ULCC Q3 2024 Earnings

Call Details

• Call Title: Frontier Group Holdings, Inc. Q3 2024 Earnings Call
• Date: October 29, 2024 at 3:30 PM UTC
• Management Team:
  • Barry Biffle (Chief Executive Officer)
  • Jimmy Dempsey (President)
  • Mark Mitchell (Chief Financial Officer)
  • Robert Schroeder (Chief Commercial Officer)
  • David Erdman (Senior Director of Investor Relations)

Call Summary

Financial Performance

• Total operating revenue increased 6% year over year to $935 million on capacity growth of 4%.
• RASM for the quarter was 9.28 cents on a consolidated basis.
• Third quarter pre-tax income was $27 million while adjusted pre-tax loss was $10 million, yielding an adjusted pre-tax margin loss of 1.1%.
• Net income for the quarter was $26 million while adjusted net loss was $11 million, with the adjusted deficit widened by non-deductible tax items and year-to-date adjusted pre-tax loss near break-even.
• Fuel expense was $261 million, down 10% versus the 2023 quarter, at an average cost of $2.67 per gallon.
• Adjusted CASM X fuel was $6.89, or $6.37 on a stage-adjusted basis, which was 4% lower than the 2023 quarter, and the company reported greater than $100 million of annual run rate savings since the program inception.

Guidance

• Fourth quarter non-fuel operating expenses are expected to be $725 million to $745 million, including approximately $10 million of estimated hurricane-related inefficiencies and temporary excess crew costs.
• The average fuel price per gallon for the fourth quarter is expected to be $2.40 to $2.50 based on the fuel curve as of October 24, 2024.
• Adjusted pre-tax margin for the fourth quarter is expected to be break-even to 2%, which includes an estimated 2 percentage point impact related to weather.
• Expected full-year 2024 adjusted pre-tax margin is break-even to modestly above break-even after the Q4 estimate.
• Full-year stage-adjusted CASM X fuel for 2024 is expected to be down approximately 1% versus the prior year, described as the low end of prior guidance.
• No formal numerical guidance was provided for 2025 unit costs or TRASM during the call, and management stated it is still working through next year’s guide.