Frontier Airlines Raises $570 Million IPO At $4 Billion Valuation

The budget carrier Frontier Airlines is expecting to raise $570 million when it starts trading on Nasdaq on Thursday (April 1), giving the Denver-based company an estimated $4 billion valuation.

The airline sold 30 million shares at $19 apiece, the low end of the target range — 15 million shares came from the company and 15 million will be sold by Frontier’s existing investors. The company is trading under the symbol ULCC, according to a press release.

Frontier anticipates receiving net proceeds of $266 million after deducting the underwriting discount and commissions and estimated offering expenses. The airline said it will not receive any proceeds from the sale of the shares by the selling stockholders.

Lead bookrunners include Citigroup, Barclays, Deutsche Bank Securities, Morgan Stanley and Evercore ISI. Additional bookrunners are BofA Securities, J.P. Morgan, Nomura, UBS Investment Bank, Cowen and Raymond James.

According to the Securities and Exchange Commission (SEC) filing, Frontier Airlines operates a fleet of 66 narrow-body Airbus A320 family aircraft. The company is planning to expand the fleet to 121, including 80 A320neo (new engine option) family aircraft, by the end of 2021. By the close of 2016, the airline served about 14.9 million passengers across a network of 59 airports.

Frontier is not the only airline to go public this year. Another budget carrier, Sun Country Airlines, filed in February, according to CNBC.

The airline industry was crippled during the COVID-19 pandemic; numerous flights were grounded worldwide as lockdowns and restrictions ensued and people worked and learned from home. One way airlines tried to make travel safer during the pandemic was by leaving one seat empty between passengers for better social distancing. Global passenger traffic dropped 67 percent last year to levels not seen since 1999.

As more people become vaccinated, the travel industry expects bookings will keep growing. The Transportation Security Administration (TSA) screened 86,000 more travelers on March 15 than on the same day in 2020. TSA screenings have topped 1 million daily since March 11.