because Frontier has not been consistently profitable. Would you recommend bright young businesspeople go into the airline industry?
A. Trust me, I'm living the dream. You know what, I think it's a great business. I found my passion, so I'm pretty happy. Once you get into it, it's hard to get out, in the sense that's it's so challenging. If your passion is to get rich and make a lot of money, this isn't your direction. But I would also tell you that you have the wrong passion.
Q. What is the hardest part of your job?
A. Going through challenging times, keeping everyone motivated. What sets us apart is our service.
Shrek
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- Oct 25, 2005
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