Frontier Airlines Faces Tough Competition - Essay Example

Frontier Airlines faces tough competition in a crowded market. The airline has thus faced several challenges.

            First, it has been difficult finding and training an adequate number of staff, especially pilots and technicians. Tin general, there is a shortage of qualified staff and the turnover of employees is quite high. Secondly, the airline has had its business disrupted as a result of labor strikes by employees. Most of the workers are represented by unions, and therefore cases of labor strikes are common. Thirdly, there has been an increase in labor costs in the United States. Given that labor costs make up a significant percentage of the total operating costs, the airline has been pressured to increase salaries and benefits for the workers. This has in turn increased the operating costs significantly. Forth, the airline relies on a single manufacturer for all of the regional jets. One of the major risks is the inability of the manufacturer to provide the required parts and services in good time. Finally, since the airline is affected by the common stock, the price of this stock may fluctuate as a result of the actions of other partners, competitors, or the economy in general.

            In addition to the above internal challenges, there are external factors associated with the airline industry in general. First, the airline faces competition from other regional airlines operated by major airlines. In addition, some of these airlines offer low fare prices, making it difficult for the airline to attract higher passenger numbers without reducing fare prices. Secondly, the airline industry has generally been affected by several labor strikes. Therefore, the new collective bargaining agreements entered into by different carriers generally help to increase industry wages which in turn affects the airline. Thirdly, the recent economic problems experienced in the United States and around the world have impacted the airline’s operations. There has been a general reduction in passenger numbers. Furthermore, airline operations are also affected by weather changes, especially during times of ice, fog, and very low temperatures. As a result, the airline is sometimes forced to cancel flights due to unfavorable weather conditions. Forth, since the airline industry is heavily regulated, the airline has to meet extra costs in ensuring that it complies with the existing regulations. For instance, the FAA has rules relating to pilot rest times, aircraft inspection, and replacement of aircraft parts among other things. This increases operational costs. Finally, if passengers perceive regional airlines to be unsafe, then this affects the operations of the airline. This occurs mainly when one of the regional aircraft in the United States is involved in an accident, such as the Colgan Flight 3407 in 2009. After the accident, a reduction in passenger numbers was witnessed. Read More