Frontier Airlines Doubles Down on Low-Cost Travel While Rivals Chase Premium Flyers

Frontier Airlines is sticking with its budget-friendly approach to attract cost-conscious travelers, even as most major airlines focus on premium passengers. The carrier's new CEO says the strategy will help them capture market share after competitor Spirit Airlines filed for bankruptcy twice.

While major airlines chase after big-spending travelers, Frontier Airlines is taking a different approach by betting on budget-conscious passengers who are watching their wallets more carefully.

The airline’s newly appointed CEO James Dempsey shared with Reuters that concentrating on lower fares and encouraging travel during slower periods remains a viable approach for 2026. This strategy aims to grab customers previously served by Spirit Airlines, which entered bankruptcy protection for the second time in August 2025.

After taking over as CEO in January following the sudden exit of former chief executive Barry Biffle, Dempsey addressed recent media speculation about Frontier’s future. Reports had surfaced suggesting passengers couldn’t reserve flights beyond April, raising concerns about potential bankruptcy.

“They are categorically untrue,” Dempsey stated regarding the bankruptcy speculation. He explained that booking limitations were actually the result of schedule restructuring in preparation for spring and summer seasons. “We are very focused on the go-forward plan on Frontier and right-sizing our fleet,” he added. “It puts us in a very strong position to bring the airline back to profitability.”

However, Wall Street remains doubtful about the carrier’s strategy of returning to its traditional high-utilization approach, where airlines maximize aircraft usage to spread operational expenses across more flights and reduce per-unit costs. Frontier’s stock has plummeted 19% over five days and dropped 44% during the past year.

“We offer value to customers at fares that enable people to travel who would not otherwise travel,” Dempsey explained. “We think that the model is phenomenally beneficial to consumers.”

Aviation industry experts note that this high-utilization strategy has faced difficulties since the pandemic began, as operational expenses have increased while established airlines have moved into discount carriers’ territory. Should demand for budget travel weaken, Frontier could see deeper financial losses under growing investor scrutiny.

JP Morgan equity analyst Jamie Baker wrote in a research report: “Frontier’s deeply negative margins are second only to Spirit’s, and remain among the worst peacetime margins we’ve ever witnessed.”

These difficulties have sparked industry discussions about potential consolidation, including possible partnerships between Frontier and Spirit.

CHALLENGING CONDITIONS

Baker’s estimates show Frontier’s fourth-quarter earnings dropped 9.6% when excluding profits from sale-leaseback deals, while costs per available seat mile without fuel increased 7% compared to the previous year. A company representative attributed higher expenses in 2025 to reduced aircraft utilization.

Data analytics company Cirium reported that Frontier expanded seating capacity by 18% at the start of 2024. However, the airline operated 3.5% fewer seats in 2025 versus 2024 due to weakened demand conditions.

Speaking after the February 11 quarterly earnings report, Dempsey expressed optimism about recent demand improvements as the company enhances its loyalty program and Spirit withdraws from competing markets.

Frontier reported a 10% increase in revenue per available seat mile during the current quarter, suggesting stronger pricing capabilities.

“It’s a testament to some of the changes that we’ve made around disciplined pricing and giving customers clarity and transparency around what they’re purchasing,” Dempsey noted.

Despite focusing on budget travelers, the airline still pursues higher-paying customers through plans to launch first-class seating later this year and install Wi-Fi service by the end of 2027.

“We’re very focused on having a diversified product in the cabin,” he said. “You’ve seen post-COVID the change in customers’ appetites to pay for premium products.”

Following the pandemic’s end, numerous U.S. carriers including Delta Air, United Airlines, and American Airlines have emphasized luxury travel to boost profits and minimize exposure to economic fluctuations.

Dempsey announced Frontier’s intentions to shrink its fleet size while pursuing $200 million in yearly cost reductions by 2027 to improve operational performance. According to Cirium data, Frontier ranked at the bottom among 10 North American airlines for on-time performance in 2025.

SPIRIT NEGOTIATIONS

Merger discussions between Spirit and Frontier have continued since 2022 without reaching a final deal. Dempsey refused to comment on whether negotiations remain active.

During Spirit’s initial Chapter 11 bankruptcy process, the airline turned down multiple Frontier proposals in early 2025, including a $2.16 billion bid. After Spirit’s second bankruptcy filing in August 2025, Frontier submitted another offer that sources described to Reuters as unfeasible.

“We look at opportunities as they arise, and we’ll be disciplined in how we assess those opportunities,” Dempsey said. “If it’s favorable to Frontier, we would pursue it.”

In January, smaller airlines Sun Country and Allegiant revealed merger plans, as post-pandemic changes in pricing dynamics have highlighted weaknesses among low-cost carriers.

Jeff Potter, who served as Frontier’s CEO from 2002 to 2007, commented: “Sun Country and Allegiant make business sense, and I’m not sure that same box is checked when you look at a Frontier-Spirit.”

“You have two companies that for lack of better terms are finding their way through some financial challenges and I don’t think that improves if there were a combination now,” Potter added.