Frontier Airlines files for IPO, betting on a travel rebound - MarketWatch

Frontier Airlines files for IPO, betting on a travel rebound - MarketWatch

Denver-based Frontier Group Holdings Inc., the parent company of Frontier Airlines, has filed for an initial public offering.

The ultra low-cost airline is seeking to sell $100 million worth of shares, although that figure is often a placeholder used to calculate fees. Underwriters include Citigroup, Barclays, and Deutsche Bank. Shares would trade on the Nasdaq under the symbol FRNT.

Frontier filed for an IPO in 2017 but later withdrew plans. The offering comes on the heels of Sun Country Airlines Holdings Inc.’s in February. Sun Country is backed by private-equity giant Apollo Global Management Inc. APO, -3.56%

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The airline listed net losses of $225 million for full-year 2020, contrasting with a net income of $250 million in 2019 and $80 million in 2018. Adjusted losses for last year hit $301 million, versus an adjusted profit of $276 million in 2019.

Operating revenue fell to $1.25 billion in 2020 from $2.51 billion in 2019.

Frontier acknowledged the “significant challenges” to airlines amid pandemic restrictions and fears, but said it was set to benefit from an eventual travel rebound.

“We have worked diligently to navigate such challenges by implementing disciplined capacity deployment and taking steps to protect liquidity and cash flow,” Frontier said in its prospectus filed Monday.

The company is “well positioned to take advantage of the anticipated demand recovery as vaccine distribution continues,” it said.

Indigo Partners is Frontier’s main stockholder. Indigo is “an established and successful investor in (ultra low-cost carriers) around the world,” including Spirit Airlines and Mexico’s Volaris. Frontier’s sole codeshare agreement is with Volaris.

Airlines have seen revenues dwindle in the pandemic, relying on government assistance. In the U.S., several airlines have warned of furloughs on or after April 1, when government payroll aid expires.

The Bureau of Transportation Statistics said recently that airline employment has risen in January, with carriers in the U.S. employing 714,000 people from 614,000 people in December.