Frontier shares climb as Spirit files for bankruptcy again amid shifting US airline landscape

Despite recent profitability in 2024, Frontier only achieved this after years of losses during and after the COVID-19 pandemic. The airline had to make substantial changes to its business model—including adjustments to its frequent flier program, new fare classes, elimination of change fees, and premium seating—to adapt to shifting U.S. market dynamics.

Frontier CEO Barry Biffle has expressed confidence in the company's strategy: "the last man standing" among U.S. budget airlines by 2026. The airline has launched dozens of new routes this year targeting key cities where Spirit operates, such as Baltimore, Detroit, and Houston.

Deutsche Bank’s upgrade signals optimism that Frontier can absorb demand displaced by Spirit while maintaining margins due to its lower cost structure and competitive fares. However, industry observers note that if Spirit succeeds in restructuring and stabilizing financially through shrinking operations, it could return as a stronger competitor against Frontier.

The broader context for U.S. budget airlines has shifted significantly since the 2010s when carriers like Spirit, Southwest, JetBlue, and Frontier posted strong growth and margins. Now the sector faces turbulence: JetBlue reported large losses in 2024; Southwest Airlines is under Elliott Investment control; and Spirit faces repeated bankruptcies.

Fleet data from Planespotters.net shows that Southwest leads with 802 aircraft followed by JetBlue (289), Spirit (195), Frontier (165), Allegiant Air (130), Sun Country (66 including freighters), Breeze Airways (54), and Avelo Airlines (22).

Frontier previously attempted to acquire Spirit in 2022 but withdrew after JetBlue made a higher offer—a deal ultimately blocked by regulators. Despite current financial difficulties, Spirit is not seeking another merger partner at this time.

As both airlines navigate uncertain futures amid industry shifts toward legacy carrier models and increased competition from larger rivals, analysts will be watching closely how these developments affect market dynamics going forward.