Frontier
Frontier Airlines was formed in June 1950 through the merger
of three airlines;
- Monarch Airlines which
flew the Colorado route.
- Challenger Airlines which
flew the Colorado and Wyoming routes.
- Arizona Airways which
flew routes in Arizona
The merger was in part due
to the Airmail Act of 1930. Airlines where competing for US
Airmail contracts and for a passenger market. Frontier
Airlines already established routes in Colorado, Wyoming and
Arizona began strengthening its fronts by adding new markets
to its service. By the end of the 1950's Frontier Airlines
had established routes in Missouri, Montana, North Dakota
and Nebraska.
By the 1960's airlines where
heavily competing for dominance in the passenger market.
Many of the airlines where developing incentives that would
lore passenger to their carrier. By 1963, Frontier Airlines
initiated several passenger saving plans that resulted in
the companies gross earnings improving by 25 percent. By the
mid 60's the airline was providing air travel to over a half
a million passengers. Its aircraft fleet had grown from the
old DC-3 to Convair 580 and then to the Boeing 727. Frontier
merged with Central Airlines which allow the company to
assume routes in the Midwest and the southwest.
With the expansion into other
routes, it became much more difficult for Frontier to hold
its front from larger carriers who had initiated price was
against the carrier. By the mid 1970's Frontier had acquired
routes in Canada and Mexico and continued to expand its
fleet of aircraft which now included the Boeing 737 and it
continued to make record profits. However, by the early
1980's Frontier began to experience unforeseen financial
difficulties as a result of a depressed economy and high
cost of aviation fuel.
Many economist blamed the
sump in the market was due Airport and Airway Development
Act of 1970. Which brought about landing fees, aviation fuel
tax, runway fees and passenger tax. Frontier Airlines was
now reporting record loses and was having great difficulties
in keeping its front doors open. Frontier Airline's board of
directors had approved a plan that would allow its employees
to purchase over 200 million dollars of Frontier stock at 17
dollars a share. However, Frank Lorenzo was willing to pay
more for each share of Frontier company stock. However, this
angered Frontier employees as they were aware of Lorenzo
reputation. People Airlines stepped in and made an offer to
purchase company stock at 24 dollars a share. With great
hesitance, Frontier's board approved the sale with People
Express Airlines.
However, by the mid 80's
Frontier Airlines was unable to improve its fiscal matters.
In the summer of 1986 Frontier representatives entered into
talks with representatives of United Airlines to sell off
Frontiers holdings. However, talks broke down when United
employees learned how Frontier employees would be absorbed
by United.
After talks broke down with
United Airlines, Frontier was unable to identify an
appropriate buyer and was forced to file bankruptcy and
close it doors. Upon Frontiers closing its door, Continental
Airlines stepped in and purchased Frontiers holdings and
began flying its routes. |