Frontier Hit Record Revenue and Still Lost $104 Million

Frontier Airlines reported record quarterly revenue of nearly $1.4 billion on October 28, up more than 50 percent from a year earlier. It still posted a $104 million net loss.

The surge follows Spirit Airlines’ exit: Spirit stopped flying in May after two Chapter 11 bankruptcies. Average fare revenue per passenger rose 71 percent to almost $68, and Frontier flew about 18 percent more passengers, roughly 1.5 million more travelers. CEO Jimmy Dempsey said about 30 percent of Frontier’s business overlapped with Spirit’s leisure markets and that the airline had won back roughly a quarter of that opportunity.

Fuel is the squeeze. Frontier’s fuel bill jumped 82 percent to $425 million, and Dempsey said the airline fully passed the cost on to customers, while United recovered about 72 percent of its increase. Nearly all of Frontier’s adjusted operating profit came from gains on aircraft sale-and-leaseback deals; without them its operating margin was 0.1 percent, compared with about 9.5 percent at Delta and 6.9 percent at United.

Next year Frontier plans to slow capacity growth to 5 to 7 percent, down from past rates of 20 to 25 percent, retire 40 to 45 underused aircraft, and add first-class seats and Starlink Wi-Fi. Management warned it could post an adjusted loss in the fourth quarter, with fuel costs running more than $100 million above its prior forecast.

Sources: Skift