Frontier airlines IPO suggests travel sector is bouncing back from pandemic losses
The Denver-based budget airline raised $570 million in an initial public offering
Frontier Airlines announced its initial public offering Thursday.
The Denver-based budget airline raised $570 million in an initial public offering, according to a Thursday announcement from its parent company Frontier Group Holdings Inc. The announcement signals a rebounding travel industry spurred by the COVID-19 vaccine, and more flight bookings industry-wide.
Frontier Airlines will trade publically under the ticker ULCC. (iStock).
Frontier announced the pricing of its IPO, of 30 million shares of common stock, at $19.00 per share. The proposed offering was led by Citigroup, Barclays, Deutsche Bank Securities, Morgan Stanley and Evercore. The company starts trading on Thursday under the stock ticker ULCC.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ULCC | FRONTIER GROUP HOLDINGS | 5.60 | +0.05 | +0.90% |
Underwriters have a 30-day option to purchase an additional 4.5 million shares of common stock from a selling shareholder, Frontier said. The airline anticipates net proceeds of $266 million and will not receive any proceeds from the sale of the 15 million shares by the selling stockholders.
FRONTIER AIRLINES FILES FOR IPO AS TRAVEL INDUSTRY GEARS UP FOR REBOUND
Frontier last filed for an IPO in 2017, but later withdrew. It reported $225 million in losses for 2020 on $1.25 billion in revenue, compared with a net income of $251 million on $2.5 billion in sales in 2019, according to its regulatory filing.
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The airline’s IPO comes as more budget airlines focus on recovering from devastating revenue losses in 2020. Minneapolis-based low-cost air carrier Sun Country Airlines on earlier this month also launched an IPO to raise around $200 million, according to regulatory filings.