Frontier Airlines hopes IPO rides wave of travel recovery

FILE - In this June 10, 2020 file photo, a Frontier Airlines jet heads down a runway for take off from Denver International Airport as travelers deal with the effects of the new coronavirus in Denver. Fans of Frontier Airlines can now buy a piece of the budget carrier. Frontier shares were expected to begin public trading Thursday, April 1, 2021, and company executives are hoping to get a tailwind from what seems to be a recovery in air travel. (AP Photo/David Zalubowski, File) (Copyright 2020 The Associated Press. All rights reserved.)

Frontier Airlines is betting that the budding recovery in leisure travel is for real.

Shares of the discount carrier began public trading Thursday, edging lower in midday trading. The Denver-based airline and its private owners sought to raise $570 million before costs from the IPO after pricing 30 million shares at $19, the low end of a $19 to $21 target. The stock opened at $18.61, then bumped up to $19.06 before dipping back down to $18.54.

CEO Barry Biffle said Frontier will remain focused on the leisure-travel market, unlike bigger airlines that depend on high-paying business travelers.

“It's not going to change how we run the business,” Biffle said in an interview. “The strategy is the same.”

The IPO timing is interesting, coming just as Americans are starting to fly in numbers not seen since the coronavirus pandemic hit. United Airlines CEO Scott Kirby said this week that demand for domestic leisure travel “has almost entirely recovered," while business and international travel remain deeply depressed.

Biffle said after a year of lockdowns, there are “lots of people with a lot of money in their pockets and with a burning desire to get out of their house and get back to living. I think there will be plenty of demand. It's a great time.”

Frontier faces obstacles. Despite the growing crowds at airports, air travel is still down nearly half from this time in 2019. There is tough and growing competition for leisure travelers.

And Frontier has its own reputation issues — it had the highest complaint rate of any U.S. airline last year, mostly over refunds, according to government figures. Some customers are surprised to get hit with a fee for carry-on bags that go in the overhead bin.