DENVER - Frontier Group Holdings, Inc. (NASDAQ: ULCC) reported a narrower-than-expected loss for the first quarter, with earnings per share (EPS) of -$0.09, surpassing analyst projections of -$0.18. The airline's revenue for the quarter was $865 million, slightly above the consensus estimate of $859.21 million and marking a 2% increase from the same quarter in 2023.
The company attributed its improved results to rigorous cost and revenue management, as stated by CEO Barry Biffle. Frontier's focus on fuel efficiency continued to pay off, with a 2% improvement in available seat miles per gallon compared to the previous year, reinforcing its position as "America's Greenest Airline."
Looking ahead to the second quarter of 2024, Frontier expects capacity to grow by 12 to 14 percent over the comparable 2023 quarter. The company anticipates that its strategic shift to high-fare, underserved markets will drive higher revenue per available seat mile (RASM) as these new markets mature. Adjusted pre-tax margin is forecasted to be between 3 to 6 percent, factoring in the impact of higher fuel prices and network transition, with fuel costs expected to be $2.80 to $2.90 per gallon.
For the full year of 2024, Frontier maintains its previous guidance, with the exception of a $0.10 per gallon increase in expected fuel costs, now anticipated to be $2.80 to $2.90 per gallon. The airline projects a capacity increase of 12 to 15 percent compared to 2023 and an adjusted pre-tax margin of 3 to 6 percent.
Adjusted cost per available seat mile (CASM), excluding fuel and stage-length adjusted to 1,000 miles, is expected to decrease by 1 to 3 percent over the prior year.
Biffle expressed confidence in the airline's direction, citing revenue and network enhancements, including the transition to underserved, high-fare markets, revenue diversification, and cost savings from network simplification. "I'm proud of Team Frontier for their extraordinary contributions and for their ongoing commitment to deliver Low Fares Done Right every day," he added.
As Frontier continues to expand its operations and fleet, investors will be watching closely to see if the airline can maintain its momentum and achieve its financial targets for the coming quarters.
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