Frontier Group Holdings, Inc. (ULCC) has reduced scheduled capacity

Frontier Group Holdings, Inc. (NASDAQ: ULCC)

Frontier Group Holdings, Inc. (the “Company”), parent company of Frontier Airlines, Inc. (“Frontier”), is providing an update to its previously issued guidance for the first quarter of 2025, as originally disclosed in connection with the Company’s earnings release issued February 7, 2025.

Frontier currently expects revenue growth in the first quarter of 2025 of approximately five percent on capacity growth of approximately five percent, both compared to the corresponding prior year quarter. Revenue growth is anticipated to be lower than expected due to weakened demand in March, resulting in fare discounting and promotions across the industry, amplified by the close-in nature of Frontier’s bookings. The weakened demand environment is evidenced by the 17 point decline in The Conference Board Consumer Confidence Index from 109.5 at year-end 2024 to 92.9 in March.

In response to the current environment, the Company has reduced scheduled capacity in the second quarter of 2025, focusing the reductions on off-peak days of the week, and will closely monitor the demand environment and make any further adjustments to capacity and related costs, as appropriate. Capacity in the second quarter of 2025 is currently expected to be down low single digits compared to the corresponding prior year quarter. The Company expects that its capacity optimization along with the strength of its business model - underpinned by a significant total cost advantage to the industry, based on adjusted cost per available seat mile ("CASM") + net interest, a non-GAAP measure, for full-year 20241 - will provide resiliency in navigating through the current environment.

First quarter 2025 adjusted (non-GAAP) pre-tax loss margin is expected to be approximately five percent. Adjusted (non-GAAP) net loss is expected to include a net tax expense,2 resulting in an adjusted (non-GAAP) loss per share for the first quarter of 2025 that is expected to be in the range of $0.20 to $0.24 assuming approximately 227 million weighted-average shares outstanding. The Company is unable to reaffirm full-year 2025 guidance due to the uncertain environment.

Total liquidity as of March 31, 2025 was approximately $885 million, consisting of unrestricted cash and cash equivalents and $205 million of availability from the Company’s undrawn revolving credit facility. Given the uncertainty in the current environment, the Company is focused on maximizing its liquidity through diligent management of the controllable elements of the business, including, but not limited to, optimization of capacity and related costs, and discretionary capital spending.

These results are preliminary and final results for the quarter may change. These preliminary results are based upon the Company's current estimates and are subject to the completion of the financial closing procedures.

Frontier expects to release first quarter 2025 financial results on May 1, 2025 after the market closes and host a live webcast with analysts the same day at 4:30pm Eastern Time. Details for the conference call will be provided at a later date.

The information in this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing, except as expressly set forth by reference in such filing.

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