WELL, MARIA: WELCOME BACK.
FRONTIER AIRLINES TERMINATING A
FIVE MONTH PURSUIT WITH MERGER
OF SPIRIT AIRLINES THIS WEEK AS
SPIRIT GOT TOGETHER WITH JETBLUE
AND STRUCK A $3.8 BILLION DEAL
TO MERGE INSTEAD.
SPIRIT TOUTING THE DEAL THAT
WOULD CREATE THE FIFTH LARGEST
AIRLINE IN THE COUNTRY.
JOINING ME RIGHT NOW IN A FOX
BUSINESS EXCLUSIVE IS THE CEO OF
FRONTIER AIRLINES BARRY BIFFLE.
THANK YOU FOR BEING HERE THIS
WEEKEND.
WE SO APPRECIATE IT.
WHAT WENT WRONG?
WAS THIS SOUTH CAROLINA PRICE OR
SOMETHING ELSE?
WHY WOULD THIS NOT GO YOUR WAY?
>> THANKS FOR HAVING US ON,
MARIA.
THE REASON WHY IT DIDN’T GO OUR
WAY IN THE END OBVIOUSLY THE
SPIRIT SHAREHOLDERS VOTED TO GO
WITH THE JETBLUE OPTION AND IT
WAS KIND OF A CHOICE OF KIND OF
CASH VERSUS THE ABILITY TO
PARTICIPATE IN THE UPSIDE OF THE
TRAVEL RECOVERY AND THEY CHOSE
THE CASH TODAY, BUT
UNFORTUNATELY THAT CASH WON’T BE
PAID TILL THEY CONSUMMATE A
DEAL.
I THINK THAT IT’S DISAPPOINTING
FOR SPIRIT SHAREHOLDERS IN THE
LONG RUN BUT TODAY MAYBE THEY
DON’T FEEL THAT WAY BUT IT’S
DEFINITELY A LOSS FOR CONSUMERS
BECAUSE THEY’RE GOING TO PAY
MORE MONEY WHEN THE COSTS GO UP
AT SPIRIT AND THEY’LL HAVE TO
PAY A LOT MORE FOR IT.
MARIA: AND YOU BELIEVE THAT
CUSTOMERS ARE GOING TO BE PAYING
A LOT MORE FOR THE PRICE OF A
TICKET IF IN FACT THIS DEAL
BETWEEN JETBLUE AND SPIRIT GOES
THROUGH.
WHY WILL WE SEE INFLATION -- THE
PRICE OF AIRLINE TICKET IS
ALREADY UP ALMOST 40% YEAR
OVERYEAR.
YOU THINK IT’LL GO EVEN HIGHER?
>> WELL, LOOK, THE PRICE OF
TICKETS ARE UP FOR A VARIETY OF
REASONS, BUT MAINLY FROM THE
PRICE OF FUEL.
WITH FUEL PRICES WHERE THEY ARE,
AIRLINES HAVE TO PASS THAT
STRAIGHT ONTO THE CONSUMER AND
SO THAT’S A BIG DRIVER.
THERE’S ALSO OTHER INFLATIONARY
THINGS HITTING THE INDUSTRY, BUT
THE BIG THING THAT’S HAPPENED IS
STRUCTURALLY YOU HAVE
SIGNIFICANTLY LOWER CAPACITY
THAN YOU HAD IN 2019 SO YOU
WOULD HAVE EXPECTED BY NOW WITH
GDP GROWTH, SIGNIFICANTLY MORE
CAPACITY AND YOU HAVE
CONSTRAINED CAPACITY LEADING TO
MORE PRICING POWER FOR THE
AIRLINES OVERALL AND SO THAT’S
WHY FARES ARE UP AND PROBABLY
GOING TO STAY UP TILL YOU SEE A
RELAXATION OF FUEL PRICES AND
THAT’S WHY FRONTIER IS SO
IMPORTANT TO CONSUMERS AND WE’RE
DISAPPOINTED THAT THE DEAL FELL
BUT JP MORGAN SAID WE WERE
HANDED KEYS TO THE LOW COST
KINGDOM AND 95% OF CAPACITY IN
THE UNIT WILL HAVE COSTS 40-90%
HIGHER THAN FRONTIER.
IF YOU’RE A CONSUMER AND YOU
WANT LOW PRICES, YOU’LL BE
COMING TO FRONTIER AND IF YOU’RE
AN INVESTOR, YOU’LL BE LOOKING
FOR GROWTH WITH SOMEONE LIKE US
BECAUSE WE’RE THE ONLY ONE WITH
A CLEAR PATH TO GROWTH.
WE HAVE NO REAL NATURAL
COMPETITOR OF ANY SIZE AND SCALE
ONCE THAT DEAL GOES THROUGH.
MARIA: SO WHAT WILL YOU DO IN
TERMS OF GETTING THAT SCALE YOU
WERE LOOKING FOR HAD YOU GONE
WITH SPIRIT?
I MEAN, ARE YOU LOOKING FOR
ANOTHER DEAL?
>> NO, SO RIGHT NOW WE’RE
FOCUSED ON ORGANIC GROWTH AND WE
ARE SET UP IN 2023 TO GROW 30%
OVER 2022.
WE HAVE THE ABILITY OVER THE
NEXT FOUR TO FIVE YEARS TO
DOUBLE OUR SIZE WITH OUR FLEET
GROWTH AND WE’LL TRIPLE OUR SIZE
IN THE NEXT EIGHT YEARS SO WE
HAVE A LOT OF ORGANIC GROWTH AND
WE LOOK TO TAKE ADVANTAGE OF THE
OPPORTUNITIES I MENTIONED WHERE
AGAIN, 95% OF THE CAPACITY IN
THE U.S. IS GOING TO COST 40%
HIGHER THAN OURS.
CONSUMERS SHOULD WANT US TO GROW
SO THEY CAN HAVE MORE AFFORDABLE
AIR TRAVEL.
MARIA: I’M GLAD YOU MENTIONED
CONSUMERS AND MORE AFFORDABLE
AIR TRAVEL BECAUSE WITH THE
GROWTH YOU’RE TALKING ABOUT AND
EVEN THE PRICE OF A TICKET
HAVING GONE UP SO MUCH,
CONSUMERS ARE NOT GETTING MUCH
FOR IT.
I MEAN THERE’S BEEN
CANCELLATIONS, PILOT SHORTAGES.
WHAT’S THE PROBLEM WITH ALL OF
THIS MESSINESS AT THE AIRPORT
LATELY?
>> WELL, THERE’S A LOT OF
DIFFERENT FACTORS.
I MEAN, EARLIER IN THE YEAR WE
HAD SIGNIFICANT AIR TRAFFIC
CONTROL DISRUPTION THAT ACTUALLY
HIT US AS WELL.
I MEAN, IT WAS PROBABLY OUR
SINGLE LARGEST CHALLENGE BACK IN
THE SPRING.
A LOT OF THAT HAS SUBSIDED AND
THE FAA HAS DONE A GOOD JOB OF
ACTUALLY MARSHALING THE
RESOURCES THEY NEEDED.
MANY OF THE RECENT CHALLENGES --
I MEAN, THEY HAVEN’T AFFECTED
FRONTIER.
WE WERE 99% COMPLETION OVER THE
FOURTH OF JULY HOLIDAY AND WE’VE
HAD OUR BEST OPERATIONS IN JULY
IN OUR HISTORY SO WE’RE NOT IN
THAT, BUT I KNOW THAT SOME
AIRLINES ARE HAVING STILL SOME
STAFFING CHALLENGES THAT ARE
IMPACKING THEM AND I THINK THEY
MAY HAVE OVERSCHEDULED RELATIVE
TO WHAT THEY’RE CAPABILITIES
WERE FROM A STAFFING PERSPECTIVE
AND APPEARS IT’S FINALLY GETTING
UNDER CONTROL FOR MOST OF THE
AIRLINES BUT LIKE I SAID, IF
YOU’RE LOOKING FOR AFFORDABLE
AND RELIABLE TRAVEL, IT’S
PROBABLY TIME TO COME TO
FRONTIER.
MARIA: WELL, LOOK, THE SENATE
WANTS YOU AND YOUR COLLEAGUES IN
THE INDUSTRY SHORT TERM
ORIENTATION PAY FOR IT.
THEY’RE -- TO PAY FOR IT AND
READY TO PUT FINES ON THE
INDUSTRY FOR ALL OF THE
CANCELLATIONS.
ARE YOU EXPECTING TO PAY A FINE?
>> I WOULD HOPE NOT.
I THINK AS WE UNDERSTAND THE
ISSUES AND LOOK AT IT, I MEAN
THERE MAY BE SOME THAT CLEARLY
OVERSCHEDULED AND KNEW THEY
OVERSCHEDULED.
I THINK THAT MAYBE THEY NEED TO
LOOK INTO THAT.
IF WE WANT TO GET DOWN TO IT AND
FINE EVERYBODY INVOLVED, THERE’S
A LOT OF PEOPLE INVOLVED.
THERE’S AIRPORTS THAT HAVE A
RESPONDENT HERE IN HOW THEY
MANAGE THEIR DATES, THERE’S AIR
TRAFFIC CONTROL COMPONENTS,
AIRLINE STAFFING COMPONENTS SO I
THINK IF YOU WANT TO TARDIVE I S
DIVVYING UP FINES, IT’LL GET
INTERESTING.
WHAT MIGHT BE MORE PRIVIC IS
HAVE A -- PRODUCT IS HAVE A
CONFERENCE ABOUT THE CHALLENGES
AND ISSUES.
THE PILOT SHORTAGE IS ONE THAT
CAN BE HELPED BY THE GOVERNMENT
AND WHAT ACTIONS THEY TAKE.
I THINK ONE -- OF THE THINGS WE
CAN DO IS HAVE A CONVERSATION
ABOUT HOW DO WE CREATE THE
SAFEST TRAINED PILOTS AND I’M
NOT SURE WE HAVE THE RIGHT SET
UP FOR THAT TODAY.
MARIA: WELL, IT’S A GREAT POINT
TO MAKE, BARRY.
THANKS VERY MUCH FOR MAKING IT.
WE’LL SEE IF SENATOR ELIZABETH
WARREN UNDERSTANDS THAT AND
WE’LL BE WATCHING AND THAT’S