Frontier Airlines (NASDAQ:ULCC), one of the world's biggest budget airlines, is adding first-class seats.

Its change in strategy comes as as the industry is battling for customers who are willing to splurge on more personal space.

Starting in September, Frontier plans to start ripping out the first two rows of its three-by-three economy seats to add four first-class seats, in a two-by-two configuration.

The Denver-based airline is also revamping its loyalty program to offer complimentary seat upgrades to its gold level members and above, when available, and a free companion ticket for its higher-tier platinum and diamond-level members. In mid-2025, customers will be able to redeem their miles for seating upgrades and baggage fees.

CEO Barry Biffle said he expects the new initiatives will bring in about $250 million in 2026 and more than $500 million in 2028.

"While we have the lowest costs in the industry, we don't have the best revenue model," Biffle said in an interview.

Biffle said the company's biggest gaps in its revenue model came from not offering first-class seats and not having enough rewards for its loyalty program members. "This is going to be a game-changer," he added.

ULCC shares began Tuesday down 23 cents, or 3.8%, to $5.90.

COMTEX_460430883/2559/2024-12-03T09:57:42