Over the past few years, the market for affordable, bargain-friendly airlines have really taken off as budget-minded travelers gain more access to the air.
Within that market, names like Southwest (LUV) and Spirit Airlines (SAVE) have been growing in popularity, especially among younger — millennial and gen z — generations of domestic jet setters, while business travelers tend to still favor longtime staples, American (AAL) or Delta (DAL).
But in this growing class of budget-friendly airlines has emerged another name that’s hoping to capitalize on the industry’s recovery with its upcoming IPO.
Founded in 1994, Frontier Airlines is a lost-cost airline on par with Spirit, which is looking to make the move to Wall Street, making it the second airline to go public this year, after Sun County Airlines (SNCY).
Eyeing up a March 31 IPO, Frontier will trade under the ticker symbol “ULCC,” at a price range of $19-$21 per share. The company cites heightened profitability margins resulting from its competitively low fares, as a springboard to its IPO.
The move comes at a time that could put many investors on the fence, as it’s hard to truly measure the reality of the Frontier’s financial situation amid pandemic-era traveling. For context, the company’s total operating revenues shrunk by 50% in 2020 compared to 2019. Meanwhile, the losses took a stronghold and corporate shares ultimately diluted.
Investors will need to proceed with caution and balance the airline’s performance prior to the COVID-19 pandemic with its ongoing COVID-19 recovery.