Frontier is latest airline to try IPO
The pandemic is far from over, but some airlines believe the travel business is already on an upswing.
On Thursday, Frontier Airlines, a budget carrier that is based in Denver and known for putting images of wild animals on its planes, became the second airline this year to list its shares on a stock exchange. Before trading began, Frontier said it expected to raise $266 million by selling 15 million shares at $19 each on Nasdaq under the symbol ULCC, a nod to its strategy as an “ultra-low-cost carrier.” Another 15 million shares will be sold by Frontier’s existing stockholders.
On Thursday, shares in Frontier, which has a $4 billion market capitalization, closed down less than 1 percent.
Unlike the largest airlines, budget carriers do not rely on corporate or international travel, which are not expected to bounce back soon.
“The time is now,” Barry Biffle, the airline’s president and CEO, said in an interview. “If you look, the vaccine is unlocking the demand, and you’re seeing it everywhere. You’re seeing it in restaurants, you’re seeing it in hotels.”
Frontier, the last of the nation’s 10 largest airlines to go public, said it planned to use the money it raised to buy equipment, invest in sales and marketing, repay debt and shore up its cash reserves. The offering is expected to close Tuesday.
The airline earned $251 million in 2019 before losing nearly as much last year. It has about $1 billion in cash or cash equivalents and employs about 5,000 people.