(Reuters) – U.S. low-cost airlines Frontier and Sun Country plan to raise cash through initial public offerings (IPOs) as they prepare for a rebound in pandemic-hit travel.
Budget carriers are expected to bounce back quicker than larger rivals from the pandemic thanks to their lower-cost structures and focus on domestic leisure travel.
Frontier Airlines, which withdrew listing plans in July, filed again on Monday, after Apollo Global Management-backed Sun Country Airlines launched an IPO to raise around $200 million, regulatory filings show.
In its IPO filing, Denver, Colorado-based Frontier said that it was “well positioned to take advantage of the anticipated demand recovery as vaccine distribution continues.”
Nearly 1.3 million people were screened at U.S. airports on Sunday, Transportation Security Administration data showed, the second-highest day in 2021 but down 40% from pre-COVID levels.
Frontier, which is owned by private equity firm Indigo Partners, is among a few U.S. airlines that have announced plans to resume hiring pilots.
It flies to more than 100 destinations in the United States, Mexico and the Caribbean and operates 100-plus Airbus A320 family aircraft.
The airline posted a net loss of $225 million for the year ended Dec. 31, 2020, hurt primarily by a sharp decline in demand due to the pandemic.
Citigroup, Barclays, Deutsche Bank Securities, Morgan Stanley and Evercore ISI are the lead underwriters for Frontier’s offering.
Meanwhile, Minnesota-based Sun Country, which first announced its IPO last month, expects to list around 9 million shares of its common stock at $21.00 to $23.00 per share.
The U.S. airline industry is also preparing for the arrival this year of newcomer Breeze Airways, a start-up by David Neeleman, the entrepreneur behind JetBlue Airways, Canada’s WestJet and Azul Brazilian Airlines.
SOURCE Reuters
