Frontier (ULCC) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating revenue rose 1% to $973 million, driven by a 13% capacity increase, but offset by lower revenue per passenger and load factor.

• Net income for Q2 2024 was $31 million, down from $71 million in Q2 2023, with a pre-tax margin of 3.3%.

• Achieved over $100 million in annual run rate cost savings from network simplification and cost initiatives.

• Adjusted fleet plan by deferring 54 Airbus aircraft deliveries from 2025–2028 to 2029–2031, moderating growth to ~10% per year through 2028.

• Launched 'The New Frontier' for clearer pricing and enhanced customer experience, with strong initial results and new crew bases in Cincinnati, Chicago, and San Juan.

Financial highlights

• Q2 2024 operating income was $25 million, down from $79 million in Q2 2023; EBITDA was $43 million, down from $91 million.

• Adjusted CASM ex-fuel was 6.24¢, down 10% year-over-year; stage-adjusted CASM ex-fuel was 5.92¢, down 16%.

• RASM for the quarter was 9.21¢, down 11% year-over-year.

• Load factor declined to 78.1% from 85.3% in Q2 2023; total revenue per passenger dropped 14% to $109.25.

• Ended the quarter with $658 million in unrestricted cash and $206 million net cash after debt.

Outlook and guidance

• Full-year 2024 adjusted CASM ex-fuel, stage-adjusted, expected to decline 1%-2% year-over-year.

• Q3 2024 adjusted pre-tax margin guidance: (3)% to (6)%, including a 4-point impact from IT and weather disruptions.

• Full-year 2024 adjusted pre-tax margin expected between (1.5)% and 1.5%.

• Capacity growth for Q3 expected at 4%-6%, and 5%-7% for the full year versus 2023; 2025 capacity growth expected in the mid to upper single digits.

• Fuel costs for Q3 expected at $2.60–$2.70/gallon; full-year at $2.70–$2.80/gallon.