After Spirit Shut Down, JetBlue Founder Warns Frontier May Be Next — Can Its Discount Model Survive?

JetBlue’s founder says Frontier Airlines may go bankrupt. Dave Neeleman is now Chairman of Breeze Airways. Earnlier he said that JetBlue could go bankrupt this year under a mountain of $9 billion debt and that with that much debt no one would buy them.

Southwest’s CEO agrees the debt is a barrier to buying JetBlue and so does United CEO Scott Kirby.

Now Neeleman says that losing Spirit was good for the industry – he’s right, it helps JetBlue at Fort Lauderdale (where Spirit was based) and helps Frontier (the other major ultra-low cost carrier). However, he says he’s not sure that Frontier left alone in the segment can survive.

On this week’s Airlines Confidential, Neeleman’s comments were highlighted:

David Neeleman spoke a couple of times on a couple of different panels… As it related to Spirit, he said in as many words that it’s good for the industry to have lost a cash-flow-negative airline…

And he said that Frontier now remains the sole “spill carrier,” meaning an airline that flies head-to-head with other airlines and relies on those airlines filling up. He said it’s an open question in his mind whether there is room in the market for even one spill carrier.

So I know a lot of folks will be watching to see what Jimmy Dempsey and the team at Frontier do now. They are, I wouldn’t say the last remaining ULCC, but certainly the last in that space of flying large-gauge airplanes from the major airports and so on.

Frontier and JetBlue are the two remaining most-troubled major U.S. airlines, after Spirit Airlines shut down. JetBlue hasn’t made money in six years. Frontier hasn’t either, except for a blip where aircraft financing transactions allowed them to show an accounting profit in 2024.

But Frontier is an airline you do not choose to fly because you prefer them. You fly them when they are the only option – they are substantially cheaper than anyone else, or they have the only available non-stop. But increasingly other airlines do compete on price (with basic economy restrictions). Neeleman is saying he’s no longer certain the U.S. industry has the space, any longer, for an airline that just picks up traffic that other airlines effectively don’t want.