Frontier (FRNT) is planning to launch its new Bombardier (BBD) Q400 operation, Lynx Aviation dba FrontierExpress, in July/August 2007 and expects to invest between $25 million and $28 million in start-up costs, said Jeff Potter, CEO, in a conference with investors. The company has drawn a 650-mile circle around its Denver hub, targeting that catchment area for the turpoprops, as well as for the 20 regional jets on which it is currently seeking proposals (RAN, September 11. p.1) "The speed of the Q400 versus a regional jet is comparable and is almost identical in the 400 mile-and-under markets and only 15 minutes more in the 500 to 650 mile markets," said Potter in response to questions, adding the turboprop was chosen because of the challenges of serving Colorado mountain destinations. "Des Moines, for instance, at 600 miles is only an additional 10 minutes via a turboprop versus a jet." The fuel burn is 35 percent lower than a regional jet." Potter also cited Bombardier's noise vibration system as critical in the airline's decision, saying it mitigates most of the negative experience of passengers with respect to turboprops.

In terms of Frontier operating the aircraft, he reiterated previous statements saying the company wanted more control over the customer experience, but added part of the decision was based on experience certifying new aircraft. The company was founded 12 years ago with Boeing equipment and in the interim transitioned to Airbus. He said the Horizon partnership has been "extraordinarily successful" both in terms of financial and customer service and it will be the first to engage in discussions concerning the request for proposal.

The aircraft mortgage will be financed by a third party; he would not reveal the third party because exact details are yet to be hammered out. Aircraft deliveries start next May, with delivery for the initial order of 10 set for completion by December. The first class of pilots begin in February with groups of 10. Pilot training, conducted at Flight Safety International's simulators as part of the sales agreement with Bombardier, is slated for completion by the end of summer 2007. The first class will include management, check airmen and instructors, which will guide the airline through its certification process. If the airline firms up the 10 optioned Q400s, delivery for them will begin in March 2008 and be completed by January 2009. Potter also indicated there are no limitations to its scope clause.

In response to a question that Frontier was entering the short-haul market at a time when travelers are exhibiting a growing resistance to short-haul air travel, Potter indicated that short haul in the mountain west is different from a 250-mile short-haul route from a major hub. "We are geographically dramatically different," he said, adding that a four-hour drive from Steamboat Springs equals a 45-minute flight.

The new aircraft should generate an additional 554 million available seat miles (ASMs) with the delivery of the 10th aircraft, which equals 5.6 percent of the current mainline ASMs and 7.6 percent of the current ASMS flown by its Jet Express operation with nine Bombardier CRJs.