Dave Siegel is out as CEO of Frontier Airlines, Frontier says it’s because of their poor operational performance and customer service issues but it probably isn’t really. He wasn’t ‘the guy’ of Frontier’s new ownership, and he hung around about 18 months. He also probably wasn’t the right fit for Frontier anyway (and doesn’t exactly have a strong track record running airlines to begin with).
Bill Franke was Chairman and CEO of America West before Doug Parker took over just prior to 9/11. His Indigo Partners bought Spirit in 2006 and turned it into the low cost carrier that it is today as its board chairman. They bought Frontier in the fall of 2013 and he sold his stake in Spirit.
Interestingly, Dave Siegel, who had been Chairman of Avis and then President of US Airways before Doug Parker’s America West took it over, was CEO of Frontier and stayed on after the Indigo Partners acquisition.
Barry Biffle was Managing Director of Marketing at US Airways back in 2004 under Ben Baldanza, who became CEO of Spirit and made him Vice President of Marketing. He left Spirit to become CEO of VivaColombia (for about 10 months) before becoming President of Frontier under David Siegel as CEO (Siegel had been CEO of US Airways when Biffle was there). (I met Biffle years ago at a hotel bar near US Airways headquarters in Crystal City after he, Baldanza, and John Reistrup particiapted in a chat on Flyertalk.)
Frontier, and Biffle, aren’t mincing words about Siegel’s departure — he’s the fall guy for poor customer service and operational performance.
According to the Wall Street Journal, Frontier “declined to elaborate on why Mr. Siegel resigned.”
The Denver Post, though, characterizes it differently,
Frontier president Barry Biffle would not elaborate on Siegel’s departure other than to say that the leadership restructuring is designed to fix myriad operational issues that have dogged the airline as it transitions into an ultra-low-cost carrier.
“This is about completing our strategy. We believe we’ve got the costs on the right track; we believe we’ve got the network on the right track,” he said. “We’ve just got to finish the last part of our promise of ‘Low fares done right,’ which is to run a reliable airline.”
So Siegel is the reason for Frontier’s abysmal operational performance. And the change – which has Franke and Biffle jointly replacing Siegel as ‘office of CEO’ – is about fixing that.
Biffle says the operational problems aren’t related to their low cost carrier strategy — that customer complaints were driven by their call center transition (“we did not answer the phone”) and operationally they were already awful before becoming a low cost carrier.
The truth is they were working to become a low cost carrier even before the ex-Spirit team took over. Although they’ve taken it much further in the intervening time, including gutting their elite program including eliminating free checked bags, advance seat assignments for extra legroom seating, complimentary beverages, and bonus miles for top frequent flyers.
Frontier offers very cheap flights and very little besides (eventual) transportation. That’s what they’re after, and consumers used to a more upscale product take time to transition. It didn’t help that Frontier moved to a less expensive and less functional reservation system earlier this year — airlines do not generally benefit (be it US Airways with their America West merger or United with the Continental merger) from moving to a less costly but less functional passenger service system. It’s not just the hub of the operation, but the cash register as well.