Frontier Group Holdings Inc (ULCC, Financial), the parent company of Frontier Airlines, Inc., announced its financial results for the third quarter of 2023 on October 26, 2023. The company faced several challenges during the quarter, including elevated fuel prices, uneven demand recovery, and operational disruptions, which impacted the overall financial results.
Financial Performance
Frontier Group Holdings Inc (ULCC, Financial) reported total operating revenues of $883 million for the third quarter of 2023, a 3% decrease compared to the same period in 2022. The company's Cost per Available Seat Mile (CASM) was 9.66 cents, representing a decline of 9% over the 2022 quarter. The company also reported a pre-tax margin of (5.1)% and a net loss of $32 million.
Operational Highlights
Despite the financial challenges, the company achieved significant operational growth. Frontier Group Holdings Inc (ULCC, Financial) took delivery of eight A321neo aircraft during the third quarter, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 77% as of September 30, 2023. This makes Frontier the major U.S. carrier with the highest proportion of A320neo family aircraft. The company also generated 103 available seat miles (“ASM”) per gallon, reaffirming its position as the most fuel-efficient of all major U.S. carriers.
Future Outlook
Looking ahead to the fourth quarter, the company expects stage-adjusted, non-fuel unit costs to improve and booking volume to stabilize, driven by low fare stimulation albeit at higher fuel prices. Fourth quarter capacity is expected to grow by 12% to 14% over the comparable 2022 quarter. Adjusted (non-GAAP) total operating expenses (excluding fuel) are expected to be $655 to $665 million. Fourth quarter adjusted (non-GAAP) pre-tax margin (excluding special items) is expected to be (6)% to (9)%, including the impact of the higher fuel cost environment.
CEO Commentary
Frontier's President and CEO, Barry Biffle, commented on the results, stating,
Elevated fuel prices, uneven demand recovery, and operational disruptions all impacted third quarter results. To strengthen our competitive position, we are focused on simplifying our operations, concentrating growth in underserved markets, delivering the lowest costs and enhancing our loyalty program offering. I'm extremely proud of Team Frontier for their unwavering resolve to deliver Low Fares Done Right.”
Explore the complete 8-K earnings release (here) from Frontier Group Holdings Inc for further details.
