Frontier Airlines (ULCC), a U.S.-based low-cost airline, is shaking up its leadership at a time when budget carriers are under growing pressure. The company said President James Dempsey will step in as interim CEO effective immediately, replacing Barry Biffle, who is stepping down after more than a decade with the airline.
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Dempsey is a long-time executive at Frontier. He joined the company in 2014 as Chief Financial Officer and later became president. According to Board Chairman Bill Franke, Dempsey’s long experience with the airline makes him well suited to guide it through the next phase. Meanwhile, Biffle, who has served as CEO since 2016, will remain in an advisory role through the end of the year.
This leadership change comes as Frontier faces a tougher operating backdrop. Rising labor costs and higher expenses have weighed on results, while competition has intensified.
Stock Performance Reflects Ongoing Challenges
Frontier’s stock has struggled, with shares down about 20% so far this year and 11% over the past year.
Like other ultra-low-cost carriers, Frontier has been hit by rising labor costs and higher expenses. At the same time, large airlines are squeezing the space by offering low fares while still making money on long-haul and international routes.
To counter these pressures and boost its revenue, Frontier is testing changes to its business model. Notably, the airline plans to add first-class seats, a notable shift for a budget carrier. The move is aimed at attracting higher-spending travelers and increasing revenue per flight.
Is ULCC a Good Stock to Buy?
On TipRanks, Frontier Airlines stock has a consensus Strong Buy rating among 10 Wall Street analysts. That rating is based on one Buy and nine Holds issued in the last three months. The average ULCC price target of $5.43 implies 5.73% downside from current levels.
