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Menke contributes continuity
'Animal' campaign among Frontier chief's successes
Published August 15, 2007 at midnight
Sean Menke knows where the conference room is.
It's one of the advantages of bringing back a six-year veteran of the company to be the CEO. When too many people crowd into a corner office at Frontier Airlines' Kittredge Street call center, he knows where to take the group to make them more comfortable.
Frontier said Tuesday that Menke, 38, would leave Air Canada, where he's worked the past two years, to take over as chief executive. Outgoing CEO Jeff Potter, 47, resigned to join luxury-resort company Exclusive Resorts in September.
Menke will receive an annual salary of $325,000 and be eligible for a bonus. He gets 100,000 stock options and 30,000 shares of restricted stock.
Menke worked at Frontier from January 1999 to June 2005. He contributed significantly to the "A Whole Different Animal" campaign, with its memorable characters painted on the planes' tails.
He left for an executive vice president position at Air Canada, which is nearly 10 times Frontier's size. While serving as Air Canada's chief commercial officer, Menke was involved in the carrier's efforts to tweak pricing and service while competing with WestJet, the Canadian version of Southwest Airlines.
Menke moved his family back to Denver in May and continued to work in Montreal, since so much of his job involved travel anyway.
As surprised as anyone when Potter put in his notice, he responded quickly when Frontier's executive recruiter called.
"It's weird how things sort of come full circle at times," Menke said. "I know the company well, I love the company, and it's a lot easier when you know the people."
While Potter will remain on the board, Frontier is also losing Chairman Sam Addoms, one of the company's founders. Menke describes both as "mentors," but said, "The company isn't Sam and Jeff."
"It's all the employees, it's everything that's taken place," Menke said. "Their vision is extremely important, but the senior management team Jeff put together is very strong. I'm walking in and the cupboard is full."
As part of the Menke announcement, the company said Senior Vice President-Operations Chris Collins will become executive vice president and chief operations officer.
It promoted Chief Financial Officer Paul Tate to executive vice president and General Counsel David Sislowski to senior vice president.
Together, they will work to return Frontier to profitability, which should help reverse a significant decline in the company's stock price. The company's shares have fallen 70 percent during Potter's tenure, in no small part because of investor fears about competition with Southwest.
Menke declined to answer most strategic questions, saying he'd spend the first couple of months listening to the Frontier team. But he said the board and senior management believe in the company's "diversification" program, which includes the new Lynx regional service, the use of Embraer jets to certain destinations, and more domestic and international flights from cities other than Denver.
"All the eggs aren't in the Denver basket," Menke said.
Analysts believe that Menke is a good fit for Frontier, which operates in 30 states, Canada and Mexico, and has a fleet of regional jets and plans to start a turboprop operation, called Lynx Aviation, this fall.
"He's probably about the best Frontier could have hoped for," Calyon Securities analyst Ray Neidl said. "He's got lots of experience and a good reputation."
Aviation industry analyst Mike Boyd said Menke will provide good continuity. "There's a lot of momentum at Frontier, and I think we'll see some changes going forward," he said.
Sean Menke
New job: president and CEO, Frontier Airlines
Age: 38
Old job: Executive vice president and chief commercial officer, Air Canada
Résumé: Air Canada, 2005 to 2007; Frontier Airlines, 1999 to 2005. Before Frontier, Menke served in marketing and operational roles at United Airlines, Colorado Springs-based Western Pacific Airlines and America West Airlines.
Education: Executive MBA from the Daniels College of Business at the University of Denver, and dual bachelor's degrees in economics and aviation management from Ohio State University.
Family: Wife and three sons, ages 4, 2 and 1 month
Q&A with Sean Menke
You've really been ahead of the curve with flights to Mexico. How much more time do you have before others jump in?
An international marketplace is different than the domestic marketplace with the (agreements) between the two countries. It's not as if there are an unlimited number of carriers who can operate there. And the Mexican government came out a week or two ago, and they stated clearly they were not open to 'Open Skies' agreements with the U.S. because they were concerned about their own air-transportation infrastructure. They don't feel their carriers can compete effectively vs. the U.S. carriers.
So if you get Open Skies, you can have all these carriers come in, and you have AeroMexico and Mexicana having a hard time competing.
What are you going to do to get the share price up?
To me, it's strictly based on profitability.
The carrier has gone through a period of not being profitable, and it's clear the investor base, the analyst base, are going to look at how you have sustainable profits going forward and what's the strategy for doing that. That's the bottom line, and that's what it should be.
So that's why, when I look at the strategy the team has put into place, I will spend the next couple of months listening, listening to what's taking place and what they've put together. Then we'll take the time to tweak things. For me, it's really too early to say, 'this is going to happen, this is going to happen,' because I'm not up to speed on things.
What did you learn from WestJet's competition with Air Canada?
Everything is not based on price. There's been this big debate on airlines, if it's a commodity marketplace based on who has the lowest fare out there. What I learned is it's really how you bundle your products and services and how you try to sell them. You do have the capability of selling products and services that people will pay more for. I also learned competition makes all parties better, and it benefits the consumer, because you have to have your best foot forward to be in the game. That's taking place in the Canadian marketplace.
The Associated Press contributed to this article. David Milstead is finance editor of the Rocky Mountain News. He can be reached at milstead@RockyMountainNews.com or 303-954-2648.
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