Citing rising operating costs at the airport, Frontier Airlines will cut flights and jobs in Denver, said CEO Dave Siegel in a letter to employees.
Siegel said, “Operating costs have risen faster [at Denver’s airport] than any other major U.S. airport over the past decade. As an example, Colorado property taxes have doubled in the last two years, and airport landing fees are up by 30% over the past three years. The cumulative effect of these increasing costs is that connecting traffic is no longer profitable for our airline.”
The airline needs to “right size our operation” before signing a new airport lease in 2016, Siegel said. He didn’t say how many flights and jobs would be eliminated.
The CEO said he hopes that “staffing reductions can be absorbed through retirements and natural attrition.”
Frontier switched to an ultra-low-cost business model in May, simplifying its fare structure and completely unbundling economy fares, charging extra for carry-on bags and advanced seat assignment. Siegel said that the transformation to an ultra-low-cost model continues.
“We must reduce our costs further, diversify our revenue streams and decrease our exposure to high-cost, low revenue connecting passengers — all of which is driving the reallocation of aircraft to new markets,” Siegel said.
Frontier is third in passenger traffic in Denver, behind United and Southwest.