Budget airline king shifts strategy

Bill Franke, 89, who built his fortune on bare-bones fares and fees for everything, now says first-class seats make sense for Frontier Airlines in the U.S. market.

Frontier rolling out first class

Frontier plans to launch first-class seats next year on its Airbus fleet and is adding SpaceX's Starlink Wi-Fi to improve the passenger experience.

Not Singapore Airlines first class

Franke told CNBC he's not trying to match luxury carriers, but rather give consumers an upscale option that remains competitive on price.

“We're not trying to have a Singapore Airlines first class. What we're trying to do is give the consumer an option.”

Ultra-low-cost model under pressure

Rising pilot salaries, maintenance costs, and operating expenses have squeezed the budget airline sector that once thrived on minimal spending and rapid growth.

Franke's old stance on freebies

At the 2017 Dubai Air Show, Franke compared consumers wanting low fares and free amenities to spoiled teenagers, saying they expected too much.

“They had been flying with all the amenities for ever and ever and that's what they think they ought to get.”

Big carriers copied the playbook

United and Delta now offer bare-bones fares with fees for everything, and even apply this strategy to first class, stripping premium passengers of free seat selection.

Franke's global airline empire

The 89-year-old has invested in or operated budget airlines across Chile, Hungary, the Philippines, and the U.S., and was an early investor in Ryanair.

Spirit collapse, Frontier survives

Spirit Airlines collapsed in May after a failed JetBlue merger, leaving Frontier as the largest U.S. discount carrier. Franke remains a major shareholder.

Consumers smarter, AI changes game

Franke says modern consumers use artificial intelligence and data tools to compare fares better than ever, and airlines are uncertain how AI will reshape booking decisions.

Price still matters most

While consumers are smarter, price and schedule remain top priorities, especially for middle-class and younger flyers who still focus on the lowest fares.

“For a lot of consumers, whether the ticket costs $200 or $125 is not going to be the decision-maker, but for a lot of people it is still.”

Frontier barely profitable since 2019

Frontier has been profitable only one year since 2019, while JetBlue hasn't been profitable since then. Higher fuel costs and pandemic disruptions have hit the sector hard.

August fares up 23 percent

Airlines including Frontier have raised fares to cover costs, with August airfares up more than 23 percent compared to last year, according to federal data.

Premium seats not everywhere

Franke says the upscale model works in mature U.S. markets with Delta, United, and American, but efficiency remains key in emerging markets like Hungary and Peru.

Franke's alumni run major airlines

His former employees now lead United, American, and other major carriers. Many trace their careers back to Franke's time running America West in Tempe, Arizona.

A demanding mentor's lasting impact

Franke's former executives describe him as a hard-ass mentor who demanded excellence. Scott Kirby called him a formative influence, while Steve Johnson likened him to a second father.