Budget carrier Frontier Airlines (ULCC) saw its shares fly after announcing a slew of new flights to a number of major American Airlines (AAL) hubs across the United States.
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Specifically, the low-cost airline plans to launch new flights from JFK to key destinations, including Miami, LA, and Dallas, with fares starting from just $20. As a result of the announcement, ULCC stock climbed 4%.
Looking ahead, flights to Miami are set to begin in March, while the Dallas service is scheduled for April, and the Los Angeles route will follow in May.
Move Signals ULCC Confidence
Frontier Airlines has been sounding more confident about its expansion efforts lately. The company said in December that it would return to top double-digit profit margins by mid-2025. Shares of the low-cost carrier are up 16% in 2025 already.
Just two days ago, on January 6th, the company upgraded its Fiscal Q4 outlook, citing improved revenue and operational performance due to initiatives like network optimization and capacity growth moderation.
ULCC said it now anticipates a 4% pre-tax margin, an increase from earlier estimates, and a 14% rise in revenue per available seat mile compared to the previous year.
Frontier Airlines CEO Strategy Shift Bears Fruit
Frontier Airlines is battling for seats in an industry where customers are prepared to spend more in return for more space. In December the company announced changes including the introduction of a small number of first-class seats, as well as an enhanced loyalty program.
CEO Barry Biffle said customers want “more premium options, like first class seating, attainable seat upgrades, more free travel for their companions, and the ability to use miles on more than just airfare.”
Speaking to CNBC, he said the new initiatives will bring in about $250 million in 2026 and more than $500 million in 2028.
Will Frontier Airlines Stock Go Up?
Overall, Wall Street has a Hold consensus rating on ULCC stock, based on two Buys and seven Holds. The average ULCC price target is $6.57 and implies a roughly 21% downside potential. ULCC stock has increased 93% in the last six months.
