Frontier shuts down call centers, transitions to digital communications

Yahoo Finance's Brad Smith and Rachelle Akuffo discuss Frontier's decision to only use digital customer service systems ahead of the holiday travel season.

Video transcript

BARRY BIFFLE: What we're looking to do is add more value for the overall travel experience and sell them more and more options, and that just enables us to further lower our fares and enable more people to travel. What we can do is continue to provide other valued valuable services and products, so that we can kind of offset that, and so we can enable more and more people to fly.

- Well, that was Frontier CEO Barry Biffle earlier this month on how his airline hopes to rein in spending, and we're seeing him follow through on that promise now with the airline on Friday switching off its customer call center. Here with more is Yahoo Finance's Brad Smith. Brad, I know this isn't welcome news.

BRAD SMITH: This is not welcome news for people who are gearing up to travel. PWC anticipates that 47% of Americans will be traveling this holiday season, and for the passenger disruptions in the form of delays or cancelations that we've seen over the Summer, this could be some unwelcomed news for potential travelers who are leveraging some of the Frontier Airlines routes in this holiday season. Now, what's more about this, we do have a statement from the company, as well, here, and it is noteworthy that the company had said within this and within some of these plans as a result of their function in customer care, they're transitioning to digital communications, fully digital communication. So just think about some of the experiences that you've had within the chat bots or just getting an automated line, and sometimes, that's not necessarily the most human touch that we may get over the course of some of our travel hiccups.

But at the same time, it is this push for Frontier to really trim some of the costs, to be a little bit more efficient, and leverage some of the data that they've seen, even in those communications with customers, as well, saying that most of their customers have actually leaned into or preferred some of those digital communications. So perhaps, some of their chat bots over at Frontier are just a little bit better than the rest of the industry, but again, this is at a time where we're seeing some of the industry actually get back up to its pre-pandemic throughput, depending upon the day that you're kind of comparing it to. We've actually seen the highest number of travelers just in the most recent days than we have since the time pre-pandemic. So with that in mind, we're going to be watching closely to see where some of those travel experiences improve, where they hold steady, or where there might be some more headaches that are on the tarmac going forward, so as we get towards some of the peak holiday travels, even as we're coming off of that Thanksgiving high of travels, as well, Rochelle.

- And it's interesting, because even though consumer demand is still strong, consumer satisfaction with airlines, taking a downturn. So I'm just picturing people sort of screaming into the phone, customer service, like 10 times, which is what they tend to do when they're trying to just reach a human being and resolve things. Do you think then customer service satisfaction might suffer then, perhaps, if you're new, and you're not someone who likes to lean into this sort of technology?

BRAD SMITH: That's a great question. I think consumers will also need to scream serenity now into some of those phone calls, as well, because that's what they're going to need as they're going throughout some of these travel experiences over the course of a high demand travel period. And what we've heard time after time, again, from some of the travel CEOs, whether that be the Hilton side of the equation on the accommodations industry, or even within Airbnb, as we were speaking with Brian Chesky, just a couple of weeks back, and then, additionally, you think about some of the commentary that we've heard from airline CEOs over this recent earnings season. They're all talking about this increased travel demand, this shift from spending on goods to services and this golden age of travel, as Chris Nassetta over at Hilton had described it to us during the Yahoo Finance all market summit as well.

So with that and that increased air of demand that they're seeing, how will they also ramp up the customer experience side of the equation too? Because there is still a value that consumers are looking for, even if they are paying up because of that higher demand period too. So locking in that value, locking in that experience is still going to be core to retaining the net promoter score, positive net promoter score, and for Frontier, it'll be interesting to see how this strategy plays out for them, especially coming after they hadn't been able to move forward that acquisition attempt for Spirit Airlines as well. So now, some of the cost cutting starts to come into the equation, and we'll see where that value payoff for the experience really holds up for their passengers, as well, particularly on this news headline.

- I mean, that's true, and as we're seeing, people are willing to put up with a lot for a good deal. So clearly, demand not going anywhere. Yahoo Finance's Brad Smith, good to have you.