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Frontier Airlines saw its stock price rise by about 15% on Tuesday, September 3, following Spirit Airlines' announcement of a second Chapter 11 bankruptcy filing within a year. The surge marked Frontier's best trading day in over five months, according to Yahoo Finance. Deutsche Bank responded to the news by upgrading Frontier from 'hold' to 'buy,' with analysts highlighting the airline's improved competitive position.
Spirit Airlines' latest bankruptcy follows an unsuccessful reorganization attempt earlier this year and ongoing challenges with high debt and leasing costs. In its announcement, Spirit said it would reduce both its fleet size and route coverage, which is expected to decrease competition in the market. This development coincides with Frontier's planned winter expansion, much of which will overlap with routes previously operated by Spirit.
Frontier and Spirit currently share about a 35% overlap in their networks, a figure that could increase to nearly 40% after Frontier's upcoming expansion. This significant network intersection may allow Frontier to capture more market share as Spirit scales back operations.
