Frontier Airlines wants to give up six of its 14 gates and reduce the space it leases at Denver International Airport by 10,950 square feet, according to a proposed lease amendment.
But, despite the pullback, the airline says it has no plans to further reduce its service in Denver.
“We had too many gates, and so we gave back excess gates that are needed by the airport,” Frontier spokesman Jim Faulkner said. “We will grow over 10 percent next year at DIA and will probably add back gates at some point in the future — not reduce.”
The Denver-based airline has a five-year lease for 14 gates that expires at the end of 2016. The proposed change will cut $3 million from the annual gate-rental fees Frontier pays the airport, reducing its bill to $27.4 million, according to documents filed with the city.
The amendment will be presented to the City Council’s Business Development Committee on Oct. 13.
The official gate reduction is the latest in a series of changes the Denver-based airline has made to “right-size” its operations at DIA.
In April 2014, Frontier announced it would become an ultra-low-cost carrier and quickly began decentralizing away from its Denver hub, offering more point-to-point flights instead.
This decreased the number of people who pass through Denver on connecting flights and effectively reduced the airline’s presence in Denver by about 43 percent over the past year.
Still, Frontier is growing and has logged record profits, fueling speculation that an initial public stock offering is on the horizon.
Frontier held about 11.6 percent of DIA’s overall market share the first six months of 2015. United, DIA’s largest carrier, grew to 42.6 percent, and Southwest came in second at 29.7 percent.
Frontier in November informed the airport that it would be making flight and job cuts to help mitigate what it says were hardships caused by DIA’s increased taxes and landing fees, and lack of city incentives.
That move was seen by some as a strategic maneuver by Frontier related to the airline’s lease negotiations — especially in light of a deal struck between the city and United Airlines earlier in 2014.
DIA will soon begin negotiations with Frontier and other airlines for the next new lease period that begins in 2017, airport spokesman Heath Montgomery said.
United emerged from its negotiations last year with concessions that, among other things, eliminated some penalties for missed passenger traffic goals in exchange for the airline’s commitment to keep its hub operations at DIA through 2035.
The airport also agreed to restructure some of its bond debt to save carriers an estimated $45 million — $35 million of which would be realized by United. Frontier, DIA’s third-largest carrier, would realize $2.5 million of the overall savings.
In May 2014, Denver also agreed to reimburse Frontier up to $1.6 million for repairs to a mostly unused hangar where the airline said it would open a maintenance facility — a deal that included a five-year, nearly $12.4 million lease.
The timing of Frontier’s gate reduction may actually prove serendipitous for DIA, Montgomery said. Freeing up the gates will help the airport save money and meet deadlines on several critical improvement projects.
“It is helping the airport move forward with construction projects on Concourse A and on Concourse C, allowing us to improve gate use efficiency,” he said. “The airport is also taking advantage of the gate vacancies to make improvements within the airport, such as carpet replacement and installing new power hubs.”
Other airlines are quickly filling the gaps left by Frontier.
United and Southwest both have added flights.
Boutique Air recently signed a lease for counter space and a small office in Concourse A as it grows its business. The tiny airline currently flies daily between Denver and Chadron and Alliance, Neb.
Laura Keeney: 303-954-1337, lkeeney@denverpost.com or @LauraKeeney
