Frontier Vs SWA for Cancun Route

[ASADFW7]

There is a difference from market or predatory pricing and collusion. One is market driven, one is illegal.

 

[fam62c]

There is a difference from market or predatory pricing and collusion. One is market driven, one is illegal.

SW hasn't had a money losing year for a very long time so it makes it difficult to argue that they are pricing their product below cost. If Frontier doesn't make it it won't be SW's fault. Frontier is a small airline among giants in a highly competitive hub in a high fuel cost environment. The company went bankrupt once because it wasn't viable, I don't see it as being much better off now. Republic made a mistake buying it, they paid way too much. Frontier is very similiar to Midwest; a small airline with a good product and reputation but a bad business plan in a highly competitive world. It's going to end the same way at some point. This is a brutile business that has left a trail of casualties in it's wake and continues to do so.

 

[Captain Morgan]

SW hasn't had a money losing year for a very long time so it makes it difficult to argue that they are pricing their product below cost. If Frontier doesn't make it it won't be SW's fault. Frontier is a small airline among giants in a highly competitive hub in a high fuel cost environment. The company went bankrupt once because it wasn't viable, I don't see it as being much better off now. Republic made a mistake buying it, they paid way too much. Frontier is very similiar to Midwest; a small airline with a good product and reputation but a bad business plan in a highly competitive world. It's going to end the same way at some point. This is a brutile business that has left a trail of casualties in it's wake and continues to do so.

I agree with everything except the fact that the 700 plane gorilla wants to rid the world of Frontier and they are using their size as a weapon by absorbing costs in other places to run competition out of the way.

 

[Wesb737fo]

which large airline doesn't do that?

 

[fam62c]

I agree with everything except the fact that the 700 plane gorilla wants to rid the world of Frontier and they are using their size as a weapon by absorbing costs in other places to run competition out of the way.

I would also bet that Frontier is losing money and therefore, by definition, is pricing their product below cost. Is that not predatory? If Frontier had the capability of charging enough for their tickets to make a decent profit margin Republic wouldn't be trying to get rid of it.

I don't want to see anyone lose their jobs, I've been there and it's not fun. Having said that, some companies are not going to make it; that's just the way it is. If fuel prices stay this high the Frontier situation will have to resolve itself one way or another in the near future. In the case of SW they tried to buy Frontier and got outbid so they are going to try to eliminate Frontier through competition, that's business. I hope that Frontier gets bought by a company that will integrate the operation in a way that provides job security for the employees but one way or another Republic needs to divest Frontier or Republic will fail.