Frontier Airlines entered nearly 500 new routes after transitioning to the ultra-low-cost carrier (ULCC) model in 2014. This paper examines the effects of these route entries on incumbent fares and service quality. To account for variation in entry timing, I apply a staggered difference-indifferences (DiD) design to a carrier-route level panel with data on fares, on-time performance, and carrier operations from the U.S. Department of Transportation. I also condition on pre-entry route characteristics to account for route selection.
I find Frontier’s entry reduces incumbent average fares by 7.2%, equivalent to $14.3 per ticket. Fare reductions are larger at the lower end of the distribution but present throughout. Flight reliability remains largely unchanged, while incumbents increase flight frequency by 10.1%. Incumbent passenger volume also increases by 13.1%, suggesting incumbents add flights to accommodate additional demand. Total route-level traffic also rises, with approximately two-thirds of the increase reflecting Frontier’s own ridership. The joint fare and passenger response implies elastic incumbent demand and approximately $134.3 million in monthly consumer-surplus increases, under a simple linear-demand approximation. Additional results suggest incumbent responses vary across carrier types and are larger on routes where Frontier provides frequent service after entry. Taken together, Frontier’s entry benefits consumers with fare cuts and market expansion without a substantial decline in service quality.