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Frontier Airlines Nears IPO, Files Papers with SEC
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Putting all speculation to rest, Frontier Airlines has finally filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to launch its initial public offering (IPO). Although, the Denver, CO-based ultra-low-cost carrier disclosed nothing regarding the proceeds from the transaction, it is reportedly aiming to make its trading debut, under the symbol ‘FRNT,’ in the current quarter itself.
Carrier Overcomes Bankruptcy Woes
In fact, Frontier Airlines had filed for bankruptcy protection in 2008. In the following year, the carrier was purchased by Republic Airways Holdings. Interestingly, Indigo Partners bought Frontier Airlines from Republic Airways in 2013.
Frontier Airlines operates in excess of 270 daily flights within the U.S., Mexico and the Caribbean. In fact, the no-frills carrier has filed for IPO at a time when its financial position is much improved in comparison to a few years ago. Evidently, this can be gauged from the fact that the 2016 net income of the owned carrier was $200 million, up 42.9% from the 2014 level. The carrier exited 2016 with cash and cash equivalents of $612 million, significantly above the 2015 level of $419 million.
Apart from its improved financial status, the carrier is working hard to diversify its operations and reduce dependence on Denver International Airport. To this end, approximately 45% Frontier Airlines flights starting/ending at its hometown were in operation in 2016. The comparable figure was in excess of 90% in 2013.
Low-Cost Carriers in Focus
Frontier Airlines is the latest name in the low-cost segment of the U.S. aviation industry seeking to go public. The last U.S. carrier to go public was Virgin America. The carrier, also belonging to the low-cost segment, made its trading debut in late 2014. Virgin America was acquired late last year by Alaska Air Group (ALK - Free Report) , another low-cost carrier. Alaska Air Group carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Another successful low-cost carrier is Spirit Airlines (SAVE - Free Report) , which went public in 2011. Notably, the success of low-cost carriers has raised concerns for legacy carriers like American Airlines Group (AAL - Free Report) and United Continental Holdings (UAL - Free Report) . Moreover, in a bid to combat the threat of low-cost carriers and attract budget-conscious travelers both the above-mentioned legacy carriers have recently started to sell cheaper tickets (Basic Economy Fares).
Airline Industry Looking up
We believe that Frontier Airlines has filed of the IPO at the correct time as stocks in the airline space are looking up, after struggling for quite some time. The overall picture seems to be healthy, despite some hiccups, which is evident from the fact that the Zacks categorized Transportation- Airline industry has handsomely outperformed the S&P 500 Index over the last six months. The industry gained 21.2% compared with the S&P 500’s return of 9.5%.
Bottom-line
Given the bullish industry scenario and the success as well as popularity of low-cost carriers like Southwest Airlines (LUV - Free Report) and Spirit Airlines, we expect Frontier Airlines’ IPO to get a favorable response from investors. Consequently, we expect this burning issue to invite significant attention in the coming days.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Frontier Airlines Nears IPO, Files Papers with SEC
Putting all speculation to rest, Frontier Airlines has finally filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to launch its initial public offering (IPO). Although, the Denver, CO-based ultra-low-cost carrier disclosed nothing regarding the proceeds from the transaction, it is reportedly aiming to make its trading debut, under the symbol ‘FRNT,’ in the current quarter itself.
Carrier Overcomes Bankruptcy Woes
In fact, Frontier Airlines had filed for bankruptcy protection in 2008. In the following year, the carrier was purchased by Republic Airways Holdings. Interestingly, Indigo Partners bought Frontier Airlines from Republic Airways in 2013.
Frontier Airlines operates in excess of 270 daily flights within the U.S., Mexico and the Caribbean. In fact, the no-frills carrier has filed for IPO at a time when its financial position is much improved in comparison to a few years ago. Evidently, this can be gauged from the fact that the 2016 net income of the owned carrier was $200 million, up 42.9% from the 2014 level. The carrier exited 2016 with cash and cash equivalents of $612 million, significantly above the 2015 level of $419 million.
Apart from its improved financial status, the carrier is working hard to diversify its operations and reduce dependence on Denver International Airport. To this end, approximately 45% Frontier Airlines flights starting/ending at its hometown were in operation in 2016. The comparable figure was in excess of 90% in 2013.
Low-Cost Carriers in Focus
Frontier Airlines is the latest name in the low-cost segment of the U.S. aviation industry seeking to go public. The last U.S. carrier to go public was Virgin America. The carrier, also belonging to the low-cost segment, made its trading debut in late 2014. Virgin America was acquired late last year by Alaska Air Group (ALK - Free Report) , another low-cost carrier. Alaska Air Group carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Another successful low-cost carrier is Spirit Airlines (SAVE - Free Report) , which went public in 2011. Notably, the success of low-cost carriers has raised concerns for legacy carriers like American Airlines Group (AAL - Free Report) and United Continental Holdings (UAL - Free Report) . Moreover, in a bid to combat the threat of low-cost carriers and attract budget-conscious travelers both the above-mentioned legacy carriers have recently started to sell cheaper tickets (Basic Economy Fares).
Airline Industry Looking up
We believe that Frontier Airlines has filed of the IPO at the correct time as stocks in the airline space are looking up, after struggling for quite some time. The overall picture seems to be healthy, despite some hiccups, which is evident from the fact that the Zacks categorized Transportation- Airline industry has handsomely outperformed the S&P 500 Index over the last six months. The industry gained 21.2% compared with the S&P 500’s return of 9.5%.
Bottom-line
Given the bullish industry scenario and the success as well as popularity of low-cost carriers like Southwest Airlines (LUV - Free Report) and Spirit Airlines, we expect Frontier Airlines’ IPO to get a favorable response from investors. Consequently, we expect this burning issue to invite significant attention in the coming days.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>