Inflight Entertainment (IFE) Marketing Plan

Agenda Current Situation Future Plans Analysis Feedback Conclusion

DTV video

Imagine Now Imagine what we could do….. Imagine the sizzle we can create….. Imagine the expectations we could exceed…..

School of Rock Paycheck

F9 Mexico

IFE Vision The Frontier commitment to provide “A Whole Different Animal” with its components drives us to stand out in the industry by providing superior comfort and services. The future of Frontier’s Inflight Entertainment must continually evolve by providing a product that exceeds the consumer’s demands and needs. The vision of Frontier’s Inflight Entertainment is to lead the industry by bringing the inflight experience to a level, miles above the rest. Frontier has a commitment of providing “A Whole Different Animal”. How do we do that through the inflight experience? We do it by exceeding the passenger’s Expectations. The vision of Frontier’s Inflight Entertainment is to lead the industry by bringing the experience to a level that is miles above the rest.

Current Situation Frontier’s current Inflight Entertainment consists of the Frontier inflight magazine and the LiveTV system (programmed through a satellite receiver by DIRECTV) At present we charge a $5 fee for the usage of DIRECTV and supply a “throw-away” headphone for free Frontier is expanding the LiveTV system with a video server containing 4 channels. It is Frontier’s responsibility to program these 4 channels Projected install completion date of the video server is late TBD Projected launch date of completed system is February 2004 Our current IFE is the F9 magazine and our LiveTV system which is programmed via satellite by DIRECTV. We charge a $5 fee for usage of DIRECTV on a leg of flight, we provide it free to our Summit and Ascent members and to all passengers on international flights. We are expanding this service by adding a VSU that contains 4 channels that Frontier is responsible to program – this is a unit that stores 40 hours of programming. Projected install TBD Projected launch date is February

Current Financials Our current revenues are derived from a $5 usage fee for DIRECTV The current average usage is at approximately 25% at an average 70% load factor We have yet to pay for the service The only revenues that we drive from IFE are the $5 charge for usage of DIRECTV. Our current average usage is 25% As you can see we haven’t yet paid for the service

Competitive Overview Jet Blue has the same system and does not charge for their DIRECTV service, it is unknown their objective for the use of that server, they believe the LiveTV system has contributed to an increase of 10% in their load factor United offers inflight entertainment that is canned – TV shows, news, movies and an audio selection at a $5 charge Continental offers entertainment both audio and shared video with a $5 fee for a throw away headphone Delta’s new Song will be offering an IFE system that is planned to have satellite delivered live TV and feature films – fee unknown Alaska Airlines is offering DigiEPlayer as their IFE, a hand held computer that holds up to 20 movies, games and current news for an $8 fee On the connectivity front: United and Continental are a part of Verizon’s JetConnect, Delta’s SONG is connected via Matsushita eFX Jet Blue has the same service we do, and are also adding the additional server – they have publicized that the LiveTV system has contributed to an increase of 10% to their load factor – they provide usage for free with a throw-a-way headset United has canned TV, audio selection and a shared movie on longer flights at a $5 Continental offers the same at the same price Delta’s new SONG carrier will offer a system that is similar to ours – the fee is unknown Alaska Airlines is offering APSs new digEplayer which is a handheld unit distributed both upon boarding and during flight at a fee of $8-10 depending on whether it is reserved or not United, Continental and Delta’s SONG all provide some type of internet and voice connectivity at varied fees

What the future holds In a highly competitive industry separation from other airlines will focus on customer service, the inflight experience is critical to developing this separation The key to evolving this experience is by providing entertainment individually and consistently throughout the cabin from flight to flight Today’s consumer wants choice IFE is the only element that can deliver this In a highly competitive industry how do we separate ourselves from the competition? We have to focus on the inflight experience and evolve by providing our passengers a choice of entertainment that is consistent throughout the cabin and from flight to flight IFE is the only element that can deliver this

Bulls eye for our target consumer Frontier’s target market is the top of the demographic profile: Average age: 41.5 69% male 75% married or living with partner Average amount of children .90 Average income $125,128 Well educated Lifestyle oriented Hot buttons – Inflight Entertainment and Creature Comforts The bulls eye for our targeted consumer is the top of our demographic profile – they are well educated, lifestyle oriented and demand inflight entertainment with the best of creature comforts

Goals Our goal is to increase revenue : Year 1 - $17.3 million Our goal is to turn the IFE experience into a revenue generator Here are goals we have set reflecting conservative financial projections

Objectives The objective is to market Frontier with the ultimate of creature comforts: Lead the industry Create a more consistent experience Provide greater comfort Deliver the brand Market the Frontier experience Create a positive memorable experience Exceed passenger expectations Provide great value Our objective is to Lead the industry , to continually evolve and provide entertainment and service that is innovative and exceeding the expectations of our passengers We also need to create a more consistent experience – we have to equip our fleet and provide like service on all aircraft We deliver the brand by marketing the F9 experience, we create a memories, loyalty and provide a great value that will bring our passengers back again and again

Strategies Provide DIRECTV for free Sell Headphones Build loyalty Consistent consumer experience Sell Headphones Value added Replace lost revenue Feature Films for a fee Extra revenue source Creates sizzle digEplayer on Boeings and Jet Express Advertising Bundle exposure points Hire sales/marketing firm Revenue generation where there currently isn’t any Reduce expenses Strategies are to provide DIRCTV for free; we can build loyalty and increase repeat customers by creating that consistent experience Selling headphones – we add value to the experience by providing a product that can be used again and again offered at a fair price [give samples – do comparison]

The Experience The proposed marketing plan is to provide the DIRECTV service for free; create a Frontier Channel, which will be provided free; program the remaining 3 channels with feature films for a fee; and sell a “high-end” quality stereophonic headphone. DIRECTV for free With a current average usage of 25%, this deliverable is not being used to it’s potential in building consumer loyalty The Frontier Channel programming that is lifestyle oriented and destination specific provided for free to the viewer look and feel of Frontier 3 channels of feature films for a fee or “pay-per-view” “feature films” that are still available in theaters The proposed marketing plan is to provide the DIRECTV service for free; create a Frontier Channel, which will be provided free; program the remaining 3 channels with feature films for a fee; and sell a “high-end” quality stereophonic headphone. a)       The Frontier Channel will provide programming that is lifestyle oriented and destination specific with program provided from Frontier’s partners, area attractions, sports, resorts and more. The video server has the ability to program destination specific allowing each segment to be different. The Frontier Channel is provided for free to the viewer and will have the look and feel of Frontier, embodied with the branding and spirit of who we are as a company and a business. b)       The 3 channels programmed with feature films for a fee will run “feature films” that are still available in theaters. Agreements have been made to test the LiveTV “film for a fee” with a profit share from following major studios; Disney; Warner Brothers; Universal; 20th Century FOX; Dreamworks; Paramount; Sony and MGM. The studio’s are all supportive and anxious to become involved on in the development and promotion of Frontier’s IFE. c)       Advertising will be available on all channels of the new server bringing additional potential for revenue to Frontier and value to the passenger’s experience. a)       An RFP to Provide an Integrated Solution for Marketing the Frontier Experience has been sent out to Promotional/Advertising/Marketing agencies. This RFP is a request to partner with Frontier to market the IFE components and more. Frontier will provide the opportunity to purchase a “high-end” quality headphone at a value price. The quality of this headphone exceeds inflight industry standard and will add to the enjoyment of Frontier’s IFE system. Distribution will be available on the aircraft and in the airport, creating an opportunity to sell the passenger twice.

The Experience (cont.) Advertising will be available on all channels of the new server additional potential for revenue to Frontier added value to the passenger’s experience Opportunity to sell a “high-end” quality headphone a value price added enjoyment of Frontier’s IFE system

Passenger Experience Passenger Experience DIRECTV free Frontier Channel free $ Purchase feature film   Headphone sales at Kiosk   Concourse / Gate Area Inflight / Cabin     $ Passenger buys headphones for viewing on LiveTV system Passenger brings their own headphones DIRECTV free Frontier Channel free $ Purchase feature film Frontier Passenger Passenger Experience $ Purchase headphone Passenger doesn’t buy headphones Passenger Experience Reads Works Watches F/As work  

Projected Revenue Forecast

Strengths, Weaknesses, Opportunities and Threats Our strength lies in consumer demand The revenue opportunity is significant Enhanced value of the Frontier Experience Playing the pioneer of this new technology, there will be a period of “getting the bugs out” which could be perceived as a poor product Not make any money Differentiation Strengthen our branding Opportune time to be first in the industry to offer a feature films for a fee Media exposure and promotional opportunities Threats of the industry standard of IFE surpassing ours or providing programming for free or no cost Not providing a competitive product will put downward pressure on pricing Strengths Weaknesses Opportunities Threats

Product and Business Overview Frontier’s Inflight Entertainment is unique and in demand LiveTV system Meeting the consumers needs Provides individual selections Various entertainment choices Expanding the abilities with the new VSU Long-term revenue opportunities of marketing the Frontier Experience Opportunity to use IFE as a strong marketing tool to strengthen the Frontier brand Potential to lead the industry in IFE and creature comforts

Tracking and Evaluation The plan will be benchmarked by monthly sales, market and usage reports Data to be analyzed, reviewed and reported quarterly to the progress of the plan to the V.P. and Director of Marketing and Frontier’s CFO Data received from the LiveTV system will include a detailed report that includes channel selection and viewing preferences from each individual user The three month trial analysis of feature films provided to film studios, F9 stakeholders, Dir & VP of Marketing and CFO The three month trial analysis of feature films for a fee will consist of comparative; viewer data, pricing, programming and usage. The analysis will be conducted in-house from data received from LiveTV, Frontier’s revenue accounting and Bornerman. Upon completion the analysis will be provided to film studios, F9 stakeholders, Dir & VP of Marketing and CFO

Conclusion Frontier has the opportunity to lead the industry in by providing the consumer with and important deliverable IFE will deliver: A consistent inflight experience Greater comfort Increased loyalty Opportunity for significant revenue generation