Frontier Airlines is aggressively targeting Spirit Airlines’ customer base as Spirit struggles to stay afloat. Spirit recently warned it may not survive another year without new funding, prompting rivals to prepare for potential market share opportunities. Frontier has announced 20 new routes for this winter, many overlapping with Spirit’s key markets, including its hub at Fort Lauderdale International Airport.
Frontier’s Expansion Strategy
Frontier CEO Barry Biffle unveiled new routes from Fort Lauderdale to major U.S. cities such as Detroit, Houston, Chicago, and Charlotte, North Carolina. Additional routes include Houston to New Orleans, San Pedro Sula in Honduras, and Guatemala City. Deutsche Bank analyst Michael Linenberg noted that Frontier overlaps with Spirit on 35% of its capacity, more than any other airline. Biffle declined to discuss mergers but said he expects Frontier would capture most of Spirit’s market share if the carrier collapses.
Challenges for Ultra-Low-Cost Airlines
Both Spirit and Frontier have struggled with shifting consumer preferences toward more premium travel, increased labor costs, and an oversupply of domestic capacity. Larger carriers like United, Delta, and American have compounded the pressure by offering low-cost economy tickets alongside broader perks and international options. Spirit’s situation is more dire, having exited bankruptcy protection in March without addressing fundamental challenges such as costly aircraft leases.
Spirit’s Financial Strain
Spirit reported a $245.8 million loss in the second quarter, compared to Frontier’s $70 million loss. The airline has drawn down its full $275 million credit revolver and extended its U.S. Bank credit card processing deal, though the agreement withholds up to $3 million a day. Spirit is also cutting costs by furloughing pilots, reducing routes, and placing flight attendants on unpaid leave. Despite these measures, concerns remain about its long-term viability, as lessors explore shifting Spirit’s Airbus aircraft to competitors.
Market Implications
Airline stocks surged after Spirit’s warning earlier this month, reflecting expectations that competitors may benefit from its struggles. Frontier, now close in size to Spirit after the latter slashed flying by nearly 24% year-over-year, sees an opportunity to become the largest budget airline in the U.S. Its loyalty program expansion is part of efforts to attract displaced Spirit customers. Meanwhile, Spirit CEO Dave Davis has expressed confidence in the airline’s future, promising to continue offering “unmatched value” despite mounting challenges.
Frontier’s expansion underscores the shifting dynamics in the ultra-low-cost airline sector as Spirit faces mounting financial pressure. With competitors preparing to absorb Spirit’s market share, the coming months could determine whether Spirit can stabilize or whether Frontier and larger rivals will reshape the budget travel landscape in the U.S.
