Frontier Airlines Reports Third Quarter 2024 Financial Results
Frontier Airlines (ULCC) reported Q3 2024 financial results with total operating revenues of $935 million, up 6% year-over-year, on a 4% capacity increase. The company achieved a pre-tax income margin of 2.9% and adjusted pre-tax loss margin of 1.1%. Key highlights include enhanced liquidity of $781 million through a new revolving credit facility, delivery of five A321neo aircraft, and expansion of PDP financing capacity by $113 million to $478 million. Revenue per available seat mile (RASM) was 9.28 cents, showing positive inflection in the second half of the quarter. The airline maintains the youngest fleet among U.S. carriers with an average age of 4.5 years.
Frontier Airlines (ULCC) ha riportato i risultati finanziari del terzo trimestre 2024 con un totale di ricavi operativi di 935 milioni di dollari, in aumento del 6% rispetto all'anno precedente, grazie a un incremento della capacità del 4%. L'azienda ha raggiunto un margine di reddito operativo ante imposte del 2,9% e un margine di perdite rettificate ante imposte dell'1,1%. I punti salienti includono un incremento della liquidità pari a 781 milioni di dollari tramite una nuova linea di credito rotativa, la consegna di cinque aerei A321neo e l'espansione della capacità di finanziamento PDP di 113 milioni di dollari a un totale di 478 milioni di dollari. I ricavi per miglio disponibile per posto (RASM) sono stati di 9,28 centesimi, mostrando un'inflessione positiva nella seconda metà del trimestre. La compagnia aerea mantiene la flotta più giovane tra i vettori statunitensi, con un'età media di 4,5 anni.
Frontier Airlines (ULCC) reportó los resultados financieros del tercer trimestre de 2024 con ingresos operativos totales de 935 millones de dólares, un aumento del 6% en comparación con el año anterior, gracias a un incremento de capacidad del 4%. La compañía logró un margen de ingreso antes de impuestos del 2.9% y un margen de pérdida ajustado antes de impuestos del 1.1%. Los puntos destacados incluyen una liquidez mejorada de 781 millones de dólares a través de una nueva línea de crédito rotativa, la entrega de cinco aviones A321neo y la expansión de la capacidad de financiamiento PDP en 113 millones de dólares hasta alcanzar 478 millones de dólares. Los ingresos por milla disponible por asiento (RASM) fueron de 9.28 centavos, mostrando una inflexión positiva en la segunda mitad del trimestre. La aerolínea mantiene la flota más joven entre los transportistas de EE. UU., con una edad promedio de 4.5 años.
프론티어 항공(ULCC)는 2024년 3분기 재무 결과를 보고하며 총 운영 수익이 9억 3500만 달러로 지난해 대비 6% 증가했다고 발표했습니다. 이는 4%의 용량 증가에 따른 것입니다. 이 회사는 2.9%의 세전 소득 마진과 1.1%의 조정된 세전 손실 마진을 달성했습니다. 주요 하이라이트로는 새로운 회전 신용 시설을 통해 7억 8100만 달러의 유동성이 증가한 것, 다섯 대의 A321neo 항공기 인도, PDP 금융 용량이 1억 1300만 달러 증가하여 4억 7800만 달러에 달하는 것이 포함됩니다. 이용 가능한 좌석 마일당 수익(RASM)은 9.28센트로, 분기 후반기에 긍정적인 변화가 있었습니다. 이 항공사는 평균 연령 4.5세로 미국 항공사 중 가장 젊은 플릿을 보유하고 있습니다.
Frontier Airlines (ULCC) a annoncé les résultats financiers du troisième trimestre 2024, avec des revenus d'exploitation totaux de 935 millions de dollars, en hausse de 6% par rapport à l'année précédente, grâce à une augmentation de capacité de 4%. La société a atteint une marge de revenu avant impôts de 2,9% et une marge de perte avant impôts ajustée de 1,1%. Les points forts incluent une liquidité améliorée de 781 millions de dollars grâce à une nouvelle ligne de crédit renouvelable, la livraison de cinq avions A321neo et l'augmentation de la capacité de financement PDP de 113 millions de dollars pour atteindre 478 millions de dollars. Le revenu par siège disponible par mile (RASM) était de 9,28 cents, montrant une inflexion positive dans la seconde moitié du trimestre. La compagnie aérienne maintient la flotte la plus jeune parmi les transporteurs américains, avec un âge moyen de 4,5 ans.
Frontier Airlines (ULCC) hat die finanziellen Ergebnisse für das 3. Quartal 2024 bekannt gegeben, mit insgesamt operativen Einnahmen von 935 Millionen US-Dollar, was einem Anstieg von 6% im Vergleich zum Vorjahr entspricht, bei einer Kapazitätssteigerung von 4%. Das Unternehmen erreichte eine Vorsteuer-Einnahmemarge von 2,9% und eine angepasste Vorsteuer-Verlustmarge von 1,1%. Zu den wichtigsten Highlights zählen eine erhöhte Liquidität von 781 Millionen US-Dollar durch eine neue revolvierende Kreditfazilität, die Lieferung von fünf A321neo-Flugzeugen und die Erweiterung der PDP-Finanzierungskapazität um 113 Millionen US-Dollar auf insgesamt 478 Millionen US-Dollar. Der Umsatz pro verfügbarem Sitzmeilen (RASM) betrug 9,28 Cent und zeigte eine positive Wendung in der zweiten Hälfte des Quartals. Die Fluggesellschaft hat die jüngste Flotte unter den US-Transporteuren mit einem Durchschnittsalter von 4,5 Jahren.
- Revenue increased 6% YoY to $935 million
- CASM reduced by 6% compared to Q3 2023
- Enhanced liquidity position to $781 million
- Expanded PDP financing capacity by $113 million
- Received $40 million settlement from litigation
- Achieved highest proportion of fuel-efficient neo aircraft (81%) among major U.S. carriers
- Adjusted pre-tax loss margin of 1.1%
- Load factor at 78.0%, indicating capacity utilization challenges
- Stage-length adjusted RASM decreased 5% compared to 2023
- Impact from Hurricane Helene affected revenues by $5 million
Insights
The Q3 2024 results show mixed performance with some concerning trends. While total operating revenues increased by
Key positives include enhanced liquidity through a new
The company's projection of returning to double-digit adjusted pre-tax margins by summer 2025 appears optimistic given current market conditions and competitive pressures.
The strategic shift in Frontier's network and fleet planning reveals important industry adaptations. The
The deferral of aircraft deliveries from 2025-2028 to 2029-2031 is a prudent move given current market conditions, reducing near-term capital requirements. The high proportion (
Highlights:
- Total operating revenues were
, 6 percent higher than the comparable 2023 quarter, on a 4 percent increase in capacity$935 million - Revenue per available seat mile ("RASM") was
9.28 cents , 2 percent higher than the comparable 2023 quarter - RASM on a stage-length adjusted basis to 1,000 miles, a non-GAAP measure1, was
8.59 cents , 5 percent lower than the comparable 2023 quarter, while RASM on a stage-length adjusted basis to 1,000 miles inflected positive in the second half of the quarter compared to the corresponding 2023 period - Cost per available seat mile ("CASM") was
9.10 cents , a reduction of 6 percent over the comparable 2023 quarter - Adjusted CASM (excluding fuel), a non-GAAP measure, was
6.89 cents , on a 14 percent shorter average stage length; adjusted CASM (excluding fuel) on a stage-length adjusted basis to 1,000 miles, a non-GAAP measure2, was 4 percent lower than the comparable 2023 quarter - Pre-tax income margin was 2.9 percent and adjusted (non-GAAP) pre-tax loss margin was 1.1 percent, within guidance, notwithstanding the impact of Hurricane Helene
- Closed a new revolving credit facility secured by the Company's loyalty and brand-related assets which enhanced liquidity by
to a total of$205 million as of September 30, 2024$781 million - Expanded the Company's total PDP financing capacity by
to$113 million , in the aggregate, relating to aircraft on order from Airbus that are currently scheduled for delivery through 2027 and certain deliveries scheduled in 2028$478 million - Took delivery of five A321neo aircraft during the third quarter, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 81 percent as of September 30, 2024, the highest of all major
U.S. carriers - Frontier's average fleet age was approximately 4.5 years as of September 30, 2024, making it the youngest among all
U.S. -based carriers - Generated 103 available seat miles ("ASMs") per gallon, reaffirming Frontier's position as "America's Greenest Airline" as measured by fuel efficiency (ASMs per fuel gallon consumed during the third quarter, compared to all other major
U.S. carriers) - Announced 33 new routes as part of the expanded winter schedule, including the return of Washington Dulles,
Palm Springs, CA andBurlington, VT , and the addition of a new station inVail /Eagle County, CO
"Our revenue and network initiatives began to overcome oversupplied industry capacity as evidenced by RASM which inflected positive by mid-August," commented Barry Biffle, Chief Executive Officer. "We expect maturity of our network and revenue initiatives and moderating industry capacity growth to set the stage to continue to grow RASM and, along with our industry leading cost performance, to drive a return to double-digit adjusted pre-tax margins by summer 2025."
Third Quarter 2024 Select Financial Highlights
The following is a summary of third quarter select financial results, including both GAAP and adjusted (non-GAAP) metrics. Refer to "Reconciliations of Non-GAAP Financial Information" in the appendix of this release.
(unaudited, in millions, except for percentages and per share data) | |||||||
Three Months Ended September 30, | |||||||
2024 | 2023 | ||||||
As Reported | Adjusted (Non-GAAP) | As Reported | Adjusted (Non-GAAP) | ||||
Total operating revenues | $ 935 | $ 935 | $ 883 | $ 883 | |||
Total operating expenses | $ 916 | $ 954 | $ 937 | $ 937 | |||
Pre-tax income | $ 27 | $ (10) | $ (45) | $ (45) | |||
Pre-tax margin | 2.9 % | (1.1) % | (5.1) % | (5.1) % | |||
Net income | $ 26 | $ (11) | $ (32) | $ (32) | |||
Earnings per share, diluted | $ 0.11 | $ (0.05) | $ (0.14) | $ (0.14) |
Revenue Performance
Total operating revenue for the third quarter of 2024 increased 6 percent to
RASM was
Cost Performance
Total operating expenses were
Excluding the non-recurring item, adjusted total operating expenses (excluding fuel), a non-GAAP measure, were
CASM was
Earnings
Pre-tax income was
Net income was
New Credit Facilities
As previously announced, on September 26, 2024, the Company entered into a series of transactions designed to enhance liquidity and expand capacity for financing facilities intended to fund aircraft pre-delivery payments.
Specifically, the Company entered into a revolving credit facility which provides
Additionally, the Company entered into new PDP financing facilities and amended its existing PDP financing facility, which increased the Company's total PDP financing capacity to
For additional details, refer to the Form 8-K filed on September 30, 2024 and Form 10-Q filed today, both with the Securities and Exchange Commission.
Liquidity
Total liquidity as of September 30, 2024 was
In the third quarter, the Company was awarded damages related to litigation brought against a former aircraft lessor for breach of contract. A mutual settlement was executed shortly thereafter and proceeds of
Fleet
As of September 30, 2024, Frontier had a fleet of 153 Airbus single-aisle aircraft, as scheduled below, all financed through operating leases that expire between 2025 and 2036.
Equipment | Quantity | Seats |
A320neo | 82 | 186 |
A320ceo | 8 | 180 - 186 |
A321ceo | 21 | 230 |
A321neo | 42 | 240 |
Total fleet | 153 |
Frontier took delivery of five A321neo aircraft during the third quarter of 2024, all financed with sale-leaseback transactions. The Company has secured sale-leaseback financing commitments for expected deliveries through 2025 and approximately one-third of 2026 expected deliveries.
The proportion of Company's fleet comprised of the more fuel-efficient A320neo family aircraft is approximately 81 percent as of September 30, 2024, the highest of all major
As previously disclosed, in September 2024, the Company executed an amendment with Airbus which defers certain aircraft deliveries with original delivery dates in 2025 through 2028, out to 2029 through 2031, lowering fleet inductions in each of the next four years, thereby reducing the Company's financing needs and PDP commitments in the coming years.
Frontier is "America's Greenest Airline" as measured by fuel efficiency (ASMs per fuel gallon consumed during the third quarter compared to all other major
Forward Guidance
The guidance provided below is based on the Company's current estimates and is not a guarantee of future performance. This guidance is subject to significant risks and uncertainties that could cause actual results to differ materially, including the risk factors discussed in the Company's reports on file with the Securities and Exchange Commission (the "SEC"). Frontier undertakes no duty to update any forward-looking statements or estimates, except as required by applicable law. Further, this guidance excludes special items and the reconciliation of non-GAAP measures to the comparable GAAP measures because such amounts cannot be determined at this time.
Fourth Quarter 2024
The Company expects positive stage-adjusted year-over-year RASM in the fourth quarter - notwithstanding hurricane-related impacts - supported by continued moderation in capacity growth and further progress on recently deployed network and revenue initiatives. The Company estimates an impact to its projected fourth quarter adjusted (non-GAAP) pre-tax margin of approximately 2 percent (which is reflected in the guidance provided below) related to Hurricane Milton flight cancellations and demand softness for travel to hurricane-affected areas.
The current forward guidance estimates are presented in the table below. To recap, capacity is expected to decline by (2) to (3) percent over the comparable 2023 quarter. The average fuel price per gallon is expected to be in the range of
Adjusted (non-GAAP) pre-tax margin (excluding special items) is expected to be 0 to 2 percent, including storm-related impacts.
Full Year 2024
Full year 2024 adjusted (non-GAAP) CASM (excluding fuel) on a stage-length adjusted basis to 1,000 miles, is expected to be down approximately 1 percent compared to the prior year, at the low end of prior guidance (down 1 to 2 percent), driven by lower off-peak day-of-week capacity in the fourth quarter, which more closely aligns with demand trends.
Fourth Quarter | |
2024(a) | |
Capacity change (versus 4Q 2023)(b) | (2) to (3) percent |
Adjusted (non-GAAP) total operating expenses (excluding fuel)c) | |
Average fuel cost per gallon(d) | |
Effective tax rate(e) | 10 percent |
Adjusted (non-GAAP) pre-tax margin | 0 to 2 percent |
Pre-delivery deposits, net of refunds | |
Other capital expenditures(f) | |
Full Year | |
2024(a) | |
Adjusted (non-GAAP) CASM (excluding fuel), stage-length adjusted to 1,000 miles (versus 2023)(c) | ~(1) percent |
(a) | Includes guidance on certain non-GAAP measures, including adjusted total operating expenses (excluding fuel) and adjusted pre-tax margin, and which excludes, among other things, special items. The Company is unable to reconcile these forward-looking projections to GAAP as the nature or amount of such special items cannot be determined at this time. | ||||||||||||||||
(b) | Given the dynamic nature of the current demand environment, actual capacity adjustments made by the Company may be materially different than what is currently expected. | ||||||||||||||||
(c) | Amount estimated excludes fuel expense and special items, the latter of which are not estimable at this time. The amount takes into consideration the expected capacity change versus the prior year quarter. | ||||||||||||||||
(d) | Estimated fuel cost per gallon is based upon the blended jet fuel curve on October 24, 2024 and is inclusive of estimated fuel taxes and into-plane fuel costs. | ||||||||||||||||
(e) | The Company's actual tax rate may differ from the forecasted rate due to varying factors which may include, but are not limited to, the composition of items of income and expense recognized, including the amount of non-deductible or other similar items including but not limited to any valuation allowance adjustments. | ||||||||||||||||
(f) | Other capital expenditures estimate includes capitalized heavy maintenance. |
Conference Call
The Company will host a conference call to discuss third quarter 2024 results today, October 29, 2024, at 11:30 a.m. Eastern Time (
About Frontier Airlines
Frontier Airlines, Inc., a subsidiary of Frontier Group Holdings, Inc. (Nasdaq: ULCC), is committed to "Low Fares Done Right." Headquartered in
End Notes
1 Amount represents the stage-length adjusted to 1,000 miles: RASM * Square root (stage length / 1,000).
2 Amount represents the stage-length adjusted to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000).
Cautionary Statement Regarding Forward-Looking Statements and Information
Certain statements in this release should be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company's current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Words such as "expects," "will," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this Current Report on Form 8-K are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law.
Actual results could differ materially from these forward-looking statements due to numerous risks and uncertainties relating to the Company's operations and business environment including, without limitation, the following: unfavorable economic and political conditions in the states where the Company operates and globally, including an inflationary environment and potential recession, and the resulting impact on cost inputs and/or consumer demand for air travel; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity; disruptions to the Company's flight operations, including due to factors beyond the Company's control, such as adverse weather events or air traffic controller staffing shortages; the Company's ability to attract and retain qualified personnel at reasonable costs; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel, including as a result of the war between
Frontier Group Holdings, Inc. | |||||||||||
Three Months Ended | Percent Change | Nine Months Ended | Percent Change | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Operating revenues: | |||||||||||
Passenger | $ 910 | $ 862 | 6 % | $ 2,705 | $ 2,637 | 3 % | |||||
Other | 25 | 21 | 19 % | 68 | 61 | 11 % | |||||
Total operating revenues | 935 | 883 | 6 % | 2,773 | 2,698 | 3 % | |||||
Operating expenses: | |||||||||||
Aircraft fuel | 261 | 291 | (10) % | 812 | 827 | (2) % | |||||
Salaries, wages and benefits | 236 | 221 | 7 % | 713 | 635 | 12 % | |||||
Aircraft rent | 177 | 150 | 18 % | 483 | 429 | 13 % | |||||
Station operations | 164 | 133 | 23 % | 464 | 381 | 22 % | |||||
Maintenance, materials and repairs | 53 | 48 | 10 % | 144 | 145 | (1) % | |||||
Sales and marketing | 46 | 41 | 12 % | 133 | 125 | 6 % | |||||
Depreciation and amortization | 19 | 13 | 46 % | 53 | 36 | 47 % | |||||
Other operating | (40) | 40 | N/M | (42) | 120 | N/M | |||||
Total operating expenses | 916 | 937 | (2) % | 2,760 | 2,698 | 2 % | |||||
Operating income (loss) | 19 | (54) | N/M | 13 | — | N/M | |||||
Other income (expense): | |||||||||||
Interest expense | (10) | (8) | 25 % | (27) | (21) | 29 % | |||||
Capitalized interest | 8 | 7 | 14 % | 24 | 19 | 26 % | |||||
Interest income and other | 10 | 10 | — % | 25 | 28 | (11) % | |||||
Total other income (expense) | 8 | 9 | (11) % | 22 | 26 | (15) % | |||||
Income (loss) before income taxes | 27 | (45) | N/M | 35 | 26 | 35 % | |||||
Income tax expense (benefit) | 1 | (13) | N/M | 4 | — | N/M | |||||
Net income (loss) | $ 26 | $ (32) | N/M | $ 31 | $ 26 | 19 % | |||||
Earnings (loss) per share: | |||||||||||
Basic (a) | $ 0.11 | $ (0.14) | N/M | $ 0.14 | $ 0.12 | 17 % | |||||
Diluted (a) | $ 0.11 | $ (0.14) | N/M | $ 0.14 | $ 0.12 | 17 % | |||||
Weighted-average common shares outstanding: | |||||||||||
Basic (a) | 224,484,159 | 220,837,983 | 2 % | 224,044,697 | 219,483,736 | 2 % | |||||
Diluted (a) | 225,716,252 | 220,837,983 | 2 % | 226,115,706 | 220,638,883 | 2 % |
N/M = Not meaningful | |
(a) | In periods of net income, the dilutive impact of the 3.1 million warrants outstanding relating to funding provided pursuant to the CARES Act and related legislation, any non-participating options and unvested restricted stock units are included in the diluted earnings per share calculations. In addition, most of the Company's 2.2 million outstanding options are participating securities and are therefore not expected to be part of the Company's diluted share count under the two-class method until they are exercised, but, in periods of net income, are included as an adjustment to the numerator of the Company's earnings per share calculation as they are eligible to participate in the Company's earnings. The participating securities impact has been subtracted from periods presented with positive net income in the computation of basic and diluted earnings per share. |
Frontier Group Holdings, Inc. Selected Operating Statistics (unaudited) | |||||||||||
Three Months Ended | Percent | Nine Months Ended | Percent | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Operating statistics (a) | |||||||||||
Available seat miles ("ASMs") (millions) | 10,075 | 9,697 | 4 % | 30,073 | 27,809 | 8 % | |||||
Departures | 56,725 | 48,627 | 17 % | 162,567 | 136,747 | 19 % | |||||
Average stage length (miles) | 856 | 996 | (14) % | 901 | 1,028 | (12) % | |||||
Block hours | 140,348 | 133,305 | 5 % | 419,911 | 385,129 | 9 % | |||||
Average aircraft in service | 150 | 128 | 17 % | 144 | 124 | 16 % | |||||
Aircraft – end of period | 153 | 134 | 14 % | 153 | 134 | 14 % | |||||
Average daily aircraft utilization (hours) | 10.2 | 11.3 | (10) % | 10.6 | 11.4 | (7) % | |||||
Passengers (thousands) | 8,834 | 7,697 | 15 % | 24,738 | 22,119 | 12 % | |||||
Average seats per departure | 206 | 200 | 3 % | 204 | 198 | 3 % | |||||
Revenue passenger miles ("RPMs") (millions) | 7,855 | 7,755 | 1 % | 22,962 | 22,981 | — % | |||||
Load Factor | 78.0 % | 80.0 % | (2.0) pts | 76.4 % | 82.6 % | (6.2) pts | |||||
Fare revenue per passenger ($) | 38.70 | 39.17 | (1) % | 41.26 | 43.65 | (5) % | |||||
Non-fare passenger revenue per passenger ($) | 64.38 | 72.77 | (12) % | 68.09 | 75.57 | (10) % | |||||
Other revenue per passenger ($) | 2.75 | 2.77 | (1) % | 2.72 | 2.74 | (1) % | |||||
Total ancillary revenue per passenger ($) | 67.13 | 75.54 | (11) % | 70.81 | 78.31 | (10) % | |||||
Total revenue per passenger ($) | 105.83 | 114.71 | (8) % | 112.07 | 121.96 | (8) % | |||||
Total revenue per available seat mile ("RASM") (¢) | 9.28 | 9.10 | 2 % | 9.22 | 9.70 | (5) % | |||||
Cost per available seat mile ("CASM") (¢) | 9.10 | 9.66 | (6) % | 9.18 | 9.70 | (5) % | |||||
CASM (excluding fuel) (¢) (b) | 6.51 | 6.66 | (2) % | 6.48 | 6.73 | (4) % | |||||
CASM + net interest (¢) (b) | 9.02 | 9.56 | (6) % | 9.10 | 9.61 | (5) % | |||||
Adjusted CASM (¢) (b) | 9.48 | 9.66 | (2) % | 9.30 | 9.70 | (4) % | |||||
Adjusted CASM (excluding fuel) (¢) (b) | 6.89 | 6.66 | 3 % | 6.60 | 6.72 | (2) % | |||||
Adjusted CASM (excluding fuel), stage-length adjusted to 1,000 miles (¢) (b)(c) | 6.37 | 6.65 | (4) % | 6.27 | 6.81 | (8) % | |||||
Adjusted CASM + net interest (¢) (b) | 9.39 | 9.56 | (2) % | 9.23 | 9.60 | (4) % | |||||
Fuel cost per gallon ($) | 2.67 | 3.08 | (13) % | 2.81 | 3.07 | (8) % | |||||
Fuel gallons consumed (thousands) | 97,767 | 94,459 | 4 % | 289,114 | 269,425 | 7 % | |||||
Full-time equivalent employees | 8,011 | 6,959 | 15 % | 8,011 | 6,959 | 15 % |
(a) | Figures may not recalculate due to rounding. |
(b) | These metrics are not calculated in accordance with GAAP. For the reconciliation to corresponding GAAP measures, see "Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest." |
(c) | Stage-length adjusted to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000). |
Reconciliations of Non-GAAP Financial Information
The Company is providing below a reconciliation of GAAP financial information to the non-GAAP financial information provided. The non-GAAP financial information is included to provide supplemental disclosures because the Company believes they are useful additional indicators of, among other things, its operating and cost performance. These non-GAAP financial measures have limitations as analytical tools. Because of these limitations, determinations of the Company's operating performance or CASM excluding unrealized gains and losses, special items or other items should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. These non-GAAP financial measures may be presented on a different basis than other companies using similarly titled non-GAAP financial measures.
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net income (loss), as reported | $ 26 | $ (32) | $ 31 | $ 26 | |||
Non-GAAP Adjustments: | |||||||
Legal settlement(a) | (38) | — | (38) | — | |||
Transaction and merger-related costs(b) | — | — | — | 1 | |||
Write-off of deferred financing costs(c) | 1 | — | 1 | — | |||
Pre-tax impact | (37) | — | (37) | 1 | |||
Tax benefit (expense), related to non-GAAP adjustments | — | — | — | — | |||
Valuation allowance(d) | — | — | 5 | — | |||
Net income (loss) impact | $ (37) | $ — | (32) | 1 | |||
Adjusted net income (loss)(e) | $ (11) | $ (32) | $ (1) | $ 27 | |||
Income (loss) before income taxes, as reported | $ 27 | $ (45) | $ 35 | $ 26 | |||
Pre-tax impact | (37) | — | (37) | 1 | |||
Adjusted pre-tax income (loss)(e) | $ (10) | $ (45) | $ (2) | $ 27 |
(a) | The Company reached a legal settlement with a former lessor for breach of contract for a total of |
(b) | Represents |
(c) | In September 2024, the Company reduced its existing capacity of the PDP financing facility from |
(d) | During the nine months ended September 30, 2024, a |
(e) | Adjusted net income (loss) and adjusted pre-tax income (loss) are included as a supplemental disclosure because the Company believes they are useful indicators of its operating performance. Derivations of net income (loss) and pre-tax income (loss) are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties, in comparing the operating performance of companies in the airline industry. |
Adjusted net income (loss) and adjusted pre-tax income (loss) have limitations as analytical tools. Adjusted net income (loss) and adjusted pre-tax income (loss) do not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of the Company's ongoing operations and do not reflect the Company's cash expenditures, or future requirements, for capital expenditures or contractual commitments, and other companies in the industry may calculate adjusted net income (loss) and adjusted pre-tax income (loss) differently than the Company does, limiting their usefulness as comparative measures. Because of these limitations, adjusted net income (loss) and adjusted pre-tax income (loss) should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of adjusted net income (loss) and adjusted pre-tax income (loss), including adjusted pre-tax margin, are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of net income, including adjusted net income (loss) and adjusted pre-tax income (loss), as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, adjusted net income (loss) and adjusted pre-tax income (loss) have significant limitations which affect their use as indicators of the Company's profitability. Accordingly, you are cautioned not to place undue reliance on this information. |
Reconciliation of Total Operating Expenses to Total Operating Expenses (excluding fuel), Adjusted | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Total operating expenses, as reported(a) | $ 916 | $ 937 | $ 2,760 | $ 2,698 | |||
Legal settlement | 38 | — | 38 | — | |||
Transaction and merger-related costs | — | — | — | (1) | |||
Adjusted total operating expenses(b) | 954 | 937 | 2,798 | 2,697 | |||
Aircraft fuel | (261) | (291) | (812) | (827) | |||
Adjusted total operating expenses (excluding fuel)(b) | $ 693 | $ 646 | $ 1,986 | $ 1,870 | |||
Total operating expenses, as reported | $ 916 | $ 937 | $ 2,760 | $ 2,698 | |||
Aircraft fuel | (261) | (291) | (812) | (827) | |||
Total operating expenses (excluding fuel)(b) | $ 655 | $ 646 | $ 1,948 | $ 1,871 |
(a) | See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-tax Income (Loss)" above for discussion on adjusting items. |
(b) | Total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) are included as supplemental disclosures because the Company believes they are useful indicators of its operating performance. Derivations of total operating expenses are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties, in comparing the operating performance of companies in the airline industry. |
Total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) have limitations as analytical tools and other companies in the industry may calculate total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) differently than the Company does, limiting their usefulness as comparative measures. Because of these limitations, total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of total operating expenses, including total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, total operating expenses (excluding fuel), adjusted total operating expenses and adjusted total operating expenses (excluding fuel) have significant limitations which affect their use as an indicator of the Company's profitability. Accordingly, you are cautioned not to place undue reliance on this information. |
Reconciliation of Net Income (Loss) to EBITDA and EBITDAR and to Adjusted EBITDA and Adjusted | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net income (loss) | $ 26 | $ (32) | $ 31 | $ 26 | |||
Plus (minus): | |||||||
Interest expense | 10 | 8 | 27 | 21 | |||
Capitalized interest | (8) | (7) | (24) | (19) | |||
Interest income and other | (10) | (10) | (25) | (28) | |||
Income tax expense (benefit) | 1 | (13) | 4 | — | |||
Depreciation and amortization | 19 | 13 | 53 | 36 | |||
EBITDA(a) | 38 | (41) | 66 | 36 | |||
Plus: Aircraft rent | 177 | 150 | 483 | 429 | |||
EBITDAR(b) | $ 215 | $ 109 | $ 549 | $ 465 | |||
EBITDA(a) | $ 38 | $ (41) | $ 66 | $ 36 | |||
Plus (minus)(c): | |||||||
Legal settlement | (38) | — | (38) | — | |||
Transaction and merger-related costs | — | — | — | 1 | |||
Adjusted EBITDA(a) | — | (41) | 28 | 37 | |||
Plus: Aircraft rent | 177 | 150 | 483 | 429 | |||
Adjusted EBITDAR(b) | $ 177 | $ 109 | $ 511 | $ 466 |
(a) | EBITDA and adjusted EBITDA are included as supplemental disclosures because the Company believes they are useful indicators of its operating performance. Derivations of EBITDA are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties, in comparing the operating performance of companies in the industry. |
EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of its ongoing operations; the Company's cash expenditures, or future requirements, for capital expenditures or contractual commitments; changes in, or cash requirements for, the Company's working capital needs; or the interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's indebtedness or possible cash requirements related to its warrants. Further, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements. Other companies in the airline industry may calculate EBITDA and adjusted EBITDA differently than the Company does, limiting their usefulness as comparative measures. Because of these limitations, EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of EBITDA and adjusted EBITDA are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of EBITDA, including adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies. | |
For the foregoing reasons, each of EBITDA and adjusted EBITDA have significant limitations which affect its use as an indicator of the Company's profitability. Accordingly, you are cautioned not to place undue reliance on this information. | |
(b) | EBITDAR and adjusted EBITDAR are included as supplemental disclosures because the Company believes they are useful solely as valuation metrics for airlines as their calculations isolate the effects of financing in general, the accounting effects of capital spending and acquisitions (primarily aircraft, which may be acquired directly, directly subject to acquisition debt, by capital lease or by operating lease, each of which is presented differently for accounting purposes), and income taxes, which may vary significantly between periods and for different airlines for reasons unrelated to the underlying value of a particular airline. However, EBITDAR and adjusted EBITDAR are not determined in accordance with GAAP, are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, EBITDAR and adjusted EBITDAR, as presented, may not be directly comparable to similarly titled measures presented by other companies. In addition, EBITDAR and adjusted EBITDAR should not be viewed as a measure of overall performance since they exclude aircraft rent, which is a normal, recurring cash operating expense that is necessary to operate the business. Accordingly, you are cautioned not to place undue reliance on this information. |
(c) | See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-tax Income (Loss)" above for discussion on adjusting items. |
Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, | |||||||
Three Months Ended September 30, | |||||||
2024 | 2023 | ||||||
($ in millions) | Per ASM (¢) | ($ in millions) | Per ASM (¢) | ||||
CASM(a)(b) | 9.10 | 9.66 | |||||
Aircraft fuel | (261) | (2.59) | (291) | (3.00) | |||
CASM (excluding fuel)(c) | 6.51 | 6.66 | |||||
Legal settlement | 38 | 0.38 | — | — | |||
Adjusted CASM (excluding fuel)(c) | 6.89 | 6.66 | |||||
Aircraft fuel | 261 | 2.59 | 291 | 3.00 | |||
Adjusted CASM(d) | 9.48 | 9.66 | |||||
Net interest expense (income) | (8) | (0.08) | (9) | (0.10) | |||
Write-off of deferred financing costs | (1) | (0.01) | — | — | |||
Adjusted CASM + net interest(e) | 9.39 | 9.56 | |||||
CASM | 9.10 | 9.66 | |||||
Net interest expense (income) | (8) | (0.08) | (9) | (0.10) | |||
CASM + net interest(e) | 9.02 | 9.56 |
(a) | Cost per ASM figures may not recalculate due to rounding. |
(b) | See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-tax Income (Loss)" above for discussion on adjusting items. |
(c) | CASM (excluding fuel) and adjusted CASM (excluding fuel) are included as supplemental disclosures because the Company believes that excluding aircraft fuel is useful to investors as it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. The price of fuel, over which the Company has limited control, impacts the comparability of period-to-period financial performance, and excluding allows management an additional tool to understand and analyze the Company's non-fuel costs and core operating performance, and increases comparability with other airlines that also provide a similar metric. CASM (excluding fuel) and adjusted CASM (excluding fuel) are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. |
(d) | Adjusted CASM is included as supplemental disclosure because the Company believes it is a useful metric to properly compare the Company's cost management and performance to other peers, as derivations of adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, the Company believes this metric is useful because it removes certain items that may not be indicative of base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. |
(e) | Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because the Company believes they are useful metrics to properly compare its cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, the Company believes these metrics are useful because they remove certain items that may not be indicative of base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. |
Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, | |||||||
Nine Months Ended September 30, | |||||||
2024 | 2023 | ||||||
($ in millions) | Per ASM (¢) | ($ in millions) | Per ASM (¢) | ||||
CASM(a)(b) | 9.18 | 9.70 | |||||
Aircraft fuel | (812) | (2.70) | (827) | (2.97) | |||
CASM (excluding fuel)(c) | 6.48 | 6.73 | |||||
Legal settlement | 38 | 0.12 | — | — | |||
Transaction and merger-related costs | — | — | (1) | (0.01) | |||
Adjusted CASM (excluding fuel)(c) | 6.60 | 6.72 | |||||
Aircraft fuel | 812 | 2.70 | 827 | 2.98 | |||
Adjusted CASM(d) | 9.30 | 9.70 | |||||
Net interest expense (income) | (22) | (0.08) | (26) | (0.10) | |||
Write-off of deferred financing costs | (1) | 0.01 | — | — | |||
Adjusted CASM + net interest(e) | 9.23 | 9.60 | |||||
CASM | 9.18 | 9.70 | |||||
Net interest expense (income) | (22) | (0.08) | (26) | (0.09) | |||
CASM + net interest(e) | 9.10 | 9.61 |
(a) | Cost per ASM figures may not recalculate due to rounding. |
(b) | See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-tax Income (Loss)" above for discussion on adjusting items. |
(c) | CASM (excluding fuel) and adjusted CASM (excluding fuel) are included as supplemental disclosures because the Company believes that excluding aircraft fuel is useful to investors as it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. The price of fuel, over which the Company has limited control, impacts the comparability of period-to-period financial performance, and excluding allows management an additional tool to understand and analyze the Company's non-fuel costs and core operating performance, and increases comparability with other airlines that also provide a similar metric. CASM (excluding fuel) and adjusted CASM (excluding fuel) are not determined in accordance with GAAP and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. |
(d) | Adjusted CASM is included as supplemental disclosure because the Company believes it is a useful metric to properly compare the Company's cost management and performance to other peers, as derivations of adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by the Company's management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, the Company believes this metric is useful because it removes certain items that may not be indicative of base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. |
(e) | Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because the Company believes they are useful metrics to properly compare its cost management and performance to other peers that may have different capital structures and financing strategies, particularly as it relates to financing primary operating assets such as aircraft and engines. Additionally, the Company believes these metrics are useful because they remove certain items that may not be indicative of base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. |
Reconciliation of Earnings (Loss) per Share, Diluted to Adjusted Earnings (Loss) per Share, Diluted | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Earnings (loss) per share, diluted, as reported(a)(b) | $ 0.11 | $ (0.14) | $ 0.14 | $ 0.12 | |||
Legal settlement | (0.17) | — | (0.17) | — | |||
Transaction and merger-related costs | — | — | — | — | |||
Write-off of deferred financing costs | 0.01 | — | 0.01 | — | |||
Tax benefit (expense), related to non-GAAP adjustments | — | — | — | — | |||
Valuation allowance | — | — | 0.02 | — | |||
Adjusted earnings (loss) per share, diluted(c) | $ (0.05) | $ (0.14) | $ — | $ 0.12 |
(a) | See "Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-tax Income (Loss)" above for discussion on adjusting items. |
(b) | Cost per share figures may not recalculate due to rounding. |
(c) | Adjusted earnings (loss) per share is included as a supplemental disclosure because the Company believes it is a useful indicator of operating performance. Derivations of net income are well-recognized performance measurements in the airline industry that are frequently used by management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the industry. |
Adjusted earnings (loss) per share has limitations as an analytical tool. Adjusted earnings (loss) per share does not reflect the impact of certain cash charges resulting from matters the Company considers not to be indicative of ongoing operations and does not reflect the cash expenditures, or future requirements, for capital expenditures or contractual commitments, and other companies in the industry may calculate Adjusted earnings (loss) per share differently than the Company does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted earnings (loss) per share should not be considered in isolation from or as a substitute for performance measures calculated in accordance with GAAP. In addition, because derivations of adjusted net income are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of net income, including Adjusted earnings (loss) per share, as presented may not be directly comparable to similarly titled measures presented by other companies. For the foregoing reasons, Adjusted earnings (loss) per share has significant limitations which affect its use as an indicator of profitability. Accordingly, you are cautioned not to place undue reliance on this information. | |
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SOURCE Frontier Group Holdings, Inc.
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