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?
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.
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.
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.