Passenger growth at Frontier
Frontier Airlines reported a 71% airfare increase for the third quarter, but higher ticket revenue did not prevent a deeper loss as fuel costs climbed even faster. The country’s largest budget airline lost $104 million, compared with $77 million a year earlier, despite carrying more passengers.
Key takeaways
Frontier’s average fare revenue reached $67.82 per passenger.
Quarterly passenger traffic grew 18%, topping 9.8 million.
The airline’s fuel bill jumped 82% to $425 million.
Frontier Airlines’ airfare increase lifts revenue per passenger
Frontier’s average fare revenue per passenger rose to $67.82 from $39.74 a year earlier. The airline raised fares as it sought to pass along a still larger increase in jet fuel prices.
Including fees, total revenue per passenger increased 30% to $138.22. That measure includes charges such as those for checked bags and carry-on luggage, rather than ticket revenue alone.
Passenger growth at Frontier
Frontier carried more than 9.8 million passengers during the quarter, an 18% increase from a year earlier. The total represented an additional 1.5 million passengers despite the higher fares.
The airline had already overtaken Spirit Airlines as the largest discount carrier in the United States before Spirit collapsed in May.
Fuel costs outpace the fare rise
Frontier’s third-quarter loss widened to $104 million from $77 million a year earlier, while its fuel bill rose 82% to $425 million. The increase in fuel spending exceeded the percentage rise in airfare.
The pressure extends beyond Frontier. Carriers including Delta Air Lines have said customers are largely continuing to book despite higher ticket prices, while record jet fuel prices erode profits. Fuel is airlines’ biggest expense after labor.
Fourth-quarter forecast spans a loss and a gain
Frontier forecast fourth-quarter adjusted results ranging from a loss of 15 cents per share to earnings of 5 cents per share. The range includes both a loss and a profit, rather than a firm projection of profitability.
Frontier shares rose about 6% in early trading on Wednesday, October 28, following the earnings report.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.