On Friday, Frontier Airlines announced it would institute an employee vaccination requirement starting on October 1st. With the announcement, Frontier becomes the second airline in the United States to announce a mandate for employee vaccinations. Employees who choose not to get vaccinated will need to provide consistent negative COVID-19 test results. This comes just a few days after CEO Barry Biffle expressed frustration over the lingering impact of the pandemic and variants on the airline’s second-quarter earnings call.
Frontier Airlines adds employee vaccination requirements
Denver-based ultra-low-cost carrier Frontier Airlines has announced that all of its direct employees will need to be fully vaccinated against COVID-19 by October 1st, 2021, following an announcement from United Airlines earlier on Friday. The airline has instituted this requirement in response to the rise of the Delta variant across the United States and lingering concerns on future travel. FrBarry Biffle, CEO of Frontier Airlines, stated the following on the new requirement:
“As we continue to watch the rapid increase of new COVID-19 cases across the United States caused by the Delta variant, I am concerned for the well-being of our team members, their families and friends. Safety is of the utmost importance at Frontier and we need to take every step possible for us to keep our teams safe, protect the operation and protect our passengers. The time has come to do what we can to help put an end to COVID-19.”
For those who have not reached fully vaccinated status by October 1st, Frontier will require employees to provide proof of a negative COVID-19 test “on a regular basis.” The airline is working with its union leaders to establish testing protocols for employees, but it is still pushing for increased vaccinations among its workforce. Mr. Biffle further stated:
“The good news is that the vast majority of our employees have already taken this important step and have gotten vaccinated. I hope the step we’re announcing today will further increase the percentage of our workforce that’s fully vaccinated.”
Frustration over the Delta variant
All through July, airlines reported their second-quarter earnings, and each discussed their outlook in terms of the newly rising Delta variant. The response largely was that there was little to no impact. Frontier reported their results just a few days ago after more about the variant and the rise in cases became clear. While there is still some uncertainty, Frontier’s executives expressed frustration over the ongoing impact of the pandemic and variants.
Within the last week or so, after the rise of the Delta variant became clearer, Frontier Airlines noted that it started to see a “softening in the level of bookings over seasonal norms,” according to CFO James Dempsey.
Mr. Biffle also pushed hard in the face of the rise of variants, discussing his customer base on its second-quarter earnings call:
“If we look at who’s traveling now and compare that to a year ago, I mean, you’ve got massive numbers of travelers and people didn’t travel a year ago – it wasn’t fares being too expensive or anything else – they were scared to fly, and the vaccinations made them feel safe and that’s what got people back out traveling […] We believe it is the vast majority of everyone who is traveling today is vaccinated.”
He also pushed for vaccinations among a broader part of the American population:
“Look, we’re in the safety business. We would support and continue to support any measures or incentives that it takes to get everybody vaccinated. You know the facts are real clear. There’s a lot of confusion over the last week or two, talking about breakthrough cases and so forth, but there’s three numbers that every American should know: 97, 99, and 100. 97% of everybody that’s in the hospital with COVID is unvaccinated. 99% or more of everyone dying of COVID is unvaccinated. It’s time for 100% of everybody who’s eligible to be vaccinated needs to get the vaccine. And that’s what’s going to get us through this Delta variant and get us all back on the road to recovery.”
Mr. Biffle also did not mince words when speaking about the recovery in terms of vaccinated and unvaccinated populations relating to vaccine mandates:
“So everybody’s worried about protecting the unvaccinateds’ feelings. Let’s start talking about the vaccinated. Vaccinated people feel better about everybody on the plane, or at their destination, or at the restaurant, or their cruise ship. They feel better about it when they know [about the vaccination requirement]. We believe – and while we’ve been studying it – it’s actually an accelerant for demand.”
Indeed, that sentiment pushed through in Frontier’s third-quarter outlook. The airline, just before releasing them, revised downward some of its estimates. It expects capacity versus 2019 in the quarter to be up 2-4%. However, it expects its adjusted net income margin range to be 0% to 5%. Essentially, Frontier expects that it will likely not turn a large profit and may even turn a loss if current trends continue.
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What employee vaccination mandates do
Throughout the crisis, the biggest question has been what airlines do for crews exposed to the virus or if they test positive. For much of 2020, that was not too much of a concern as airlines were not flying as much as they typically did and had excess crewmembers that could take over flying, or they had enough larger aircraft available to upgauge flights in the case where an airline had to cut down on its operations.
In 2021, the situation is vastly different. Having large numbers of employees out sick can wreak havoc on schedules. If the sickness hits both frontline employees and people behind the scenes to keep the operation running smoothly, that is a recipe for disaster. Frontier is trying to mitigate that.
As long as there are case spikes. As long as hospitals continue to operate under strain. As long as variants continue to thrive, Frontier knows that it will be a ridiculously choppy road to recovery. Already, this summer’s case surge is worse in terms of absolute numbers than the surge from around this time in 2020, and there are few signs that the surge will abate anytime soon.d
From a business point of view, uncertainty can lead to losses, operational unreliability, and a step backward in the overall recovery – a step it has no interest in seeking the industry taking. Frontier is looking to move beyond COVID-19, and it continues to push people to get vaccinated. Now, it is trying to set an example for its customers by asking employees to get the vaccine or else subject themselves to regular testing.
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