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Ultra-low-cost carriers set their sights on expansion

Ultra-low-cost carriers set their sights on expansion
Ultra-low-cost carrier Frontier Airlines has plans to expand by ordering 12 new jets from Airbus, the European airline manufacturer. (David Zalubowski / Associated Press)

Ultra-low-cost carriers with thin-cushion seats and a long menu of passenger fees reap hefty profits, and that is why fliers can expect a major expansion in such low-fare carriers in the next few years.

Denver-based Frontier Airlines, the latest carrier to convert to an ultra-low-cost format, announced last week that it had ordered 12 new Airbus aircraft, including 10 jets that can hold as many as 230 passengers each.

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Frontier already has back orders for an additional 89 planes with Airbus, the European aircraft manufacturer. The current fleet has 55 planes.

"This announcement paves the way for us to grow, modernize and renew our fleet while helping us build a strong foundation for the future," said Barry Biffle, president of Frontier Airlines.

Spirit Airlines, based in Miramar, Fla., has plans to expand its fleet from 80 planes this year to 144 by the end of 2021.

The expansion efforts are fueled by a drive for big profits. Ultra-low-cost airlines enjoy among the biggest profit margins in the industry.

Spirit posted net profit of $225 million in 2014, up 27% from the previous year. Frontier, a privately owned company, had net income of $129 million last year, compared with $11 million in the previous year, according to federal data.

But not everyone likes super-cheap airlines.

Frontier and Spirit have the country's highest passenger complaint rates, with 15.84 complaints per 100,000 passengers for Frontier and 10.27 complaints per 100,000 passengers for Spirit, according to the latest data from the U.S. Department of Transportation.

The average rate for all airlines is 2.04 complaints per 100,000 passengers.

To read more about travel, tourism and the airline industry, follow me on Twitter at @hugomartin.

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