Bill Franke's Frontier Will Add First-Class Seats to Its Airbus Fleet

Frontier Airlines, the largest U.S. budget carrier after Spirit's May collapse, will install first-class seats on its Airbus fleet in 2026 and add SpaceX's Starlink Wi-Fi, its 89-year-old chairman Bill Franke told CNBC in late June.

Franke founded Indigo Partners, the private equity firm that backs Frontier and has owned budget airlines from Chile to Hungary to the Philippines. For three decades he profited by stripping amenities from base fares and charging passengers for bags, seat selection and other extras. The new move upmarket — alongside similar plans at Allegiant Air and JetBlue — marks the most concrete break yet from the playbook Franke wrote.

"We're not trying to have a Singapore Airlines first class," Franke said at Indigo's model-airplane-filled offices in Scottsdale, Arizona. "What we're trying to do is give the consumer an option," he added, calling the product at once upscale and competitive.

What pushed the model off course?

Two forces — cost inflation and rivals copying the formula — have eroded the once-reliable economics of U.S. ultra-low-cost carriers. Pilot salaries, maintenance and operating expenses have all jumped since the pandemic. Higher fuel prices following the start of the Iran war have compounded the pressure.

United Airlines and Delta Air Lines, meanwhile, have rolled out bare-bones basic-economy fares and now apply the same fee-heavy approach to their premium cabins. August domestic airfares climbed more than 23% year-over-year, according to federal data released Sept. 11.

The damage is visible across the budget segment. Spirit Airlines collapsed in May, the largest U.S. airline failure in decades. Frontier has been profitable in only one year since 2019. JetBlue has not turned a profit since 2019.

What happened to the Spirit merger?

Franke tried to combine Frontier and Spirit in 2022. Spirit shareholders rejected his offer in favor of an all-cash bid from JetBlue. A federal court ruled that JetBlue–Spirit deal violated antitrust law in January 2024, and the transaction collapsed. Spirit filed for bankruptcy four months later.

How does Franke read today's traveler?

Franke said consumers have grown more sophisticated, armed with data and AI-driven comparison tools. Still, he said, price remains decisive for much of the market.

"None of the airlines are quite sure what AI ... is going to do to your decision to book," Franke said. "But price and schedule are still at the top."

He added: "For a lot of consumers, whether the ticket costs $200 or $125 is not going to be the decision-maker, but for a lot of people it is still. Middle class, younger flyers, they still focus on price."

Will Frontier's premium push actually pay off?

Frontier CEO Jimmy Dempsey, who took over from Barry Biffle in December after a near-decade run for his predecessor, framed the strategy on a July 29 earnings call as a path back to consistent profits.

"We're not forecasting next year, but the airline is certainly on the right trajectory to return to sustainable profitability," Dempsey said.

Franke argued the upmarket experiment is geography-specific. Premium cabins make sense where large network carriers constantly retrofit interiors, he said, but not in every market Indigo serves.

"In the U.S. market where you have mature large airlines — Delta, United, American — who are changing the interior of their aircraft on a regular basis, it could well be that a low-cost or a lower-cost airline, in order to properly compete, needs to make adjustments to its business model," Franke said. "That doesn't mean you have to do that in an emerging market like Hungary or Peru."

Where does the Franke alumni network stand today?

The chairman's influence reaches the top of the U.S. industry. American Airlines CEO Robert Isom, his predecessor Doug Parker, and United Airlines CEO Scott Kirby all worked for Franke earlier in their careers, along with American Vice Chair Steve Johnson.

Isom recalled a long-running bet between the two on Stanford–Notre Dame football games. Franke's rule, Isom said: "fast pay makes fast friends." Isom showed a reporter some of his winnings — Chilean pesos paperclipped to Franke's business card and euro coins taped to a sheet marked "PAID IN FULL."

Kirby described his former boss in blunter terms at a June industry conference in Rio de Janeiro. "All of us, our formative years were working for Bill, getting screamed at by Bill. ... He should take more credit for that," he said. Kirby called Franke "a hard-ass mentor." Franke disputed the yelling: "That's just not me."

Johnson, a partner at Indigo from 2003 to 2009 when it owned Spirit, credited Franke with a decisive 2008 call. Crude oil had hit more than $147 a barrel — over $200 in today's dollars — and Spirit was running low on cash. As Johnson headed to a California-bound plane, Franke ordered him to sell the carrier's fuel hedge book. The trade generated about $30 million; oil prices later crashed. "It turned out to be just exactly what Spirit needed," Johnson said.

Franke, asked about his next moves, said he is reviewing roughly one startup idea a month. "We see startup ideas probably one a month," he said. Whether his first-class bet becomes the template for a post-Spirit U.S. budget sector — or another casualty of the model he built — will turn on Frontier's 2026 results and the trajectory of fares that have already climbed 23% in a single year.