Frontier Airlines Prospects Rise With JetBlue-Spirit Deal

Frontier Airlines CEO Barry Biffle thinks his airline’s outlook is better than ever after JetBlue Airways beat it in a bidding war for budget competitor Spirit Airlines.

“Ninety-five percent of U.S. capacity will be 30 to 80 percent higher cost than us,” Biffle said in an interview Thursday. One of his main focuses at Frontier is using low costs as a competitive advantage and, by JetBlue buying Spirit and bringing it up to the former’s cost levels, many see the deal as an elimination of Frontier’s main low-cost competitor in the U.S.

Airlines compare their expenses using the metric unit costs — measured by costs per available seat mile — excluding fuel. In the second quarter, Frontier’s unit costs excluding fuel were 7.24 cents, Spirit’s were 6.96 cents, and JetBlue’s were 9.68 cents. Put another way, JetBlue’s costs are 33 percent higher than those at Frontier. The combination of JetBlue and Spirit will leave Frontier as one of the only airlines serving major markets with very low costs in the U.S.

Asked about potential cost pressure from new pilot pay deals at certain U.S. regional airlines, Biffle was unconcerned and said Frontier can offer cockpit crew members better pay over their career, as well as a better work-life balance than the regionals can. Frontier, he added, is in “good shape” when it comes to a supply of pilots.

With low costs in mind, Frontier is moving ahead with aggressive expansion plans. The airline intends to grow capacity by double digits annually through the end of the decade, Biffle said. Frontier aims to triple in size by 2030.