Frontier Airlines 2010 Annual Report Download - page 8

Download and view the complete annual report

Please find page 8 of the 2010 Frontier Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 169

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169

Business Strategy
•
Continue to operate a high-quality fleet of aircraft across an efficient network - We intend to maintain a modern, high-quality fleet o
f
aircraft that meets or exceeds stringent industry operating standards and complies with the terms of our fixed-
f
ee regional je
t
code-
s
hare agreements. We also intend to continue to operate and optimize our existing network and hubs to make our network as
efficient as possible for both our Partners and branded customers.
• Continue to operate a diversified business model that generates compelling returns on invested capital for our
shareholders - Our business model is unique among US airlines in that it combines the stable cash flow generation of our fixed-fee regional
jet operations with the attractive growth prospects of our branded operations at Frontier. We believe that this diversity of service offerings
provides us with a distinct advantage over our competitors and provides for a very stable base of cash flows as well as significant upside
from our branded Frontier platform.
•
P
ursue a fleet renewal strategy that further improves our cost structure -
s previously disclosed, we have placed a firm order with
E
mbraer for the delivery of six E-190 aircraft with the option to purchase another 18 E-190/E-195 aircraft at a later time. This
decision supports our strategy to continue exiting the smaller regional jet aircraft market and focus on larger aircraft at both ou
r
regional jet and branded operations which will greatly enhance Republic's unit cost structure.
•
Continue to take advantage of growth opportunities resulting from industry consolidation and continue to grow Frontier's
network -
I
t is our belief that the recent merger activity in the domestic airline sector could lead to further opportunities fo
r
R
epublic to gain market share as the large network carriers consolidate their hubs and reduce their presence in certain markets.
•
P
ursue alliances to broaden our existing network and customer reach - We intend to pursue strategic and long-term alliances with
other airlines in order to broaden our existing network, generate larger economies of scale and provide a greater number o
f
attractive destinations to both existing and new customers. We believe that strategic alliances are a cost-effective method to grow ou
r
market share and expand our customer base.
Markets and Routes
Markets
As of December 31, 2010, we offered scheduled passenger service on 1,540 flights daily to 128 cities in 41 states, Canada, Mexico,
and Costa Rica.
Fixed-fee Routes
Our Partners determine the routes that we operate for them, which are subject to certain parameters in our agreements. The
following table illustrates the hub and focus cities for each Partner as of December 31, 2010:
Partner Hub and Focus Cities
American Chicago, IL
Continental Houston, TX and Cleveland, OH