United, Frontier add airline routes to cut in on ailing Spirit

Reuters
09/04
UPDATE 3-United, Frontier add airline routes to cut in on ailing Spirit

Recasts first paragraph, changes headline, adds details, share performance in paragraph 7

United and Frontier expand routes amid Spirit's bankruptcy

Spirit Airlines says it will keep flying, despite claims from rivals

Spirit discontinues service to 11 US cities, including Portland, Oregon, and San Diego

By Rajesh Kumar Singh and Doyinsola Oladipo

Sept 4 (Reuters) - U.S. airlines are scrambling to grab market share from ailing Spirit Airlines. The discounter's response? Not so fast.

United Airlines UAL.O on Thursday rushed to cash in on rival Spirit's second bankruptcy filing in less than a year, beefing up its footprint in the bankrupt discount carrier's main markets, including Fort Lauderdale, Orlando, and Las Vegas, while ultra low cost carrier Frontier Group ULCC.O is setting its sights on new routes in the United States, Latin America and the Caribbean.

United said it will start selling tickets on Thursday for new flights to 15 cities where Spirit operates. The Chicago-based airline will fly larger aircraft between Chicago and New York's LaGuardia Airport to help customers outside of its hubs connect to the newly added flights.

"If Spirit suddenly goes out of business, it will be incredibly disruptive, so we're adding these flights to give their customers other options if they want or need them," said Patrick Quayle, United's senior vice president of global network planning and alliances.

Spirit hit back at United, telling Reuters that it expects to remain in business "for many years to come."

"While we appreciate the obsession certain airline executives have with us, we’re focused on competing and running a great operation," Duncan Dee, Spirit’s senior vice president of corporate communications, said. "Suggesting anything else is wishful thinking on the part of a high-cost airline looking to eliminate a low-cost competitor so they can fulfill their ultimate goal of charging American travelers the highest fares possible to visit the people and places they love."

Frontier shares fell 3.1% in midday trading. United shares rose 1.5%.

Florida-based Spirit filed for bankruptcy protection last week, following its first filing in November. It has been shrinking its operations and retreating from markets as it tries to stem its cash burn, with its operating expenses amounting to 118% of its revenue in its most recent quarter.

Spirit has discontinued service to 11 U.S. cities, including Portland, Oregon, and San Diego, and no longer plans service to Macon, Georgia, which was scheduled to start in mid-October.

Frontier, on the heels of United's announcement, said it was launching 22 new routes. It has been expected to help fill gaps left by Spirit after Frontier introduced 20 new routes to Spirit's strongholds in late August.

"We expect these carriers to continue to see a sizable benefit from Spirit's retrenchment, despite having less total overlap," TD Cowen analyst Tom Fitzgerald wrote in a note this week.

(Reporting by Nathan Gomes in Bengaluru, Rajesh Kumar Singh in Chicago and Doyinsola Oladipo in New York; Editing by Shailesh Kuber, Sriraj Kalluvila, Shinjini Ganguli, Rod Nickel)

((Nathan.Gomes@thomsonreuters.com;))

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