Frontier Strikes a Chord in Memphis

The airline industry may have changed radically in the past six years, but there has been no change in the first commandment: Thou Shalt Protect the Hub.

The commitment to principal played out this month in Memphis, Tenn., a hub for Northwest Airlines(NWACQ Quote).

On Feb. 14, Frontier Airlines(FRNT Quote), which has its hub in Denver, announced it would begin flights from Memphis to Denver, Las Vegas and Orlando, Fla., on May 12. The next day, AirTran Airways(AAI Quote) said it would begin service from Memphis to Orlando, one of its focus cities, on May 8.

Then, on Feb. 19, Northwest said it would begin service from Memphis to Denver, Las Vegas and Orlando -- plus add new service between Indianapolis and Denver. All flights would begin May 2. So Northwest retaliated, not only matching service from its hub but also invading Frontier's Denver hub.

"You can see what a screwy industry this is," said John Happ, Frontier senior vice president of marketing and planning, in an interview.

While Frontier feels an obvious need to diversify beyond its single hub in Denver, Happ says, the decision to go into Memphis was dictated by a variety of factors, including aircraft utilization. First, Frontier already serves 45 of the top 50 destinations from Denver; it believes Memphis, 61st on the list of destinations, has potential.