Frontier Airlines goes after Spirit Airlines’ routes

Frontier Airlines goes after customers of Spirit Airlines, whose financial footing has gotten so shaky in recent weeks that it warned earlier this month it may not give you the chance to survive one other 12 months without additional cash.

Frontier on Tuesday announced 20 routes it plans to begin this winter, a lot of them in major Spirit markets like its base at Fort Lauderdale International Airport in Florida. Frontier overlaps with Spirit on 35% of its capability, greater than another airline, based on a Monday note from Deutsche Bank airline analyst Michael Linenberg.

A few of Frontier’s latest routes from Fort Lauderdale include flights to Detroit, Houston, Chicago and Charlotte, North Carolina. It is also rolling out routes from Houston to Recent Orleans; San Pedro Sula, Honduras; and Guatemala City.

Frontier had tried and didn’t merge with its budget airline rival several times since 2022.

“I’m not here to speak about M&A,” Frontier CEO Barry Biffle said in an interview with CNBC on Tuesday when asked whether Frontier would buy Spirit. Biffle said he expects that Frontier would pick up nearly all of Spirit’s market share if Spirit collapsed.

Each carriers have struggled from changing customer tastes for more upmarket seats and trips abroad, an oversupply of domestic capability, and better labor and other costs. Spirit’s situation has grow to be more dire nonetheless, after it emerged from 4 months of bankruptcy protection in March facing most of the same problems.

Ultra-low-cost airlines are also challenged by larger rivals like United Airlines, American Airline and Delta Air Lines which have rolled out their very own no-frills basic economy tickets but additionally offer customers larger selections of destinations and other perks onboard like snacks and beverages.

Stock prices of rival airlines surged after Spirit’s warning earlier this month.

Biffle said the carrier desires to grow to be the country’s largest budget airline and has rolled out loyalty matching programs to grab more customers. Frontier’s capability was barely smaller than Spirit’s within the second quarter, through the latter had slashed its flying by nearly 24% from a 12 months earlier, while Frontier was down only 2%.

Spirit last week said it drew down the complete $275 million of its revolver and while it reached a two-year extension on its bank card processing agreement with U.S. Bank N.A., it agreed that it will hold back as much as $3 million a day from the carrier.

The airline lost $245.8 million within the second quarter. Frontier lost $70 million.

Spirit has been searching for ways to slash costs, including furloughing and demoting lots of more pilots and cutting unprofitable routes. A whole lot of flight attendants are on unpaid leaves of absence.

Spirit CEO Dave Davis said in an Aug. 12 staff memo after its “going concern” warning that “the team and I are confident that we are able to construct a Spirit that can proceed to supply consumers the unrivaled value that they’ve come to expect for a few years to come back.”

The carrier reached a take care of bondholders who agreed to convert debt to equity in its Chapter 11 bankruptcy, but it surely didn’t cut other costs like renegotiating aircraft leases. Leasing firms have been reaching out to rivals in recent weeks to gauge whether competitors would take any of the Airbus planes which might be in Spirit’s hands, based on people acquainted with the matter, who asked to talk anonymously since the talks were private.

— CNBC’s Phil LeBeau contributed to this report.