Colorado’s Frontier Airlines begins fresh go-around for IPO

Frontier Airlines (F9, Denver Int’l) parent Frontier Airlines Holdings has filed an S-1 registration statement outlining its interest in pursuing an Initial Public Offering (IPO). In a regulatory filing on March 8, the low-cost carrier declined to reveal the number of shares, or the price range they would be sold at, on the NASDAQ’s Global Select Market, where Frontier plans to list under the ticker FRNT. Barclays, Citigroup, Deutsche Bank Securities, Evercore ISI, and Morgan Stanley are the lead underwriters for the offering. Indigo Partners-owned Frontier Airlines first held preliminary discussions with investment banks over a possible IPO back in late 2015. It subsequently filed for one on April 1, 2017, with plans to raise about USD100 million from the offering – only to reportedly shelve the measure that July in the wake of a public spat with United Airlines (UA, Chicago O’Hare) over its business model. The Colorado-based budget carrier did not issue an official statement confirming that delay, but in July 2020 it officially declared in a filing that it had abandoned plans to hold an IPO “at this time.” According to the ch-aviation fleets advanced module, Frontier Airlines operates a fleet of three A319-100s, nineteen A320-200s, sixty A320-200N, and twenty-one A321-200s. It also has a commitment to purchase 156 additional A320neo by the end of 2028 including eighteen A321-200NX(XLR)s. Despite the pandemic-triggered crisis, which led the carrier to burn about USD2 million in cash per day on average up until December 31, Frontier Airlines said in its March 8 filing that it had implemented “disciplined capacity deployment” and protected liquidity, so that “we believe we are well positioned to take advantage of the anticipated demand recovery as vaccine distribution continues.” It elaborated that “the US airline industry has seen stronger domestic demand than international demand, and the segments of domestic travel that have recovered fastest have been VFR (visiting friends or relatives) and vacation travel (which together we refer to as leisure travel), in contrast to business travel.” These are “trends that we believe position us to outperform the airline industry as a whole.” The S-1 statement went on to say that Frontier Airlines intended to use the net proceeds from the offering “for general corporate purposes, including cash reserves, working capital, capital expenditures, including flight equipment acquisitions, sales and marketing activities and general and administrative matters, and for possible debt repayment.”