Frontier (ULCC) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Frontier Airlines' Q2 2025 performance, operational highlights, and CEO commentary are presented, emphasizing strategic progress despite challenges Second Quarter 2025 Highlights Frontier Airlines' Q2 2025 results met expectations, driven by fleet modernization, new loyalty benefits, and route expansion, despite operational challenges Q2 2025 Financial and Operational Metrics | Metric | Q2 2025 | Change vs. Q2 2024 | | :----- | :------ | :----------------- | | Total Revenue | $929 million | 2% lower capacity | | RASM (stage-adjusted) | 8.74 cents | Up slightly | | CASM | 9.73 cents | 8% above | | Net Loss | $70 million | N/A (was profit) | | EPS | $(0.31) | N/A (was profit) | | Total Liquidity | $766 million | | | A321neo Deliveries | 3 aircraft | | | A320neo Family Fleet | 84% of fleet | Highest among major U.S. carriers | | ASMs per gallon | 106 | 2% higher than Q2 2024 | | Cardholder Spending | | 19% increase | | New Routes Launched | 35 | | - The company launched previously announced Frontier Elite Platinum and Diamond member free unlimited companion travel benefits, along with other significant loyalty enhancements, supporting a 19% year-over-year increase in cardholder spending[4] - The company launched 35 new routes and announced expanded service in the Eastern and Midwestern U.S., including direct flights between Baltimore-Chicago O'Hare, Myrtle Beach-Trenton, and nine new routes from Atlanta[4] CEO Commentary CEO Barry Biffle affirmed Q2 results met expectations, projecting improved domestic supply-demand, mid-to-high single-digit RASM growth in Q3, and a strong foundation for 2026 profitability - Q2 performance was within guidance, overcoming severe adverse weather and widespread air traffic control delays in late May and June[3] - Domestic supply-demand balance in Frontier markets is expected to gradually improve in the coming months, with commercial initiatives supporting mid-to-high single-digit stage-adjusted RASM growth in Q3[3] - A solid foundation for 2026 profitability is anticipated[3] Financial Performance (Q2 2025 & YTD) This section details Frontier Airlines' Q2 2025 and year-to-date financial results, including revenue, cost, profitability, and liquidity performance Select Financial Highlights (GAAP & Non-GAAP) Q2 2025 total operating revenues decreased 5% to $929 million, while expenses increased 6% to $1.004 billion, leading to a $70 million net loss, a reversal from Q2 2024's profit Select Financial Highlights (GAAP & Non-GAAP) | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Change (YoY) | YTD 2025 (GAAP) | YTD 2024 (GAAP) | Change (YoY) | | :---------------------- | :------------- | :------------- | :----------- | :-------------- | :-------------- | :----------- | | Total operating revenues | $929 million | $973 million | (5)% | $1,841 million | $1,838 million | —% | | Total operating expenses | $1,004 million | $948 million | 6% | $1,962 million | $1,844 million | 6% | | Pre-tax income (loss) | $(70) million | $32 million | N/M | $(110) million | $8 million | N/M | | Net income (loss) | $(70) million | $31 million | N/M | $(113) million | $5 million | N/M | | Earnings per share, diluted | $(0.31) | $0.14 | N/M | $(0.50) | $0.02 | N/M | - This summary includes financial results for both GAAP and adjusted (non-GAAP) metrics; reconciliations for non-GAAP financial information are provided in the appendix[5] Revenue Performance Q2 2025 total operating revenue decreased 5% to $929 million, impacted by 2% lower capacity, disrupted demand, and operational delays, with RASM declining 2% but stage-adjusted RASM slightly up - Total operating revenue for Q2 2025 was $929 million, a 5% decrease from Q2 2024, primarily due to a 2% capacity reduction, disrupted domestic air travel demand in April, and severe weather and air traffic control (ATC) ground delay programs[6] Q2 2025 Revenue Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | RASM | 9.01 cents | 9.21 cents | (2)% | | RASM (stage-adjusted to 1,000 miles) | 8.74 cents | 8.73 cents | —% | | Enplanements | 8,499 thousand | 8,899 thousand | (4)% | | Departures | 52,147 | 57,176 | (9)% | | Average stage length | 942 miles | 899 miles | 5% | | Total revenue per passenger | $109.27 | $109.25 | —% | | Flown load factor | 79.3% | 78.1% | 1.2 pts | - Stage-adjusted RASM to 1,000 miles slightly increased year-over-year, despite the aforementioned operational factors[7] Cost Performance Q2 2025 total operating expenses rose 6% to $1 billion, with non-fuel CASM increasing 20% to 7.50 cents, driven by lower aircraft utilization, fleet growth, and reduced sale-leaseback gains Q2 2025 Cost Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Total operating expenses | $1 billion | $948 million | 6% | | Fuel expense | $230 million | $288 million | (20)% | | Average fuel cost per gallon | $2.36 | $2.84 | (17)% | | Operating expenses (excl. fuel) | $774 million | $660 million | 17.3% | | CASM | 9.73 cents | 8.98 cents | 8% | | CASM (excluding fuel) | 7.50 cents | 6.24 cents | 20% | - The increase in non-fuel CASM was primarily attributed to a 13% decrease in average daily aircraft utilization, resulting from disciplined capacity deployment, fleet growth, and reduced sale-leaseback gains due to aircraft and spare engine delivery timing[10] Earnings & Profitability Frontier Airlines reported a $70 million net loss in Q2 2025, resulting in a $(0.31) diluted loss per share, a significant shift from Q2 2024's net income Q2 2025 Earnings & Profitability | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :---------------------- | :------ | :------ | :----------- | | Net loss | $70 million | $31 million (income) | N/M | | Diluted EPS | $(0.31) | $0.14 | N/M | | Weighted-average shares outstanding | 228 million | 227 million | 0.4% | Liquidity As of June 30, 2025, Frontier Airlines maintained $766 million in total liquidity, including $561 million in unrestricted cash and $205 million in undrawn credit facility availability Liquidity as of June 30, 2025 | Metric | As of June 30, 2025 | | :-------------------------------- | :------------------ | | Total liquidity | $766 million | | Unrestricted cash and cash equivalents | $561 million | | Undrawn revolving credit facility availability | $205 million | - Total liquidity comprises unrestricted cash and cash equivalents and the company's undrawn revolving credit facility availability[12] Operational Performance & Fleet This section reviews Frontier Airlines' operational metrics, including capacity, load factor, and fuel efficiency, alongside fleet developments and modernization efforts Operational Highlights Q2 2025 saw ASMs decrease 2% and departures fall 9%, yet load factor improved 1.2 percentage points to 79.3%, with 106 ASMs per gallon reinforcing environmental leadership - Available Seat Miles (ASMs) were 10.313 billion, a 2% year-over-year decrease[30] - Departures totaled 52,147, a 9% year-over-year decrease[30] - Load factor was 79.3%, an improvement of 1.2 percentage points year-over-year[30] - 106 ASMs per gallon were generated, a 2% improvement from Q2 2024, reaffirming Frontier's position as 'America's Greenest Airline'[4][16] - Average daily aircraft utilization was 9.7 hours, a 13% year-over-year decrease[30] Fleet & Fuel Efficiency As of June 30, 2025, Frontier operated 164 Airbus aircraft, with 84% being A320neo family, the highest among major U.S. carriers, and committed to 180 additional deliveries by 2031, including a new engine agreement Fleet Composition as of June 30, 2025 | Equipment | Quantity (as of June 30, 2025) | Seats | | :-------- | :----------------------------- | :---- | | A320neo | 82 | 186 | | A320ceo | 6 | 180 - 186 | | A321ceo | 21 | 230 | | A321neo | 55 | 240 | | Total fleet | 164 | | - Three A321neo aircraft were delivered in Q2 2025[4][14] - As of June 30, 2025, 84% of the company's fleet consisted of fuel-efficient A320neo family aircraft, the highest proportion among all major U.S. carriers[4][15] - The company committed to 180 additional aircraft deliveries by 2031, with A321neo aircraft accounting for approximately 85% of future committed deliveries[14] - On July 23, 2025, the company signed an agreement with Pratt & Whitney for PW1100 GTF engines to power 91 Airbus A321neo firm order aircraft, with initial deliveries expected in late 2026[4][17] Outlook & Company Information This section presents Frontier Airlines' Q3 2025 guidance, a company overview, and a cautionary statement regarding forward-looking statements and associated risks Third Quarter 2025 Guidance Frontier projects a Q3 2025 adjusted (non-GAAP) loss per share between $(0.26) and $(0.42), reflecting improved competitive capacity, commercial initiatives, and higher fuel prices, with capacity down 4% to 5% Third Quarter 2025 Guidance | Metric | Third Quarter 2025 Guidance | | :-------------------------- | :-------------------------- | | Adjusted (non-GAAP) loss per share | $(0.26) to $(0.42) | | Capacity (YoY change) | Down 4% to 5% | | Average fuel cost per gallon | $2.51 | | Estimated weighted average shares outstanding | 228 million | | Projected tax expense provision | $2 to $4 million | - Guidance reflects anticipated sequential improvement in competitive overlapping capacity, ongoing progress on key commercial initiatives, and higher fuel prices compared to the prior quarter[20] - The company will continue to monitor the demand environment closely and make further adjustments to capacity and related costs as appropriate[20] About Frontier Airlines Frontier Airlines, headquartered in Denver, Colorado, operates 164 A320 family aircraft with the largest A320neo fleet in the U.S., emphasizing fuel efficiency and affordable travel with 180 new Airbus aircraft on order - Frontier Airlines is committed to 'Low Fares Done Right'[23] - Headquartered in Denver, Colorado, operating 164 A320 family aircraft, with the largest A320neo family fleet in the U.S.[23] - Through these aircraft, high-density seating, and weight reduction initiatives, Frontier is the most fuel-efficient among all major U.S. airlines in terms of ASMs per gallon of fuel consumed[23] - With 180 new Airbus aircraft on order, the company will continue to grow to fulfill its mission of providing affordable travel across America[23] Forward-Looking Statements & Risks This section provides a cautionary statement regarding forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially from projections, with no obligation to update - Certain statements in this press release are considered forward-looking, based on current expectations and beliefs regarding future events and anticipated financial and operational performance[25] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by applicable law[25] - Actual results may differ materially from these forward-looking statements due to numerous risks and uncertainties related to the company's operations and business environment[26] - Key risk factors include adverse economic and political conditions, intense airline industry competition, flight operation disruptions (e.g., severe weather or ATC shortages), ability to attract and retain qualified personnel, high and/or volatile fuel prices, reliance on technology and automated systems, dependence on third-party service providers, negative publicity and/or brand reputation damage, terrorist attacks or security incidents, increased privacy and data security obligations, changes in industry alliances and joint venture arrangements, network strategy changes, reliance on a single aircraft and engine supplier, increased inspection programs and maintenance requirements, labor disputes, major airport service disruptions, seasonality, impairment of intangible or long-lived assets, government regulatory compliance costs, environmental regulations and climate change-related risks, inability to receive or integrate new aircraft as planned, high financial leverage, failure to comply with financing agreement covenants, changes in senior management or key employees, current or future litigation and regulatory actions, and increased insurance costs[26] Financial Statements & Reconciliations This section presents Frontier Airlines' unaudited condensed consolidated financial statements and detailed reconciliations of non-GAAP financial measures to their GAAP equivalents - Non-GAAP financial information provides supplemental disclosures, offering useful additional metrics for assessing operational and cost performance[32] - These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for GAAP performance measures[32] - The presentation of these non-GAAP financial measures may differ from similarly titled non-GAAP financial measures used by other companies[32] Condensed Consolidated Statements of Operations This section provides unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, detailing revenue, expense, and profitability metrics Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Operating Revenues (Three Months Ended June 30) | 2025 ($ millions) | 2024 ($ millions) | % Change | | :------------------------------------ | :-------- | :-------- | :------- | | Passenger | 898 | 950 | (5)% | | Other | 31 | 23 | 35% | | Total operating revenues | 929 | 973 | (5)% | | Operating Expenses (Three Months Ended June 30) | 2025 ($ millions) | 2024 ($ millions) | % Change | | :------------------------------------ | :-------- | :-------- | :------- | | Aircraft fuel | 230 | 288 | (20)% | | Salaries, wages and benefits | 254 | 244 | 4% | | Aircraft rent | 194 | 147 | 32% | | Station operations | 178 | 163 | 9% | | Maintenance, materials and repairs | 47 | 42 | 12% | | Sales and marketing | 39 | 47 | (17)% | | Depreciation and amortization | 21 | 18 | 17% | | Other operating | 41 | (1) | N/M | | Total operating expenses | 1,004 | 948 | 6% | | Operating income (loss) | (75) | 25 | N/M | | Other income (expense) | | | | | Interest expense | (10) | (8) | 25% | | Capitalized interest | 8 | 7 | 14% | | Interest income and other | 7 | 8 | (13)% | | Total other income (expense) | 5 | 7 | (29)% | | Income (loss) before income taxes | (70) | 32 | N/M | | Income tax expense (benefit) | — | 1 | (100)% | | Net income (loss) | (70) | 31 | N/M | | Earnings (loss) per share, diluted | (0.31) | 0.14 | N/M | | Weighted-average common shares outstanding (Diluted) | 227,941,534 | 226,603,798 | 1% | Comparative Operating Statistics This section presents detailed unaudited comparative operating statistics for the three and six months ended June 30, 2025 and 2024, covering ASMs, departures, load factor, per-passenger revenue, and various CASM metrics Comparative Operating Statistics (Three Months Ended June 30) | Operating Statistics (Three Months Ended June 30) | 2025 | 2024 | % Change | | :------------------------------------------ | :--- | :--- | :------- | | Available seat miles ("ASMs") (millions) | 10,313 | 10,552 | (2)% | | Departures | 52,147 | 57,176 | (9)% | | Average stage length (miles) | 942 | 899 | 5% | | Block hours | 140,149 | 147,506 | (5)% | | Average aircraft in service | 163 | 145 | 12% | | Aircraft – end of period | 164 | 148 | 11% | | Average daily aircraft utilization (hours) | 9.7 | 11.2 | (13)% | | Passengers (thousands) | 8,499 | 8,899 | (4)% | | Average seats per departure | 208 | 204 | 2% | | Revenue passenger miles ("RPMs") (millions) | 8,182 | 8,238 | (1)% | | Load Factor | 79.3 % | 78.1 % | 1.2 pts | | Fare revenue per passenger ($) | 40.94 | 39.91 | 3% | | Non-fare passenger revenue per passenger ($) | 64.77 | 66.80 | (3)% | | Other revenue per passenger ($) | 3.56 | 2.54 | 40% | | Total ancillary revenue per passenger ($) | 68.33 | 69.34 | (1)% | | Total revenue per passenger ($) | 109.27 | 109.25 | —% | | Total revenue per available seat mile ("RASM") (¢) | 9.01 | 9.21 | (2)% | | RASM, stage-length adjusted to 1,000 miles (¢) | 8.74 | 8.73 | —% | | Cost per available seat mile ("CASM") (¢) | 9.73 | 8.98 | 8% | | CASM (excluding fuel) (¢) | 7.50 | 6.24 | 20% | | CASM + net interest (¢) | 9.68 | 8.90 | 9% | | Fuel cost per gallon ($) | 2.36 | 2.84 | (17)% | | Fuel gallons consumed (thousands) | 97,427 | 101,690 | (4)% | | Full-time equivalent employees | 7,766 | 8,100 | (4)% | Reconciliations of Non-GAAP Financial Information This section provides detailed reconciliations of various non-GAAP financial measures to their most directly comparable GAAP metrics, offering supplementary insights into operational and cost performance Net Income (Loss) to Adjusted Net Income (Loss) This section reconciles GAAP net income (loss) and pre-tax income (loss) to adjusted (non-GAAP) figures for Q2 2025 and YTD, with Q2 2025 adjusted net loss at $70 million Net Income (Loss) to Adjusted Net Income (Loss) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Net income (loss), as reported | $(70) | $31 | $(113) | $5 | | Valuation allowance adjustment | — | — | — | $5 | | Adjusted net income (loss) | $(70) | $31 | $(113) | $10 | | Income (loss) before income taxes, as reported | $(70) | $32 | $(110) | $8 | | Adjusted pre-tax income (loss) | $(70) | $32 | $(110) | $8 | - Adjusted net income (loss) and adjusted pre-tax income (loss) are supplemental disclosures, considered useful metrics for measuring operating performance and widely used for industry comparisons[34] - These metrics do not reflect certain cash expenses or future capital expenditure requirements and may differ from other companies' calculations, limiting their comparability[33] EBITDA and EBITDAR Reconciliations This section reconciles GAAP net income (loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR for Q2 2025 and YTD, with Q2 2025 Adjusted EBITDA at $(54) million and Adjusted EBITDAR at $140 million EBITDA and EBITDAR Reconciliations | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | YTD 2025 ($ millions) | YTD 2024 ($ millions) | | :---------------------- | :----------- | :----------- | :------------ | :------------ | | Net income (loss) | $(70) | $31 | $(113) | $5 | | Plus (minus) adjustments: | | | | | | Interest expense | 10 | 8 | 19 | 17 | | Capitalized interest | (8) | (7) | (16) | (16) | | Interest income and other | (7) | (8) | (14) | (15) | | Income tax expense (benefit) | — | 1 | 3 | 3 | | Depreciation and amortization | 21 | 18 | 41 | 34 | | EBITDA | (54) | 43 | (80) | 28 | | Plus: Aircraft rent | 194 | 147 | 355 | 306 | | EBITDAR | 140 | 190 | 275 | 334 | | Adjusted EBITDA | (54) | 43 | (80) | 28 | | Adjusted EBITDAR | 140 | 190 | 275 | 334 | - EBITDA and Adjusted EBITDA are useful operating performance metrics widely used in the airline industry, while EBITDAR and Adjusted EBITDAR are particularly valuable for airline valuation by isolating financing, capital expenditure, and income tax impacts[35][38] - These non-GAAP metrics have limitations as they do not reflect certain cash expenses, capital expenditure requirements, working capital needs, or debt interest/principal payments, and may differ from other companies' calculations[36] CASM Reconciliations This section reconciles GAAP CASM to non-GAAP metrics like CASM (excluding fuel) and Adjusted CASM for Q2 2025 and YTD, with Q2 2025 CASM at 9.73 cents and CASM (excluding fuel) at 7.50 cents CASM Reconciliations (Three Months Ended June 30) | CASM Metrics (Three Months Ended June 30) | 2025 (¢/ASM) | 2024 (¢/ASM) | | :---------------------------------------- | :----------- | :----------- | | CASM | 9.73 | 8.98 | | Aircraft fuel impact | (2.23) | (2.74) | | CASM (excluding fuel) | 7.50 | 6.24 | | Adjusted CASM (excluding fuel) | 7.50 | 6.24 | | Adjusted CASM | 9.73 | 8.98 | | Net interest expense (income) impact | (0.05) | (0.08) | | Adjusted CASM + net interest | 9.68 | 8.90 | | CASM + net interest | 9.68 | 8.90 | - CASM (excluding fuel) and Adjusted CASM (excluding fuel) are useful for investors, providing additional metrics for management performance by excluding significant cost items (fuel) with limited management influence, thus enhancing comparability[40][42] - Adjusted CASM and CASM plus net interest metrics aid in comparing cost management and performance with peers having different capital structures and financing strategies[40][42] Earnings (Loss) per Share Reconciliations This section reconciles GAAP diluted earnings (loss) per share to adjusted diluted EPS for Q2 2025 and YTD, with Q2 2025 adjusted diluted EPS at $(0.31) Earnings (Loss) per Share Reconciliations | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Earnings (loss) per share, diluted, as reported | $(0.31) | $0.14 | $(0.50) | $0.02 | | Valuation allowance adjustment | — | — | — | $0.03 | | Adjusted earnings (loss) per share, diluted | $(0.31) | $0.14 | $(0.50) | $0.05 | - Adjusted earnings (loss) per share is a supplemental disclosure, considered a useful metric for measuring operating performance and widely used for industry comparisons[44] - This non-GAAP metric has limitations as an analytical tool, not reflecting certain cash expenses or future capital expenditure requirements, and may differ from other companies' calculations, limiting its comparability[45] Total Operating Expense (Excluding Fuel) Reconciliations This section reconciles GAAP total operating expense to total operating expense (excluding fuel) for Q2 2025 and YTD, with Q2 2025 total operating expense at $1.004 billion and adjusted total operating expense (excluding fuel) at $774 million Total Operating Expense (Excluding Fuel) Reconciliations | Metric | Q2 2025 ($ millions) | Q2 2024 ($ millions) | YTD 2025 ($ millions) | YTD 2024 ($ millions) | | :------------------------------------ | :----------- | :----------- | :------------ | :------------ | | Total operating expense, as reported | $1,004 | $948 | $1,962 | $1,844 | | Aircraft fuel | (230) | (288) | (468) | (551) | | Total operating expense (excluding fuel) | $774 | $660 | $1,494 | $1,293 | - Total operating expense (excluding fuel) is a supplemental disclosure, useful for investors by providing an additional metric for management performance, excluding significant cost items with limited management influence[46] - Excluding fuel prices aids management in understanding and analyzing non-fuel costs and core operating performance, enhancing comparability with other airlines providing similar metrics[46]