Frontier's 2026 outlook points to potential profit on deep cost cuts

Feb 11 (Reuters) - Frontier Group, parent ‌of budget carrier ​Frontier ​Airlines, on Wednesday issued a forecast that pointed to a possible profit for the year, while analysts expect a loss, as it bets on ‌tighter cost controls.

Shares of the carrier rose 4.4% in early trading, ⁠after it also said it would terminate certain aircraft leases early and defer deliveries of some jets ‌to trim capacity and preserve cash.

The ‌airline forecast a 2026 range spanning a loss of 40 cents per share to a profit of 50 cents per share, on an adjusted basis, with ​the midpoint pointing to a 5-cent profit. Analysts on average estimated a loss of 1 cent per share, according to data compiled by LSEG.

Frontier's unusually wide forecast ⁠range lays bare just how uncertain it has become for carriers to gauge near-term demand, particularly for economy-class seats, ​as cost-conscious travelers pull back amid a more challenging economic backdrop.

Budget airlines are also grappling with elevated aircraft maintenance, fuel and crew ​costs, even as rivals with robust premium offerings ‌capitalize on higher-margin fares.

Frontier has been betting on network changes, capacity cuts and improved product offerings to boost its earnings.

For the fourth ⁠quarter, the Denver-based airline reported an adjusted profit per share of 23 cents, while the Street estimated 12 cents.

Frontier also said it has reached an agreement with aircraft lessor AerCap to ⁠terminate leases on 24 jets currently in service that were otherwise set to expire over the next ​two to eight years.

At the same time, it has struck a deal with Airbus SAS to defer the induction of 69 A320neo jets, which were contractually expected to be delivered between 2027 ‌and 2030.

Frontier ended 2025 with $874 million in total liquidity, including $220 million from a recently expanded revolving credit facility.

It even plans to ‌roll out first-class style seating in early 2026 as part of its efforts to add ⁠higher-margin products beyond its traditional all-economy ‌layout.

The airline has said it ​is aiming to double its loyalty revenue to about $6 per passenger by the end of 2026.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by ‌Shilpi Majumdar)

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