Frontier’s low-cost allure
Frontier has the highest complaint rate among U.S. airlines this year, but that doesn’t bother Wall Street analysts, who rate the company higher than all other U.S. ultra-low-cost carriers.
The Denver-based airline has a fuel-efficient fleet, a thick order book for more planes, and a plan for ensuring it has enough pilots to fly them.
And if JetBlue completes its proposed acquisition of Spirit Airlines, that will leave Frontier by far the biggest budget carrier in the country — a magnet for price-conscious travelers. Frontier, known for painting animals on plane tails, made its IPO in April 2021 and held its first investor day this week. The focus, predictably, was on costs.
“The carrier continues to have a wide cost advantage over its peers and sees multiple levers to pull to widen its cost gap,” Cowen analyst Helane Becker wrote later.
Another hallmark of an ultra-low-cost-carrier is charging cheap fares and offsetting them with add-on fees. Frontier racked up $78 per a passenger in so-called ancillary revenue in the third quarter, and it aims to hit $85 next year and $100 in 2026.
That extra revenue should help Frontier close one huge gap — profit margins are still far below pre-pandemic levels.