Frontier Airlines: Evaluating Industry Attractiveness with Porter's

This case study provides a Porter's Five Forces analysis of the passenger airline industry, specifically focusing on Frontier Airlines' return to operations. It evaluates the bargaining power of suppliers and customers, the threat of substitute goods and new entrants, and competitive rivalry. The analysis concludes that the industry is attractive for Frontier Airlines due to factors like low threat of new entrants and government support, despite challenges such as the high bargaining power of suppliers. The study emphasizes the importance of customer service and strategic innovation for Frontier's success in a competitive market, suggesting that a low-fare approach with a strong commitment to customer service is the best strategy for the company.

Frontier Airlines

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Is the industry attractive for Frontier or not?..............................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
Airline industry refers to the organisations that are offering air transport services to the
customers whereas on the other hand the aviation industry includes all set of aviation related
businesses. Airline industry is one of the sector that is included in the wider aviation industry
(Tahanisaz, 2020). Further this industry provides services of travelling passengers along with the
transportation of freight. In this report, Porter’s five force analysis of airline industry is done so
that the attractiveness of airlines can be analysed. Frontier Airlines is an American low cost
carrier service that is headquartered in Denver, Colorado. They are further coming back into the
operations and that is why the overall airlines industry is further analysed and evaluated.
Main Body
Undertake Porter’s Five Forces analysis of the passenger airline industry.
Porter’s five forces analysis is a business analysis model that evaluates the five forces
which impact the structure of the company and the industry. This model was proposed by Michel
E Porter in order to analyse the strengths and weakness of the industry and how the organisations
can take advantage of these strengths and weakness in order to enhance efficiency and
profitability. This model is effective as it helps the company in ensuring that if the organisation
should enter in the industry or not. Maximum number of forces in the industry being in the
support of the organisation ensures that the company will have good growth prospects in the
industry. Further the Porter’s five forces analysis is done on the airline industry in order to
understand the matrix of the industry, so that Frontier Airlines can make a rigid decision:
Power of Suppliers- One of the major factor of any industry is their suppliers, they play a
major role in the profitability and sustainability of the business in the industry (Jalalian, Gholami
and Ramezanian, 2019). The power of suppliers refers to the ability of the suppliers to bring a
change in the prices of the services and the type of services that they are currently providing in
the industry. Airlines industry is a high cost sector due to which there are limited number of
suppliers in the industry. A limited number of suppliers in the industry shows that they hold high
power of influencing the price and services in the industry. Therefore, the bargaining power of
suppliers in the airline industry is high as airlines have limited number of options and the other
supplier follows the strategy of pricing and services. This is a major concern in the airline
industry as the suppliers holding high power can change the working of the business in the

industry. The switching power of company from one supplier to another supplier is low as there
are less options in the industry and the company often rely on single supplier for their raw
products as the quality and type of product might vary from one supplier to another.
Threat of substitute goods- Substitute goods are those goods which are used in place of
each other. Hence, customers are price sensitive which means in case they found any other
airline services in lower prices than they will switch to that airlines (Khudhair and et. al., 2019)
(Bockelie, 2019). In context of Frontier airlines, they are having a unique logo and they must try
to modify their services on regular basis so that their competitors will not copy their effective
services easily. Secondly, promoting about their airlines and their services will further help them
to attract more customers. They can promote their airline services by mentioning the benefits of
using their services and comparing it with their substitute airlines. Here, they must focus on
mentioning the benefit of their airlines over their competitors. Hence, this will influence their
customers that they are having better services over their competitors. Hence, customers will use
their services more than others. On the other hand, it is also essential for them to keep the prices
of their airline tickets lower as much as possible to gain more customers. Their are various kinds
of airlines in UK which can try to copy their services for increasing effectiveness for their airline
company. Therefore, there is a high risk of substitute goods. Hence, by modifying the services on
regular basis will help the company to save them self from this treat.
Competitive rivalry among industry- This element of porter five forces will describe
the condition of competitors within the industry for a specific company and different ways to
reduce the negative impact of competitors and help the company to gain competitive advantage
(Oyewole, 2020). In context of Frontier’s airlines, they are having many competitors like
Western Pacific, United Airlines and many others. These airlines are having strong brand image
ad a strong customer base which which means their customers are loyal and attracted toward
these airline services more. It is essential for Frontier's airlines to analyse the market well and
analyse the strategies of their competitors and make their strategies in such a way which will
help them to encounter their competitors strategy and help them to gain competitive advantage.
They are suggested to analyse customers needs and wants related to airline services and try to
fulfil them by their services. Asking feedback from customers on regular basis will also help the
company to analyse where they are lacking behind to fulfil their needs and wants. In case of
negative feedback they must modify the specific service which are having more negative

feedback from customers. Hence, the threat of competitive rivalry is high for Frontier's Airlines.
On the other hand, they are also suggested to keep the prices of their tickets as low as possible to
attract more customers. They are also recommended to focus on their brand image and promote
their airline industries more by sharing their positive reviews from customers.
Bargaining power of customers
This is the component of Porter's five forces that represents how customers could
influence the business profitability or functions of a company. In terms of the airlines industry,
the bargaining power of customers is low as they do not have have many options to travel and
does not posses authority to negotiate on the prices established by the companies (Azar, Schmalz
and Tecu, 2018). They are highly concern for their safety, convenience and seek for travelling
facility that could take them to their destination without any inconvenience. They seek for
exceptional services which they could access easily and while travelling can have wonderful
travelling experience. For instance, the Frontier Airlines mainly focus on providing quality
customer services and has invested in SabreSonic passenger solution system. Through this
system it is facilitating efficient process of reservation, check-in, wide scope of technology for
improving revenues and streamlining. In current times people focus on booking their flight
through internet which has increased the usage of digital services in airlines industry. For
instance, the respective company has started to use internet which facilitates users to book flight
online and this procedure saves the operational cost for the firm. The selected organisation is
able to save its costs by eliminating the commission of third party such as travel agents. It has
also been observed that people while travelling through a flight want to have some entertainment
source for which they need some television or other source. In order to fulfil this purpose, the
respective company has installed a seat-back television on each of its plane. This seat-back
television have 24 channels and to watch live streaming passengers could pay around $5. It could
be observed from this discussion that the bargaining power of customers is low in case of
Frontier Airlines. as the company is providing exceptional services to its potential passengers
Threat of new entrance
This factor of the model helps in determining how new entrance in a particular industrial
sector could influence the market position of the existing companies. In terms of airlines
industry, the threat of new entrance is low as it requires a huge capital investment to enter in this
industry (Tikani, Honarvar and Mehrjerdi, 2018). In order to enter this particular industrial sector

it is very essential for new entrance to have complete knowledge and expertise because the cost
is high to establish a new airline company. In case of the respective company, threat of new
entrance is also low as it is providing exceptional technological services along with seat-back
television facilities which is very hard for new entrance to provide.
Is the industry attractive for Frontier or not?
It is evaluated from the case study that Frontier Airlines is planning to resume its services
back in US after the 20 years of pause. For the effective coming back into the airline industry
company must review its industry deeply. Therefore, After the industry evaluation of the airline
industry using the porter's five force framework it is clear that for the frontier airlines the
industry is highly attractive (Wu, Cheng and Ai, 2018). From the key determinants of the porter's
five force model it is understood that the company has really low threat of new entrants that
make the industry suitable and easy for the frontier airlines to stay and gain competitiveness
through its low cost air fleets. As per the case study and passenger airline industry analysis for
the Frontier Airlines the customers are the key assets and for that company has different
customer service orientations to meet the bargaining power of customers in the industry making
them powerful among the customers and to gain profits and brand positioning with it. It is
evaluated from the suppliers bargaining power of the passenger airline industry that they contain
high power which makes difficult for the Frontier to gain profits after its re-coming into the
industry as the company already operates on low pricing strategy. The airline industry is highly
competitive but with the declining airline and airport prices the company gains a huge chances of
creating its own competition by serving their customers with high quality service and safety
standards. Also the us government has reduced the barriers of new entrants making it easy for
frontier airlines to regain its position in passenger airline industry of the US (Setiawan and et. al.,
2020). Thus, the passenger Airline industry is attractive and profitable for the Frontier airlines
and also company has began to implement its innovative change plans as a part of Frontier’s
business strategy. But, as the Bargaining power of suppliers is high for which Frontier still needs
a capital fund for the growth in the market. As company has also planned to acquire more new
sustainable aircraft. Also the for Frontier to differentiate in this industry among the different
competitors as the low fare airlines is the best options with strong commitment to customer
service. Thus, from the whole analysis of the company's operations, strategies and industry

analysis it is understood that for the Frontier Airlines coming back into the passenger Airline
industry of the US is the best option as the industry seems to be highly attractive for the brand.
Conclusion
It is concluded from the above report that for business to start a business in any industry a deep
analysis of the industry is very important. For the industry competitive analysis porter's five
force framework is the effective and systematic framework that allows the new ventures to gain
insight of each direction of the business. It is concluded from the above report that airline
industry is highly attractive for the new business comers as there is huge scope of this industry to
prosper and gain profit thorough internation flights and also there is huge support of government
for the same.

References
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