Frontier Airlines Targets Customers Of Cash-Strapped Spirit Airlines With 20 New Routes: Report

Frontier Group Holdings Inc. (ULCC) is reportedly aiming to capture the customers of its budget rival Spirit Aviation Holdings Inc. (FLYY) as the company announced new routes on Tuesday.

According to a CNBC report, Frontier Airlines announced plans to start operating on 20 new routes this winter. Many of these routes coincide with major Spirit markets, such as the struggling carrier’s base at Fort Lauderdale International Airport in Florida, the report added.

Frontier’s shares were up nearly 2% in Tuesday’s pre-market trade, while Spirit’s shares rose nearly 3%. Retail sentiment on Stocktwits around Frontier was in the ‘neutral’ territory, while users felt ‘bullish’ about Spirit.

According to the report, which cited a note from Deutsche Bank analyst Michael Linenberg, Frontier has the highest overlap with Spirit than with any other airline, at 35% of its capacity. Some of the routes announced by Frontier from Fort Lauderdale include services to Charlotte, Detroit, Chicago, and Houston.

In an interview with CNBC on Tuesday, Frontier CEO Barry Biffle declined to answer if the carrier is looking to acquire Spirit once again, but noted that the airline is aiming for the top rank in the low-cost segment. The Denver, Colorado-headquartered airline has tried and failed multiple times in the past to acquire Spirit. 

Spirit is currently staring at the prospect of a shutdown if its financials don’t improve. “Management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” the airline’s latest quarterly report filed earlier this month stated.

The low-cost carrier highlighted adverse market conditions, elevated domestic capacity, and weak demand, resulting in a challenging pricing environment.

ULCC stock is down 39% year-to-date, while the FLYY stock has tumbled over 84% in this period.

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