Warren E. Buffett recently revealed a willingness to invest in airlines after years of shunning them, and ever since, those stocks have soared. Now, one more company is aiming to be added to the list of publicly traded airlines.
Frontier Airlines — known for offering scant legroom and low prices for rides on planes that have wild animals painted on the tails — is preparing an initial public offering, people with knowledge of the deal said. The Denver-based company has tapped Deutsche Bank, JPMorgan Chase and Evercore to manage the debut, said the people, who asked not to be named discussing private information.
Frontier is aiming to raise about $500 million in the deal, the people said. That would imply a valuation for the company of about $2 billion. Frontier had an official “bake off,” where banks were interviewed for a role in the offering, late last year, one of the people said.
Like the history of many airlines, Frontier’s is winding. The airline was founded in the 1990s after Continental Airlines shuttered its Denver hub. It has reorganized and gone through bankruptcy and has had several owners. The latest owner is the investment firm Indigo Partners, which is run by Bill Franke, who is credited with being the chairman who turned around Spirit Airlines, another no-frills airline. He has been shifting Frontier toward the Spirit model.
About a year ago, David Siegel resigned as chief executive of Frontier after the government said the airline had the highest complaint rate and worst on-time performance of the major American airlines. Tickets to fly on Frontier are inexpensive, but the carrier adds other costs on top, such as…