Although international tourism has declined and economic uncertainty looms, Frontier Airlines CEO Barry Biffle remains confident in the budget airline’s outlook.
“People think that there’s some kind of Armageddon going to happen,” Biffle said during a sit-down with Hallie Jackson of NBC Nightly News. “I think that as we look here today, I’m optimistic.”
Amid President Donald Trump’s ongoing global trade war, travel experts are raising concerns that what was expected to be a strong tourism year may be derailed by an economic slump.
Prior to President Trump’s announcement of a 90-day suspension on the majority of his proposed global tariffs, Delta Air Lines CEO Ed Bastian told CNBC last week that air travel had nearly come to a standstill for both business and leisure passengers.?
“I think everyone’s prepared for uncertainty,” Bastian said. “If that continues and we don’t get resolution soon, we probably will end up in a recession.”
Biffle recognized the grim perspective that’s echoing throughout the airline industry.
“What’s become clear is, obviously, there’s been some challenges with travel demand, and we’ve seen it in all industries now. Hotels, airlines, cruise lines are seeing less bookings,” he said.
Still, Biffle maintains that Frontier’s ultra-low-cost model gives it a competitive edge, particularly as travelers grow increasingly budget-conscious. He compares the airline’s draw to that of discount retailers like Walmart, arguing that value-driven companies often outperform during economic downturns.
“What’s happened is there’s going to be a massive reversal of fortune,” he said. “Over the last several years, the legacy carriers have done very, very well at the expense of us, but there’s?“In any type of recessionary or kind of economic challenge environment—the ‘Walmart effect,’ you know—businesses like ours do well,” he added.
In the face of economic instability and tougher immigration policies, more international travelers are opting to cancel their trips to the U.S. Data from the National Travel and Tourism Office shows a 12 percent decline in foreign visitors to the United States this March compared to the same month last year, NBC News reported.
“Right now, we’re seeing boycott travel to the United States out of Europe,” said Biffle. “So can you imagine?maybe not 70 percent—if it’s just down 20 percent, that’s a massive market. This is a huge challenge.”
Biffle anticipates that domestic U.S. destinations will dominate Americans’ travel plans this summer.
“Domestic is in vogue again because of a lot of things going on in the marketplace,” he said. “And so I think you’re going to see a lot of people travel all over the United States this summer.”
To better serve this changing market, Frontier has introduced new bundled fare options that include perks like extra legroom and guaranteed empty middle seats. Later this year, the airline plans to roll out a first-class offering, and it also intends to scrap bag fees this summer—a bold move following Southwest Airlines’ controversial decision to start charging for checked baggage.
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