When Frontier Airlines started flying out of Trenton-Mercer Airport, skepticism abounded. After all, Frontier was the 15th airline to try to make a home at TTN. None of the others lasted more than a few years.
When Frontier announced it was going to fly full-sized Airbus planes out of the regional airport, even more eyebrows were raised. The only other airline to try that had been Eastwind, offering three flights a day to Boston and North Carolina for business travelers.
But 14 months later, Frontier looks like it is at Trenton-Mercer to stay. The airline now flies to 14 cities, with 50 flights per week . “We’re pleased with our success so far,” says Daniel Shurz, vice president of Denver-based Frontier Airlines. “We put our toes in the water to start with, and we saw a good response immediately, and the more we do, we continue to see a positive response.”
So how did Frontier succeed where so many others had failed? Shurz will explain his strategy Wednesday, February 19, at 7:30 a.m. at the Princeton Chamber of Commerce’s Business Before Business Breakfast at the Nassau Club of Princeton at 6 Mercer Street. For tickets, call 609-924-1776 or visit princetonchamber.org. Tickets are $25 for chamber members, $40 for nonmembers.
Shurz grew up in a town 25 miles north of London and showed an interest in transportation from an early age, starting with trains. Shurz has worked in transportation since graduating from college in 1996. He says his mother, a retired pediatrician, and his father, a management consultant, probably would have picked a different career path for him.
As senior vice president of Frontier’s commercial division, Shurz oversees all commercial activities. He has a bachelor’s from Queen’s College in Cambridge and an MBA from the University of Chicago, where he focused his studies on strategy, economics, and international business.
Shurz got a chance to practice the “strategy” component of his degree in 2012 when Frontier was purchased by the Indigo Partners investment group. The discount airline had carved out a space in the highly competitive Denver market by being one of the cheapest discount carriers around. But Shurz realized the airline had too many of its eggs in one proverbial basket.
“It’s dangerous to be reliant on one market,” he says. “We started looking at areas of the country, and the northeast looked interesting. It’s the region of the country with the lowest penetration of low-cost carriers, and the highest average airfares.”
Partly, this was because the major airports were congested, leading to higher operating costs there. So Frontier began looking at alternatives to places like Philadelphia and Newark. That’s when he noticed Trenton-Mercer, a small airport in Ewing that had runways big enough for commercial planes, but which was only being used for private and corporate aviation. It had an entire terminal building that was going unused.
“It seemed there was a good opportunity to try something there,” Shurz says.
There were a number of things that made Trenton-Mercer appealing. It was located near a large population of potential travelers. It was positioned to compete with, and take passengers away from, larger metro airports in Philadelphia and New York.
What Frontier did next has lessons that can be applied to any business venture. Shurz learned from failure. He was well aware of the previous failed attempts to make an airline work at Trenton-Mercer. He studied them intensely, in fact, especially the ill-fated Eastwind. “I looked back at the previous 20-year window,” he says. “Other than Eastwind, no one has flown full-sized jet aircraft in Trenton during that period.”
All the carriers that tried to fly small planes inevitably ran into the same dilemma: small planes can carry fewer passengers, which means that in order to make a profit, they had to charge more money, which meant raising fares, which meant appealing to a wealthier clientele, which meant, ultimately, not having enough customers to sustain the business.
“That’s always going to be a limited strategy,” Shurz says. “You’re always going to be a niche operation.”
Eastwind had its own problems even though it used full-sized planes.
“Their airplanes didn’t have the range to make it down to Florida,” he says. Frontier’s first test route was Orlando, and Florida remains its most popular destination, especially with travelers looking to escape the Northeastern winters.
Eastwind was also undercapitalized he says, calling the firm typical of the startups that formed after airline deregulation in the 1980s. “They were still driven by what I would call the romance of aviation as opposed to the business realities,” Shurz says.
Frontier’s success at Trenton has been much touted in the business community as a good sign for economic growth in Mercer County. The airline’s flights are not specifically geared toward business travelers, however, and are aimed more at personal travel. Intensive business travel would require several flights a day to the same city, but Frontier usually only has a few flights to each destination a week.
Shurz said Eastwind tried that strategy, and it didn’t work. “There was no point in offering high-frequency travel to different destinations,” he says. That approach also didn’t go along with Frontier’s identity as a low-cost carrier. Business people using the company expense account for their plane tickets are far less likely to buy tickets based on price than those who are spending their own money travel, so a discount airline has less appeal.
But perhaps the most important factor of Frontier’s decision to fly from Trenton was the lack of competition. For whatever reason, other airlines had stayed away, so Frontier has the terminal all to itself. If you want to fly out of TTN, you have to take a Frontier plane.
Frontier has learned from its experience at Trenton, and last year started flying out of another small airport in New Castle, Delaware, as a result of its success at Trenton, Shurz says. And Frontier never would have been able to do it if the airline had learned the wrong lessons from the previous failures. “If three people had tried what we tried and failed, obviously it would seem strange to come in a fourth time,” Shurz says. “But no one has tried what we’ve been doing.”