Over the past several years, we’ve seen the ultra low cost carrier business model in the United States under immense stress. With costs going up and the legacy carriers better competing, they’ve found themselves in a really challenging situation. Obviously Spirit Airlines is in the worst position, but Frontier Airlines isn’t exactly doing great either. Along those lines, there’s an interesting development on that front.
In this post:
Frontier returns, defers, and sells planes, to improve financials
Before we get into the details, let me mention that Frontier currently has a fleet of around 160 Airbus A320-family aircraft, with a similar number of planes on order. The airline operates the A320ceo, A321ceo, A320neo, and A321neo, with the general idea being that the new planes (neos) replace the old planes (ceos).
However, that’s not exactly how things are playing out, as the airline is significantly shrinking its planned fleet of new generation aircraft. Specifically:
- Frontier will return 24 leased A320neos to AerCap early, and they’ll leave the fleet in the second quarter of 2026; these are planes that were on lease for anywhere from two to eight additional years
- For deliveries in 2028 and 2029, AerCap has agreed to 10 future sale-leaseback transactions; in other words, this helps Frontier’s short term financial situation, but the airline will pay for it in the long run
- Frontier is deferring 69 A320neo and A321neo deliveries; the planes were supposed to be delivered in 2027 through 2030, but will instead be delivered in 2031 through 2033
Frontier very much seems like it’s in a “screwed if you do, screwed if you don’t” situation. The airline is losing money, and one way to reduce losses is to make the fleet smaller, and focus on the most profitable routes.
At the same time, the entire ultra low cost carrier business model is reliant on growth and scale to keep unit costs down. When an airline shrinks, unit costs typically go way up, in terms of economies of scale, and also in terms of labor costs (since the most junior employees, who are paid the least, typically get furloughed).
Presumably this means there’s no Spirit deal, unsurprisingly
We know that Spirit Airlines is obviously in a very rough financial situation, as it’s currently in Chapter 11 bankruptcy for the second time in around a year. Spirit continues to lose lots of money, and seems to be on the verge of liquidation, or something.
For a long time, there has been talk of Frontier and Spirit merging. Keep in mind that before JetBlue swooped in and tried to buy Spirit, that was the plan. But ever since, we’ve seen repeated discussions take place between the airlines, with the idea being that Frontier could sort of become the “dominant” ultra low cost carrier in the country.
Presumably with Frontier looking to shrink significantly, it’s also less likely that it would try to acquire Spirit (or whatever is left of it), given that one of the main points of acquiring Spirit would be to enable growth, in order to drive down unit costs. Now, Frontier could still come in with a much smaller fleet and try to take over some of Spirit’s more profitable routes, but I imagine that’s about it, at this point.
Bottom line
Frontier Airlines plans to considerably shrink its fleet, as the airline will be returning 24 leased aircraft early, while deferring delivery of 69 aircraft. Ultra low cost carriers have had a tough time, and while the business model is usually reliant on growth, that’s hard to do when that growth isn’t profitable.
We’ll see how this all plays out, especially with Spirit also being in such a rough situation.
What do you make of Frontier’s plans to shirnk?
By the way, the stock symbol for Frontier Airlines is ULCC!
I've been pleasantly surprised by Frontier. I have flownSpirit as well, never seen a fight on either one. The usual problem is a lot of people who have never flown before, so people will get up when the plane is rolling down the runway, or just after landing when the plane rolls to a stop, it's pretty hilarious. And on both airlines, everybody applauds when the plane lands.
I'm flying Frontier everywhere I can for...
I've been pleasantly surprised by Frontier. I have flownSpirit as well, never seen a fight on either one. The usual problem is a lot of people who have never flown before, so people will get up when the plane is rolling down the runway, or just after landing when the plane rolls to a stop, it's pretty hilarious. And on both airlines, everybody applauds when the plane lands.
I'm flying Frontier everywhere I can for now. I have the GoWild pass and I've flown to LA, Las Vegas, Dallas, Miami and Atlanta for 15 bucks, and I'm looking forward to flying to St Maarten, El Salvador and Puerto Rico for 38 bucks. I get to bring a carry-on bag and would also be allowed two checked bags for free but I never check a bag, and I can bring a companion free (on regular fares) and my cat free. I can have any seat on the plane for free including Upfront Plus where the middle seat is blocked.
And the planes all seem to be really new.
it seems like low-cost / low-quality isn't working out well in today's market. Though the size of the fleet is really pretty huge for a ULCC. They should have taken a page from foreign ULCC (keep fleet costs down with robustly scheduled smaller fleet and older airframes).
it seems like low-cost / low-quality isn't working out well in today's market. Though the size of the fleet is really pretty huge for a ULCC. They should have taken a page from foreign ULCC (keep fleet costs down with robustly scheduled smaller fleet and older airframes).
The question is who will pickup the planes and delivery slots? Both are in high demand.
“the entire ultra low cost carrier business model is reliant on growth and scale to keep unit costs down.” And that’s the problem. These types of airlines can’t depend on becoming wildly popular in whatever markets they decide to enter. This problem is largely created and exacerbated by shareholder (unrealistic) demands.
Even jet blue whom at one time actually had a competitive and pleasant (and profitable!) model succumbed to catering to greed and now...
“the entire ultra low cost carrier business model is reliant on growth and scale to keep unit costs down.” And that’s the problem. These types of airlines can’t depend on becoming wildly popular in whatever markets they decide to enter. This problem is largely created and exacerbated by shareholder (unrealistic) demands.
Even jet blue whom at one time actually had a competitive and pleasant (and profitable!) model succumbed to catering to greed and now they’re about to be out of business.
the end of the ULCC model came when the legacy carriers - led by DL well before covid - started matching ultra low cost fares. No sane person is going to choose a lower cost carrier when they can get more flights to choose from with more service on a larger carrier at the same price or a small premium.
DL, again, put the nail in the ULCC model by significantly raising salaries post covid....
the end of the ULCC model came when the legacy carriers - led by DL well before covid - started matching ultra low cost fares. No sane person is going to choose a lower cost carrier when they can get more flights to choose from with more service on a larger carrier at the same price or a small premium.
DL, again, put the nail in the ULCC model by significantly raising salaries post covid. Most other carriers - UA excepted - have had to match. As part of NK's current bankruptcy, they cut pilot costs (among other labor groups) and to no surprise, pilots are leaving.
The story is same on a different scale for B6. B6 was larger in the domestic market at JFK but DL had more overall flights because of its larger international operation - on widebodies. DL is now about 20% larger than B6 at JFK overall. DL, of course, also has a large operation at LGA where B6 has a minimal presence. Even though AA is a healthy #2 at LGA, they are half the size of B6 at JFK and only 40% the size of DL.
And DL and even AA have figured out how to operate reasonably reliably in the NE where B6 has continually struggled.
it isn't about greed. It is about executing very well (or not) in very competitive markets. B6 has been all over the board strategically while failing to deliver on its core premise.
and it is also worth noting that F9 overlaps the most with UA - different from most of the rest of the low cost and low cost industry other than WN which overlaps the most with DL.
If UA is half as aggressive with F9 as it has been (and is being) with AA, F9 is finished.
TD, "Led by DL well before covid - started matching ultra low cost fares...DL, again, put the nail in the ULCC model by significantly raising salaries post covid...it isn't about greed. It is about executing very well (or not) in very competitive markets...The ULCC model in the US is officially dead. The remaining gasps from NK and F9 are just spasmatic reflexes."
Abusive?
Except if you look at the "basic economy" fares of the big 3, they are significantly higher than the ULCC fares. I recently had to fly to Atlanta. Delta was close to $200 each way in Basic while Frontier was $29 each way.
$29 isn't making anyone money and incidentals aren't going to take the total fare high enough.
All of the big 4 price relative to the competition. DL simply does not need to match ULCCs dollar for dollar.
And the actual price you pay is a function of the filed price and the availability of seats at the cheapest prices. It is doubtful that DL is $180 higher than ULCC on every flight in...
$29 isn't making anyone money and incidentals aren't going to take the total fare high enough.
All of the big 4 price relative to the competition. DL simply does not need to match ULCCs dollar for dollar.
And the actual price you pay is a function of the filed price and the availability of seats at the cheapest prices. It is doubtful that DL is $180 higher than ULCC on every flight in that market.
It is abusive, rebel, to dump capacity into markets in order to drive competitors out of business. Matching fares esp. on a very selective basis is what rational, profit motivated businesses do all the time.
Both ULCCs are trying to be more of a LCC and time will tell if that works. Frontier I believe returns most planes and crews to a base to avoid crew overnight expenses and that probably limits aircraft utilization.
Of course there is never any shortage of alleged "airline experts" claiming you can have PanAm Clipper Services at Frontier Airline fares.
We should welcome F9's attempt to introduce recliners up-front (like Spirit), which are superior to mere extra legroom or blocked-middle. More competition in these market segments is good for all.
As for experts, George, c'mon, you frequent a bunch of travel blogs offering pithy right-of-center 'hot takes' all the time... are you paid by the syllable, or just doing this for the love-of-the-game, like the rest of us?
wow.. the pot calling the kettle black.
and I agree that companies including the ULCC sector should evolve.
The fact that NK and F9 are trying to push themselves "up" to being more like LCCs rather than ULCCs shows that the ULCC model is dead in the US on top of the losses and capacity cuts.
F9, NK, and B6 are headed toward liquidation or asset sales. These airlines can't survive as independent carriers.
I donno, that's a bit harsh; 'shrink' and reduce debt/operating costs isn't a sign of chapter 7, more 'restructuring' (11), which can still survive. The 'cancer' is the economic downturn we're all living through, which, ironically, should make LCCs more profitable; instead, the poor are just not traveling anymore, and the wealthy want ultra-premium, so, the middle is dying, sadly.
No. The cancer is shareholders demanding ULCC carriers like frontier and even LCC like jet blue be something they’re not.
Frontier is by far the worst airline I have ever flown on. Once was enough!
They are globally known as the airline to avoid when in the USA. I've flown Spirit three times, and each flight was lovely!. Great Big seat, lovely staff and FA's.
Frontier did this to themselves.
Jordan, no, let's be clear, Spirit gets the bad-attention (it's the butt of all the jokes on SNL, not Frontier); in fact, few ever really think of Frontier, except for the cute animals on their tails of their aircraft. Yes, Spirit is doing the Big Front Seat right; and it seems F9 is copying them in that, by installing some recliners in-front soon as well. All said, reliability is a serious issue with F9; frequent...
Jordan, no, let's be clear, Spirit gets the bad-attention (it's the butt of all the jokes on SNL, not Frontier); in fact, few ever really think of Frontier, except for the cute animals on their tails of their aircraft. Yes, Spirit is doing the Big Front Seat right; and it seems F9 is copying them in that, by installing some recliners in-front soon as well. All said, reliability is a serious issue with F9; frequent excessive delays. Been a while since I've flown with them, but, I do remember that disappointment. At least the fares are still relatively cheap on both NK and F9. Not WN; ever since hedge funds got involved, their prices skyrocketed (an LCC pretending to be a legacy carrier).
Both known globally for different reasons :-)
Spirit gets the negative press for the fighting...has seemed to calm down of late.
Frontier is known globally by travelers as the airline to avoid for the awful seats, lack of customer service, and deceptive behaviour.
Aside from the scale down, when you can't contact your carrier because there is no phone number, you can't maintain a client base. They don't give a s- - t about their customers .
Isn't it possible that both Spirit and Frontier are morphing into LCCs - without the "U"? I heard Scott Kirby opine that the LCC model could work in this environment.
Rhetorical question: Why do so many "armchair CEOs" seem to think that every airline has to have exactly the same business model?
The headline and article is horseshit. New deliveries will offset the 24 lease returns. These AerCap CFMI LEAP powered A320NEOS will snapped up very quickly by the market, they are in high demand.
Eskimo, your response was very well written until you had to come in and act like a small immature child with your obvious stupid vulgar comments. Grow up dude.
thank you.
and yet the fact is that NK and F9 are both shrinking and they are losing money.
All of the other blabber doesn't change that reality.
funny how he is such a proponent of automating so much but doesn't realize that he is the FIRST thing that needs to be automated out of existence.
Boohoo, "Joe Smith", better known as Tim Dunn. Shut up.
I don't deserve any credit because the fake chatGPEskimo forgot to change user names.
I would never ask Tim to shut up.
His word is the source of all entertainment for us and clicks for Ben. Never shut up Tim, keep taking the bait. The village without the idiot wouldn't be complete. Just look at all the fun gone at a.net without Tim.
Tell me you don’t read or understand the delivery details without telling me. F9 isn’t shrinking at all, 10% growth, at the low end, for next decade.
This article comes off as a bit extreme when it says that Frontier will "shrink massively"- it literally says in the CFO's prepared remarks that they'll end 2026 with a net zero change in fleet size, as they have 24 inductions planned to offset the 24 retirements.
glad you covered this as one of the last solvent airline 2025 and 4th quarter financial reports.
The ULCC model in the US is officially dead. The remaining gasps from NK and F9 are just spasmatic reflexes.
Allegiant and Sun Country will try to make it work but you can't hold your breath for them.
The real question will be what routes F9 cuts; UA has talked incessantly about putting the ULCCs out of business...
glad you covered this as one of the last solvent airline 2025 and 4th quarter financial reports.
The ULCC model in the US is officially dead. The remaining gasps from NK and F9 are just spasmatic reflexes.
Allegiant and Sun Country will try to make it work but you can't hold your breath for them.
The real question will be what routes F9 cuts; UA has talked incessantly about putting the ULCCs out of business and UA does have the biggest overlap with F9.
DL is benefitting the most from the capacity reductions at NK on top of B6' capacity reductions.
between F9 and NK, AA and WN should also see yield improvement.
The demise of the ULCCs makes it all the more urgent for AA to turn itself around; WN is doing it and when only one of the big 4 is weak, the dynamics are very different than when 2 of the 4 were healthy.
Oh please, spare us the melodramatic obituary for the ULCC model. Your entire post crumbles under truth, logic, and common sense, and it's honestly embarrassing to watch.
Here's a guy who is a total know-nothing fool, speaking of things he knows zero about, confidently declaring the ULCC model "officially dead" based on Frontier's fleet adjustments and Spirit's well-documented struggles. Frontier just reported Q4 2025 results, swung to a profit, and outlined a deliberate rightsizing plan,...
Oh please, spare us the melodramatic obituary for the ULCC model. Your entire post crumbles under truth, logic, and common sense, and it's honestly embarrassing to watch.
Here's a guy who is a total know-nothing fool, speaking of things he knows zero about, confidently declaring the ULCC model "officially dead" based on Frontier's fleet adjustments and Spirit's well-documented struggles. Frontier just reported Q4 2025 results, swung to a profit, and outlined a deliberate rightsizing plan, returning 24 leased A320neos in Q2 2026, deferring 69 deliveries to spread growth more sustainably at approx 10% annually long-term, and securing cost savings projected at approx. $200 million by 2027. That's not "massive shrinkage" signaling death but it's a calculated move to stop bleeding cash, focus on profitable routes, and stabilize after years of aggressive over-expansion in a tough environment. The ULCC model isn't collapsing, it's adapting because blind growth-for-growth's-sake stopped working when costs spiked and legacies got their act together on pricing.
And Spirit? Yes, they're in a rough spot in their second Chapter 11 filing, fleet rejections, ongoing restructuring, but that's one carrier's disaster, not proof the entire model is "just spasmodic reflexes." Meanwhile, Allegiant and Sun Country are merging into a stronger leisure-focused player with complementary networks, lower utilization, and heavy ancillary reliance and hardly the actions of companies gasping their last breaths. Their strategy has always differed from the high-density, high-utilization Frontier/Spirit approach, and the market is rewarding that difference with consolidation rather than extinction.
Your fantasy about United "putting the ULCCs out of business" is just that a fantasy. UA talks big, but overlap alone doesn't kill competitors; profitable execution does. Frontier and the others aren't vanishing; they're recalibrating. Delta benefiting from NK and B6 capacity cuts? Suck my testicles. AA and WN seeing yield help? Probably. But that's normal competitive dynamics, not the grand funeral of an entire segment.
The real urgency isn't for AA to "turn itself around" because the ULCCs are supposedly dead, it's for people to stop peddling this pathetic, over-the-top doomsaying every time a ULCC makes a necessary adjustment. The model isn't dead, your analysis is just intellectually bankrupt. Try reading the actual earnings releases and fleet announcements instead of jumping to apocalyptic conclusions. Pathetic.
Amen...
Shut up Tim. You're embarrassing yourself, once again.
It’s worth noting that presently, Frontier’s utilization of their fleet is awful. Some planes sit on the ground for days at a time between flights. I think this is more about running a similar sized operation with better efficiency, because their current network can definitely be operated by ~30 fewer aircraft.
Yep, and the fleet section Lucky is referring to even says that they plan 10% annual capacity growth in the coming years. Their fleet utilization last quarter was something like 9 hours which is insanely low for a ULCC.
Not sure why the headline is that they will "shrink massively" when they very clearly are not.
NINE HOURS? Good grief, even easyJet manages more than that, let alone FR or W6.