A Frontier Airlines plane near a Spirit Airlines plane at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.
Joe Raedle | Getty Images
Frontier Airlines is going after customers of Spirit Airlines, whose financial footing has gotten so shaky in recent weeks that it warned earlier this month it might not be able to survive another year without more cash.
Frontier on Tuesday announced 20 routes it plans to start this winter, many of them in major Spirit markets like its base at Fort Lauderdale International Airport in Florida. Frontier overlaps with Spirit on 35% of its capacity, more than any other airline, according to a Monday note from Deutsche Bank airline analyst Michael Linenberg.
Some of Frontier’s new routes from Fort Lauderdale include flights to Detroit, Houston, Chicago, and Charlotte, North Carolina. It’s also rolling out routes from Houston to New Orleans; San Pedro Sula, Honduras; and Guatemala City.
Frontier had tried and failed to merge with its budget-airline rival several times since 2022.
“I’m not here to talk about M&A,” Frontier CEO Barry Biffle said in an interview with CNBC on Tuesday when asked whether Frontier would buy Spirit.
Both carriers have struggled from changing customer tastes for more upmarket seats and trips abroad, an oversupply of domestic capacity, and higher labor and other costs. Spirit’s situation has become more dire however, after it emerged from four months of bankruptcy protection in March facing many of the same problems.
Ultra-low cost airlines are also challenged by larger rivals like United Airlines, American Airlines, Delta Air Lines that have rolled out their own no-frills basic economy tickets but also offer customers bigger choices of destinations and other perks on board like snacks and beverages.
Stock prices of rival airlines surged after Spirit’s warning earlier this month.
Biffle said the carrier wants to become the country’s largest budget airline and has rolled out loyalty matching programs to grab more customers. Frontier’s capacity was slightly smaller than Spirit’s in the second quarter, through the latter had slashed its flying by nearly 24% from a year earlier, while Frontier was down only 2%.
Spirit last week said it drew down the entire $275 million of its revolver and while it reached a two-year extension on its credit card processing agreement with U.S. Bank National Association, it agreed that it would hold back up to $3 million a day from the carrier.
— CNBC’s Phil LeBeau contributed to this report.
