Airtran, Frontier Sharing Miles

The low-fare carriers will jointly offer frequent flier miles to passengers on either airline.
Author:
Publish date:

Low-fare carriers

AirTran Airways

(AAI)

and

Frontier Airlines

(FRNT)

say they will team up in a partnership to jointly offer frequent flier miles to passengers on either airline.

The move enables each carrier to use its partner's frequent flier programs to attract new passengers from outside its network. AirTran serves 51 cities, mostly in the East, from its Atlanta hub, while Frontier flies to 55 cities, mainly in the West, from its Denver base. Between Atlanta and Denver, each carrier has three daily flights.

"We think we have a great business model, but our frequent flier program lacks the size and scope of many of our competitors' programs," said AirTran CEO Bob Fornaro in an interview. "This gives us a big boost in our offerings to our customers, and it will create good revenue benefits." AirTran's frequent flier program has about 4 million members, and Frontier's has about 2 million.

Fornaro said there are no plans to expand the program into a code-share arrangement, which allows one carrier to sell tickets on a second carrier's flights. "We don't think we would get that much more revenue from a code-share, but we would generate a lot of complexity," Fornaro said. "So we found a simple way to do this."

Frontier elected to partner with a carrier "with cultural similarities," said Andrew Hudson, the carrier's senior vice president of sales. "We wouldn't do something with just brand X," he said.

A typical customer might be a Frontier passenger flying from Denver to Pensacola, or an AirTran passenger flying from Atlanta to Fresno. In either case, the passenger could fly to the other carrier's hub and change planes. The benefit would be frequent flier miles in the program of choice. The trip would, however, require booking separately on two airlines.

Reciprocal frequent flier benefits became available Tuesday and can be redeemed starting Jan. 1. Additionally, the carriers have begun referring passengers to one another on their Web sites and reservations lines.

In a report issued Tuesday, Prudential securities analyst Bob McAdoo said the arrangement should be "modestly positive" for each of the airlines, but its impact is limited.

"They are not code-sharing and a customer flying an itinerary using both airlines will still have to visit both Web sites," he said. "We do not view this as a likely signal that these two carriers might eventually merge."