Frontier to Raise Up to $315 Million in Year’s 2nd Airline IPO

Frontier Group Holdings Inc. plans to price its initial public offering at $19 to $21 a share, raising as much as $315 million as it aims to take advantage of an expected recovery in airline travel.

The offering consists of 15 million shares to be sold by the company and 15 million by existing stockholders, Frontier said in a statement Tuesday. The shares are expected to list on the Nasdaq stock market, under the ticker symbol ULCC -- the industry’s acronym for ultra-low-cost carrier.

The sale will be the second U.S. airline IPO this year, following Sun Country Airlines Holdings Inc.’s on March 17. Through Monday, Sun Country had jumped 47% from its offering price. Frontier dropped plans for an IPO last July after the coronavirus pandemic decimated demand for air travel.

Both discount carriers are banking on a wave of leisure trips as more people are vaccinated against Covid-19 and case growth slows. Frontier also expects that more Americans will take short trips as they work outside their offices, the carrier said in a regulatory filing.

“We plan to strategically deploy our capacity where demand is highest during the recovery,” the filing said. “More broadly, after being restricted from travel, we believe many customers will take advantage of the opportunity to travel more in the coming years.”

The carrier, which operates as Frontier Airlines, is based in Denver, where it faces competition from United Airlines Holdings Inc. and Southwest Airlines Co. Frontier’s fleet of 104 jets in the Airbus SE A320 family serve 110 airports in the U.S. and other destinations in the Americas.

The carrier is led by Chief Executive Officer Barry Biffle and Chairman William Franke, who has established discount airlines including Spirit Airlines Inc. in the U.S., Mexico’s Volaris, Chile’s JetSmart Airlines SpA, Hungary’s Wizz Air Holdings Plc and Singapore’s Tiger Airways Holdings Pte. His investment firm Indigo Partners LLC acquired Frontier in December 2013.

Frontier won’t receive proceeds from the sale by existing holders, one of which intends to grant underwriters a 30-day option to buy an additional 4.5 million shares, according to the statement. The company didn’t identify the seller.

The IPO’s underwriters include Citigroup Inc., Barclays Plc, Deutsche Bank AG, Morgan Stanley and Evercore ISI.

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