Fron­tier said to de­lay IPO as ri­valry with United heats up

The Denver Post - - BUSINESS - By Bloomberg News

Fron­tier Air­lines pushed back its ini­tial pub­lic of­fer­ing, people fa­mil­iar with the mat­ter said, as com­pet­i­tive ten­sions flared be­tween the nofrills car­rier and United Air­lines.

The share sale could slip un­til Septem­ber or later, said the people, who asked not to be iden­ti­fied be­cause the mat­ter is pri­vate. Fron­tier Group Hold­ings Inc., which is backed by pri­vate equity firm Indigo Part­ners, had been plan­ning to hold the IPO as soon as the sec­ond quar­ter, people fa­mil­iar with the mat­ter said in March.

The de­lay comes as Fron­tier pre­pares to more than dou­ble routes — an ex­pan­sion that drew a warn­ing from United Pres­i­dent Scott Kirby. He vowed to stave off any at­tempt by Fron­tier to grab a big­ger share of the Den­ver mar­ket. The dis­count car­rier is based in the city, which is the most prof­itable hub for United, the third­biggest air­line in the U.S.

Fron­tier on Tues­day de­tailed plans to add 21 cities to its net­work and more than dou­ble to­tal routes by mid-2018, while of­fer­ing lim­it­ed­time fares for as low as $39.

On Wed­nes­day, Kirby said the ex­pan­sion means that Fron­tier is mov­ing to­ward a net­work more like United’s, with con­nect­ing flights through ma­jor air­ports in­stead of fo­cus­ing on the point-to-point ser­vice typ­i­cally fa­vored by low-cost car­ri­ers.

“They’re now com­pet­ing on our turf and try­ing to be a net­work car­rier in Den­ver,” Kirby said in a con­fer­ence call af­ter United re­ported its earn­ings. “That is a bat­tle I guar­an­tee United will win.”

Fron­tier al­ready of­fers con­nect­ing flights over Den­ver, so there’s no change in its busi­ness strat­egy, said Jim Faulkner, a spokesman for the car­rier. Com­pe­ti­tion from such dis­coun­ters prompted United, Delta Air Lines Inc. and Amer­i­can Air­lines Group Inc. to of­fer a ba­sic econ­omy fare that doesn’t come with the nor­mal ameni­ties of a coach ticket.

“Kirby’s state­ment sim­ply isn’t true,” Faulkner said.

Fron­tier in March filed for a U.S. IPO of $100 mil­lion, a place­holder amount sub­ject that typ­i­cally changes and is used to cal­cu­late fees. Fron­tier and Indigo Part­ners, which ac­quired the car­rier in December 2013, plan to sell shares in the of­fer­ing.

Rep­re­sen­ta­tives for Fron­tier and Indigo de­clined to com­ment about de­lay­ing the IPO.

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