Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40304 | |
Entity Registrant Name | Frontier Group Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-3681866 | |
Entity Address, Address Line One | 4545 Airport Way | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80239 | |
City Area Code | 720 | |
Local Phone Number | 374-4550 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | ULCC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 217,763,933 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001670076 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 674 | $ 918 |
Accounts receivable, net | 65 | 50 |
Supplies, net | 54 | 29 |
Other current assets | 99 | 40 |
Total current assets | 892 | 1,037 |
Property and equipment, net | 213 | 186 |
Operating lease right-of-use assets | 2,405 | 2,426 |
Pre-delivery deposits for flight equipment | 346 | 260 |
Aircraft maintenance deposits | 104 | 98 |
Intangible assets, net | 28 | 29 |
Other assets | 258 | 199 |
Total assets | 4,246 | 4,235 |
Liabilities and stockholders’ equity | ||
Accounts payable | 78 | 86 |
Air traffic liability | 296 | 273 |
Frequent flyer liability | 13 | 13 |
Current maturities of long-term debt, net | 193 | 127 |
Current maturities of operating leases | 451 | 444 |
Other current liabilities | 421 | 383 |
Total current liabilities | 1,452 | 1,326 |
Long-term debt, net | 228 | 287 |
Long-term operating leases | 1,973 | 1,991 |
Long-term frequent flyer liability | 33 | 41 |
Other long-term liabilities | 92 | 60 |
Total liabilities | 3,778 | 3,705 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $0.001 par value per share, with 217,762,284 and 217,065,096 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 0 | 0 |
Additional paid-in capital | 389 | 381 |
Retained earnings | 82 | 159 |
Accumulated other comprehensive income (loss) | (3) | (10) |
Total stockholders’ equity | 468 | 530 |
Total liabilities and stockholders’ equity | $ 4,246 | $ 4,235 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, stated par (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 217,762,284 | 217,065,096 |
Common stock outstanding (in shares) | 217,762,284 | 217,065,096 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating revenues: | ||||
Total operating revenues | $ 906,000 | $ 630,000 | $ 2,420,000 | $ 1,451,000 |
Operating expenses: | ||||
Aircraft fuel | 306,000 | 166,000 | 856,000 | 389,000 |
Salaries, wages and benefits | 182,000 | 161,000 | 528,000 | 454,000 |
Aircraft rent | 140,000 | 128,000 | 401,000 | 399,000 |
Station operations | 101,000 | 108,000 | 326,000 | 285,000 |
Sales and marketing | 42,000 | 33,000 | 120,000 | 80,000 |
Maintenance, materials and repairs | 42,000 | 29,000 | 107,000 | 82,000 |
Depreciation and amortization | 8,000 | 10,000 | 36,000 | 28,000 |
CARES Act credits | 0 | (72,000) | 0 | (295,000) |
Transaction and merger-related costs, net | (12,000) | 0 | 8,000 | 0 |
Other operating | 41,000 | 24,000 | 128,000 | 60,000 |
Total operating expenses | 850,000 | 587,000 | 2,510,000 | 1,482,000 |
Operating income (loss) | 56,000 | 43,000 | (90,000) | (31,000) |
Other income (expense): | ||||
Interest expense | (4,000) | (4,000) | (16,000) | (31,000) |
Capitalized interest | 3,000 | 1,000 | 6,000 | 3,000 |
Interest income and other | 3,000 | 1,000 | 5,000 | 1,000 |
Total other income (expense) | 2,000 | (2,000) | (5,000) | (27,000) |
Income (loss) before income taxes | 58,000 | 41,000 | (95,000) | (58,000) |
Income tax expense (benefit) | 27,000 | 18,000 | (18,000) | (9,000) |
Net income (loss) | $ 31,000 | $ 23,000 | $ (77,000) | $ (49,000) |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.13 | $ 0.10 | $ (0.36) | $ (0.23) |
Diluted (in dollars per share) | $ 0.13 | $ 0.10 | $ (0.36) | $ (0.23) |
Passenger | ||||
Operating revenues: | ||||
Total operating revenues | $ 883,000 | $ 610,000 | $ 2,361,000 | $ 1,408,000 |
Other | ||||
Operating revenues: | ||||
Total operating revenues | $ 23,000 | $ 20,000 | $ 59,000 | $ 43,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 31,000 | $ 23,000 | $ (77,000) | $ (49,000) |
Other comprehensive loss | ||||
Unrealized gains (losses) and amortization from cash flow hedges, net of deferred tax benefit (expense) of $(2) for the three and nine months ended September 30, 2022 and less than $(1) for the three and nine months ended September 30, 2021. (Note 5) | 7,000 | 0 | 7,000 | 1,000 |
Other comprehensive income (loss) | 7,000 | 0 | 7,000 | 1,000 |
Comprehensive income (loss) | $ 38,000 | $ 23,000 | $ (70,000) | $ (48,000) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized losses from cash flow hedges net of adjustment for de-designation of fuel hedges, tax benefit/(expense) | $ (2) | $ (1) | $ (2) | $ (1) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (77,000,000) | $ (49,000,000) |
Deferred income taxes | (18,000,000) | (9,000,000) |
Depreciation and amortization | 36,000,000 | 28,000,000 |
Gains recognized on sale-leaseback transactions | (49,000,000) | (55,000,000) |
Loss on extinguishment of debt | 7,000,000 | 0 |
Warrant liability unrealized loss | 0 | 22,000,000 |
Stock-based compensation | 11,000,000 | 8,000,000 |
Amortization of swaption cash flow hedges, net of tax | 1,000,000 | 1,000,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,000,000) | (15,000,000) |
Supplies and other current assets | (35,000,000) | 13,000,000 |
Aircraft maintenance deposits | (14,000,000) | (14,000,000) |
Other long-term assets | (68,000,000) | (24,000,000) |
Accounts payable | (13,000,000) | 16,000,000 |
Air traffic liability | 23,000,000 | 117,000,000 |
Other liabilities | 30,000,000 | 57,000,000 |
Cash provided by (used in) operating activities | (172,000,000) | 96,000,000 |
Cash flows from investing activities: | ||
Capital expenditures | (31,000,000) | (20,000,000) |
Pre-delivery deposits for flight equipment, net of refunds | (86,000,000) | 28,000,000 |
Other | 0 | (4,000,000) |
Cash provided by (used in) investing activities | (117,000,000) | 4,000,000 |
Cash flows from financing activities: | ||
Proceeds from issuance of debt, net of issuance costs | 214,000,000 | 115,000,000 |
Principal repayments on debt | (215,000,000) | (97,000,000) |
Proceeds from sale-leaseback transactions | 49,000,000 | 43,000,000 |
Proceeds from initial public offering, net of offering costs and underwriting discounts | 0 | 266,000,000 |
Minimum tax withholdings on share-based awards | (3,000,000) | (3,000,000) |
Cash provided by financing activities | 45,000,000 | 324,000,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (244,000,000) | 424,000,000 |
Cash, cash equivalents and restricted cash, beginning of period | 918,000,000 | 378,000,000 |
Cash, cash equivalents and restricted cash, end of period | $ 674,000,000 | $ 802,000,000 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) |
Beginning balance (in shares) at Dec. 31, 2020 | 199,438,098 | ||||
Beginning balance at Dec. 31, 2020 | $ 310,000 | $ 0 | $ 60,000 | $ 261,000 | $ (11,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (91,000) | (91,000) | |||
Shares issued in connection with vesting of restricted stock units (in shares) | 505,438 | ||||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | (146,490) | ||||
Shares withheld to cover employee taxes on vested restricted stock units | (3,000) | (3,000) | |||
Restricted stock unit repurchases (in shares) | (20,368) | ||||
Stock option exercise (in shares) | 640,121 | ||||
Stock-based compensation | 3,000 | 3,000 | |||
Ending balance (in shares) at Mar. 31, 2021 | 200,416,799 | ||||
Ending balance at Mar. 31, 2021 | 219,000 | $ 0 | 60,000 | 170,000 | (11,000) |
Beginning balance (in shares) at Dec. 31, 2020 | 199,438,098 | ||||
Beginning balance at Dec. 31, 2020 | 310,000 | $ 0 | 60,000 | 261,000 | (11,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (49,000) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 215,474,482 | ||||
Ending balance at Sep. 30, 2021 | 576,000 | $ 0 | 374,000 | 212,000 | (10,000) |
Beginning balance (in shares) at Mar. 31, 2021 | 200,416,799 | ||||
Beginning balance at Mar. 31, 2021 | 219,000 | $ 0 | 60,000 | 170,000 | (11,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 19,000 | 19,000 | |||
Shares issued in connection with vesting of restricted stock units (in shares) | 18,259 | ||||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | (8,015) | ||||
Amortization of swaption cash flow hedges, net of tax | 1,000 | 1,000 | |||
Stock-based compensation | 2,000 | 2,000 | |||
Issuance of common stock upon initial public offering, net of offering costs, underwriting discounts and commissions (in shares) | 15,000,000 | ||||
Issuance of common stock upon initial public offering, net of offering costs, underwriting discounts and commissions | 266,000 | 266,000 | |||
CARES Act warrants | 43,000 | 43,000 | |||
Ending balance (in shares) at Jun. 30, 2021 | 215,427,043 | ||||
Ending balance at Jun. 30, 2021 | 550,000 | $ 0 | 371,000 | 189,000 | (10,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 23,000 | 23,000 | |||
Shares issued in connection with vesting of restricted stock units (in shares) | 74,140 | ||||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | (32,546) | ||||
Stock option exercise (in shares) | 5,845 | ||||
Stock-based compensation | 3,000 | 3,000 | |||
Ending balance (in shares) at Sep. 30, 2021 | 215,474,482 | ||||
Ending balance at Sep. 30, 2021 | $ 576,000 | $ 0 | 374,000 | 212,000 | (10,000) |
Beginning balance (in shares) at Dec. 31, 2021 | 217,065,096 | 217,065,096 | |||
Beginning balance at Dec. 31, 2021 | $ 530,000 | $ 0 | 381,000 | 159,000 | (10,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (121,000) | (121,000) | |||
Shares issued in connection with vesting of restricted stock units (in shares) | 676,146 | ||||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | (275,822) | ||||
Shares withheld to cover employee taxes on vested restricted stock units | (3,000) | (3,000) | |||
Stock option exercise (in shares) | 34,461 | ||||
Stock-based compensation | 3,000 | 3,000 | |||
Ending balance (in shares) at Mar. 31, 2022 | 217,499,881 | ||||
Ending balance at Mar. 31, 2022 | $ 409,000 | $ 0 | 381,000 | 38,000 | (10,000) |
Beginning balance (in shares) at Dec. 31, 2021 | 217,065,096 | 217,065,096 | |||
Beginning balance at Dec. 31, 2021 | $ 530,000 | $ 0 | 381,000 | 159,000 | (10,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | $ (77,000) | ||||
Stock option exercise (in shares) | 196,937 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 217,762,284 | 217,762,284 | |||
Ending balance at Sep. 30, 2022 | $ 468,000 | $ 0 | 389,000 | 82,000 | (3,000) |
Beginning balance (in shares) at Mar. 31, 2022 | 217,499,881 | ||||
Beginning balance at Mar. 31, 2022 | 409,000 | $ 0 | 381,000 | 38,000 | (10,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 13,000 | 13,000 | |||
Shares issued in connection with vesting of restricted stock units (in shares) | 96,078 | ||||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | (10,472) | ||||
Stock option exercise (in shares) | 89,950 | ||||
Amortization of swaption cash flow hedges, net of tax | 1,000 | 1,000 | |||
Unrealized gain (loss) from cash flow hedges, net of tax | (1,000) | (1,000) | |||
Stock-based compensation | 4,000 | 4,000 | |||
Ending balance (in shares) at Jun. 30, 2022 | 217,675,437 | ||||
Ending balance at Jun. 30, 2022 | 426,000 | $ 0 | 385,000 | 51,000 | (10,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 31,000 | 31,000 | |||
Shares issued in connection with vesting of restricted stock units (in shares) | 25,074 | ||||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | (10,753) | ||||
Stock option exercise (in shares) | 72,526 | ||||
Unrealized gain (loss) from cash flow hedges, net of tax | 7,000 | 7,000 | |||
Stock-based compensation | $ 4,000 | 4,000 | |||
Ending balance (in shares) at Sep. 30, 2022 | 217,762,284 | 217,762,284 | |||
Ending balance at Sep. 30, 2022 | $ 468,000 | $ 0 | $ 389,000 | $ 82,000 | $ (3,000) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) and include the accounts of Frontier Group Holdings, Inc. (“FGHI” or the “Company”) and its wholly-owned direct and indirect subsidiaries, including Frontier Airlines Holdings, Inc. (“FAH”) and Frontier Airlines, Inc. (“Frontier”). All wholly-owned subsidiaries are consolidated, with all intercompany transactions and balances being eliminated. The Company is an ultra low-cost, low-fare airline headquartered in Denver, Colorado that offers flights throughout the United States and to select international destinations in the Americas, serving approximately 110 airports. The Company is managed as a single business unit that primarily provides air transportation for passengers. Management has concluded there is only one reportable segment. The accompanying condensed consolidated financial statements include the accounts of the Company and reflect all normal recurring adjustments which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 23, 2022 (the “2021 Annual Report”). The interim results reflected in the unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for other interim periods or for the full year. The air transportation business is subject to significant seasonal fluctuations and is volatile and highly affected by economic cycles and trends. Certain reclassifications of previously reported amounts have been made to conform to the current year presentation in Note 4. Other Current Assets and Note 10. Other Long-Term Liabilities. These reclassifications did not impact previously reported amounts in the Company’s audited consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of cash flows, or consolidated statements of stockholders’ equity. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. Initial Public Offering On March 31, 2021, the Company’s registration statement on Form S-1 relating to the Company’s initial public offering (“IPO”) was declared effective by the SEC, and the Company’s common stock began trading on the NASDAQ Global Select Market on April 1, 2021 under the symbol “ULCC”. In April 2021, the Company received net proceeds of $266 million after deducting underwriting discounts and commissions of $14 million and offering |
Impact of COVID-19
Impact of COVID-19 | 9 Months Ended |
Sep. 30, 2022 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Impact of COVID-19 | Impact of COVID-19 Impact of the COVID-19 Pandemic The COVID-19 pandemic, along with government-mandated restrictions on travel, required stay-in-place orders, and other social distancing measures, has continued to have a material adverse effect on the Company’s business and results of operations for the three and nine months ended September 30, 2022 and 2021. Although the Company has continued to experience a significant and sustained recovery during the three and nine months ended September 30, 2022 as compared to the three and nine months ended September 30, 2021, the Company is unable to predict the future spread and impact of COVID-19, including future variants of the virus such as the recent Omicron variant and its subvariants, or the efficacy and adherence rates of vaccines and other therapeutics and the resulting measures that may be introduced by governments or other parties and what impact those measures may have on the demand for air travel. Widespread distribution of COVID-19 vaccines has led to increased confidence in travel, particularly in the domestic leisure market on which the Company’s business is focused. While the Company has experienced a meaningful increase in passenger volumes, as well as bookings, since the vaccines became widely available, demand recovery may continue to be hampered as a result of new variants or subvariants of the virus. The Company continues to closely monitor the COVID-19 pandemic and the need to adjust capacity as well as deploy other operational and cost-control measures, as necessary, to preserve short-term liquidity needs and ensure long-term viability of the Company and its strategies. Any anticipated adjustments to capacity and other cost savings initiatives implemented by the Company may vary from actual demand and capacity needs. COVID-19 Relief Funding The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) became law on March 27, 2020, and provided the airline industry with up to $25 billion for a Payroll Support Program (the “PSP”) to be used for employee wages, salaries, and benefits and up to $25 billion in loans. Through 2020 and 2021, the Company participated in the PSP, as well as the second Payroll Support Program (the “PSP2”) and the third Payroll Support Program (the “PSP3,” and together with the PSP and the PSP2, the “PSPs”) offered by the U.S. Department of the Treasury (the “Treasury”), each of which included both a grant and an unsecured 10-year, low-interest promissory note. The grants were recognized within CARES Act credits in the Company’s condensed consolidated statements of operations over the periods they were intended to support payroll. See Note 7 for further information on the promissory notes entered into with the Treasury as a result of participation in the payroll support programs (collectively, the “PSP Promissory Notes”) and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—COVID-19 Relief Funding” in the Company’s 2021 Annual Report for additional detail on the CARES Act and the PSPs. On September 28, 2020, the Company entered into a loan agreement with the Treasury for a term loan facility of up to $574 million pursuant to the secured loan program established under the CARES Act (the “Treasury Loan”). As of December 31, 2021, the Company had borrowed $150 million under the Treasury Loan, for which the right to draw any further funds lapsed in May 2021. On February 2, 2022, the Company repaid the Treasury Loan, which included the $150 million principal balance along with accrued interest and associated fees of $1 million. On January 15, 2021, pursuant to the Consolidated Appropriations Act, 2021 (the “PSP Extension Law”), which extended the PSP provisions of the CARES Act, the Company entered into an agreement with the Treasury for installment funding under the PSP2, under which the Company received $161 million, comprised of a $143 million grant (the “PSP2 Grant”) for the continuation of payroll support from the date of the agreement through March 31, 2021, and an $18 million unsecured 10-year, low-interest loan (the “PSP2 Promissory Note”), all of which was received during the nine months ended September 30, 2021. The Company recognized the full $143 million of PSP2 Grant proceeds, net of deferred financing costs, which had been fully recognized prior to the three months ended September 30, 2021, during the nine months ended September 30, 2021, within CARES Act credits in the Company’s condensed consolidated statements of operations. The American Rescue Plan Act (the “ARP”), enacted on March 11, 2021, provided for additional assistance to passenger air carriers that received financial relief under PSP2. On April 29, 2021, the Company entered into an agreement with the Treasury for installment funding under the PSP3, under which the Company received $150 million, comprised of a $135 million grant (the “PSP3 Grant”) for the continuation of payroll support through September 30, 2021, and a $15 million unsecured 10-year, low-interest loan (the “PSP3 Promissory Note”), all of which was received during the nine months ended September 30, 2021. The Company recognized $72 million and the full $135 million of PSP3 Grant proceeds, net of deferred financing costs, during the three and nine months ended September 30, 2021, respectively, within CARES Act credits in the Company’s condensed consolidated statements of operations. In connection with the Company’s participation in the PSPs and the Treasury Loan, the Company has been and will continue to be, as applicable, subject to certain restrictions and limitations, including, but not limited to: • restrictions on repurchases of equity securities listed on a national securities exchange or payment of dividends until February 2, 2023; • requirements to have maintained certain levels of scheduled services through March 31, 2022 (including to destinations where there may have been significantly reduced or no demand); • a prohibition on involuntary terminations or furloughs of employees (except for health, disability, cause, or certain disciplinary reasons) through September 30, 2021; • a prohibition on reducing the salary, wages or benefits of employees (other than executive officers or independent contractors, or as otherwise permitted under the terms of the PSPs) through September 30, 2021; • limits on certain executive compensation, including limiting pay increases and severance pay or other benefits upon terminations, until April 1, 2023; • limitations on the use of the grant funds exclusively for the continuation of payment of employee salaries, wages and benefits; and • additional reporting and recordkeeping requirements. As part of the PSP Promissory Notes and the Treasury Loan, the Company issued to the Treasury warrants to purchase 3,117,940 shares of FGHI common stock at a weighted average price of $6.95 per share. The initial fair value of these warrants upon issuance was treated as a loan discount, which reduced the carrying value of the related Treasury Loan and PSP Promissory Notes, and is amortized utilizing the effective interest method as interest expense in the Company’s condensed consolidated statements of operations over the term of each loan. These awards were originally classified as liability-based awards within other current liabilities on the Company’s condensed consolidated balance sheets, with periodic mark to market remeasurements being included in interest expense in the Company’s condensed consolidated statements of operations given the Company only had the option of settling in cash prior to being publicly traded. As a result of the IPO, the Company has the intent and ability to settle the warrants issued to the Treasury in shares and as a result, as of April 6, 2021, the Company reclassified the warrant liability to additional paid-in capital on the Company’s condensed consolidated balance sheet and is no longer required to mark to market the warrants. The Company recorded no mark to market adjustments during the three and nine months ended September 30, 2022 or during the three months ended September 30, 2021, and recorded $22 million during the nine months ended September 30, 2021 to interest expense within the Company’s condensed consolidated statements of operations. The Treasury has not exercised any warrants as of September 30, 2022. The CARES Act also provided for an employee retention credit (“CARES Employee Retention Credit”), which is a refundable tax credit against certain employment taxes that the Company qualified for beginning on April 1, |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition As of September 30, 2022 and December 31, 2021, the Company’s air traffic liability was $296 million and $273 million, respectively. During the nine months ended September 30, 2022, substantially all of the air traffic liability as of December 31, 2021 has been recognized as passenger revenue within the Company’s condensed consolidated statements of operations. Of the air traffic liability balances as of September 30, 2022 and December 31, 2021, $9 million and $59 million, respectively, was related to customer rights to book future travel, which either expire within three During the three and nine months ended September 30, 2022 and 2021, the Company recognized $22 million, $67 million, $14 million and $31 million of revenue, respectively, in passenger revenues within the Company’s condensed consolidated statements of operations, related to expected and actual expiration of customer rights to book future travel. Frequent Flyer Program The Company’s Frontier Miles frequent flyer program provides frequent flyer travel awards to program members based on accumulated mileage credits. Mileage credits are generally accumulated as a result of travel, purchases using the co-branded credit card and purchases from other participating partners. The Company defers revenue for mileage credits earned by passengers under its Frontier Miles program based on the equivalent ticket value a passenger receives by redeeming mileage credits for a ticket rather than paying cash. Mileage credits are also sold to participating companies, including credit card companies and other third parties. Sales to credit card companies include multiple promised goods and services, which the Company evaluates to determine whether they represent performance obligations. The Company determined these arrangements have three separate performance obligations: (i) mileage credits to be awarded, (ii) licensing of brand and access to member lists and (iii) advertising and marketing efforts. Total arrangement consideration is allocated to each performance obligation on the basis of the deliverables relative standalone selling price. For mileage credits, the Company considers a number of entity-specific factors when developing the best estimate of the standalone selling price, including the number of mileage credits needed to redeem an award, average fare of comparable segments, breakage and restrictions. For licensing of brand and access to member lists, the Company considers both market-specific factors and entity-specific factors, including general profit margins realized in the marketplace and industry, brand power, market royalty rates and size of customer base. For the advertising and marketing performance obligation, the Company considers market-specific factors and entity-specific factors, including the Company’s internal costs of providing services, volume of marketing efforts and overall advertising plan. Consideration allocated based on the relative standalone selling price to both the brand licensing and access to member lists and advertising and marketing elements is recognized as other revenue in the Company’s condensed consolidated statements of operations over time as mileage credits are delivered. The consideration allocated to the transportation portion of these mileage credit sales is deferred and recognized as a component of passenger revenue in the Company’s condensed consolidated statements of operations at the time of travel for mileage credits redeemed. Mileage credits that the Company estimates are not likely to be redeemed are subject to breakage and are recognized as a portion of passenger revenues in the Company’s condensed consolidated statements of operations in proportion to the pattern of rights exercised by customers. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have an impact on revenues in the year in which the change occurs and in future years. Redemptions are allocated between sold and flown mileage credits based on historical patterns. As a result of the reduction in demand due to the COVID-19 pandemic, the Company extended the expiration dates of mileage credits issued under its frequent flyer program. The Company has a credit card affinity agreement with its credit card partner Barclays Bank Delaware (“Barclays”) through 2029, which provides for joint marketing, grants certain benefits to co-branded credit card holders and allows Barclays to market using the Company’s customer database. Cardholders earn mileage credits under the Frontier Miles program and the Company sells mileage credits at agreed-upon rates to Barclays and earns fees from Barclays for the acquisition, retention and use of the co-branded credit card by consumers. Operating revenues are comprised of passenger revenues, which includes fare and non-fare passenger revenues, and other revenues. Disaggregated operating revenues are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Passenger revenues: Fare $ 386 $ 254 $ 1,035 $ 568 Non-fare passenger revenues: Service fees 220 164 583 368 Baggage 202 131 518 321 Seat selection 61 47 183 118 Other 14 14 42 33 Total non-fare passenger revenue 497 356 1,326 840 Total passenger revenues 883 610 2,361 1,408 Other revenues 23 20 59 43 Total operating revenues $ 906 $ 630 $ 2,420 $ 1,451 The Company is managed as a single business unit that provides air transportation for passengers. Operating revenues by principal geographic region, as defined by the U.S. Department of Transportation (the “DOT”), are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Domestic $ 832 $ 595 $ 2,197 $ 1,376 Latin America 74 35 223 75 Total operating revenues $ 906 $ 630 $ 2,420 $ 1,451 During the three and nine months ended September 30, 2022 and 2021, no revenue from any one foreign country, other than Mexico, represented greater than 5% of the Company’s total operating revenue. The Company attributes operating revenues by geographic region based upon the origin and destination of each passenger flight segment. The Company’s tangible assets consist primarily of flight equipment, which are mobile across geographic markets. Accordingly, assets are not allocated to specific geographic regions. |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | Other Current Assets Other current assets consist of the following (in millions): September 30, 2022 December 31, 2021 Supplier incentives $ 45 $ 11 Prepaid expenses 25 14 Derivative instruments 17 — Income and other taxes receivable 8 12 Other 4 3 Total other current assets $ 99 $ 40 |
Financial Derivative Instrument
Financial Derivative Instruments and Risk Management | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Derivative Instruments and Risk Management | Financial Derivative Instruments and Risk Management The Company is exposed to variability in jet fuel prices. Aircraft fuel is one of the Company’s largest operating expenses. Increases in jet fuel prices may adversely impact its financial performance, operating cash flow and financial position. As part of its risk management program, the Company may enter into derivative contracts in order to lim it exposure to the fluctuations in jet fuel prices. During the three and nine months ended September 30, 2022 and 2021, the Company did not enter into fuel hedges and, therefore, paid no upfront premiums for fuel hedges. Additionally, the Company may be exposed to interest rate risk through aircraft lease contracts for the time period between when an agreement of terms is executed and the commencement of the lease, when portions of rental payments can be adjusted and become fixed based on the seven The Company f ormally designates and accounts for derivative instruments that meet established accounting criteria under ASC 815, Derivatives and Hedging , as cash flow hedges. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instruments is recorded in accumulated other comprehensive income/loss (“AOCI/L”), a component of stockholders’ equity on the Company’s condensed consolidated balance sheets. The Company recognizes the associated gains or losses deferred in AOCI/L as well as the amounts that are paid or received in connection with the purchase or sale of fuel-related financial derivative instruments (i.e., premium costs of option contracts) as a component of aircraft f uel expense within the Company’s condensed consolidated statements of operations in the period that the jet fuel subject to hedging is consumed. For interest rate derivatives, the Company recognizes the associated gains or losses deferred in AOCI/L as well as amounts that are paid or received in connection with the purchase or sale of interest rate derivative instruments (i.e., premium costs of swaption contracts) as a component of aircraft rent expense within the Company’s condensed consolidated statements of operations over the period of the related aircraft lease. The assets and liabilities associated with the Company’s fuel and interest rate derivative instruments are presented on a gross basis and include upfront premiums paid. These assets and liabilities are recorded as a component of other current assets and other current liabilities, respectively, on the Company’s condensed consolidated balance sheets. The Company does not enter into derivative instruments for speculative purposes. The following table presents the assets associated with derivative instruments, which is presented on a gross basis and includes upfront premiums paid (in millions): Balance Sheet Classification September 30, 2022 December 31, 2021 Derivatives designated as cash flow hedges: Interest rate hedge assets Other current assets $ 17 $ — The following table presents the net of tax impact of the overall effectiveness of derivative instruments designated as cash flow hedging instruments under ASC 815 to the Company’s condensed consolidated statements of comprehensive income (loss) (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivatives designated as cash flow hedges Amortization of swaption cash flow hedges, net of tax $ — $ — $ 1 $ 1 Unrealized gain from cash flows hedges, net of tax 7 — 6 — Total $ 7 $ — $ 7 $ 1 As of September 30, 2022 and December 31, 2021, $3 million and $10 million, respectively, was included in AOCI/L, which includes both the expired interest rate hedging instruments that are expected to be reclassified into aircraft rent within the Company’s condensed consolidated statements of operations over the aircraft lease term as well as the fair value adjustments for any outstanding interest rate derivative hedging instruments. The following table summarizes the effect of interest rate derivative instruments’ gains (losses) reflected in aircraft rent expense within the Company’s condensed consolidated statements of operations (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivatives designated as cash flow hedges Amortization of swaption cash flow hedges, net of tax $ — $ — $ (1) $ (1) |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of the following (in millions): September 30, 2022 December 31, 2021 Salaries, wages and benefits $ 97 $ 89 Passenger and other taxes and fees payable 91 84 Aircraft maintenance 60 36 Leased aircraft return costs 51 25 Station obligations 48 64 Fuel liabilities 28 23 Current portion of phantom equity units (Note 9) — 26 Other current liabilities 46 36 Total other current liabilities $ 421 $ 383 Other long-term liabilities consist of the following (in millions): September 30, 2022 December 31, 2021 Deferred supplier incentives $ 48 $ 14 Leased aircraft return costs 24 24 Deferred revenue 19 21 Other 1 1 Total other long-term liabilities $ 92 $ 60 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt obligations are as follows (in millions): September 30, 2022 December 31, 2021 Secured debt: Pre-delivery credit facility (a) $ 268 $ 174 Treasury Loan (b) — 150 Floating rate building note (c) 18 18 Unsecured debt: PSP Promissory Notes (d) 66 66 Affinity card advance purchase of mileage credits (e) 71 15 Total debt 423 423 Less current maturities of long-term debt, net (193) (127) Less long-term debt acquisition costs and other discounts (2) (9) Long-term debt, net $ 228 $ 287 __________________ (a) The Company, through an affiliate, entered into the pre-delivery payment (“PDP”) facility with Citibank, N.A. in December 2014 (the “PDP Financing Facility”). The PDP Financing Facility is collateralized by the Company’s purchase agreement for Airbus A320 family aircraft deliveries through the term of the facility (see Note 11). In December 2020, the PDP Financing Facility was amended and restated to reduce the commitment of Citibank, N.A., as initial lender, to $150 million, remove the ability to draw further unsecured borrowings and to provide collateral for the borrowings not secured by aircraft outstanding as of that date. In May 2021, the Company amended the facility to increase the total available capacity to $200 million and expanded the number of financial institution participants as lenders. In December 2021, the facility was amended and restated to extend the availability of the facility through December 2024 to include additional 2023 and 2024 aircraft deliveries, and in March 2022 the facility was further amended to re-align the PDP Financing Facility with the updated future aircraft deliveries. In June 2022, the facility was amended and restated to extend the availability of the facility through December 2025 to include additional 2025 aircraft deliveries, to increase the total available capacity to $280 million, and to include the flexibility to potentially obtain additional commitments from other lenders. No commitments have been secured from other lenders as of September 30, 2022. Interest is paid every 90 days based on the Secured Overnight Financing Rate ("SOFR") plus a margin for each individual tranche. The PDP Financing Facility consists of separate loans for each PDP aircraft. Each separate loan matures upon the earlier of (i) delivery of that aircraft to the Company by Airbus, (ii) the date one month following the last day of the scheduled delivery month of such aircraft and (iii) if there is a delay in delivery of aircraft, depending on the cause of the delivery delay, up to six months following the last day of the scheduled delivery month of such aircraft. The PDP Financing Facility will be repaid periodically according to the preceding sentence with the last scheduled delivery of aircraft contemplated in the PDP Financing Facility, as currently in effect, expected to be in the fourth quarter of 2025. (b) On September 28, 2020, the Company entered into the Treasury Loan with the Treasury for a term loan facility of up to $574 million, and had borrowed $150 million under the loan as of December 31, 2021. On February 2, 2022, the Company repaid the Treasury Loan in full, along with accrued interest and associated fees of $1 million. Additionally, the Company recognized a $7 million loss on the extinguishment of debt for the nine months ended September 30, 2022 from the write-off of unamortized deferred financing costs associated with the Treasury Loan. The repayment terminated the loan agreement with the Treasury and substantially unencumbered the Company’s co-branded credit card program and related brand assets that secured the Treasury Loan. (c) Represents a note with a commercial bank related to the Company’s headquarters building. Under the terms of the agreement, the Company will repay the outstanding principal balance in quarterly payments beginning in January 2022 until the maturity date in December 2023. On the maturity date, one final balloon payment will be made to cover all unpaid principal, accrued unpaid interest and other amounts due. The interest rate of one-month LIBOR plus a margin is payable monthly. (d) On April 30, 2020, the Company executed a promissory note under the PSP agreement with the Treasury from which the Company received a $33 million unsecured 10-year, low-interest loan (the “PSP Promissory Note”). Subsequently, the Company entered into the PSP2 with the Treasury in January 2021 and the PSP3 with the Treasury in April 2021, from which the Company received an additional $18 million and $15 million of proceeds, respectively, evidenced by promissory notes with the same terms as the original PSP Promissory Note. The PSP Promissory Notes include an annual interest rate of 1.00% for the first five years and the SOFR plus 2.00% in the final five years. The loans can be prepaid at par at any time without incurring a penalty. (e) The Company entered into an agreement with Barclays in 2003 to provide for joint marketing, grant certain benefits to co-branded credit card holders (“Cardholders”), and allow Barclays to market using the Company’s customer database. Cardholders earn mileage credits under the Frontier Miles program and the Company sells mileage credits at agreed-upon rates to Barclays and earns fees from Barclays for the acquisition, retention and use of the co-branded credit card by consumers. In addition, Barclays will pre-purchase miles if the Company meets certain conditions precedent. On September 15, 2020 the Company entered into a new agreement with Barclays to amend and extend the agreement to 2029. The pre-purchased miles facility amount is to be reset on January 15 of each calendar year through, and including, January 15, 2028 based on the aggregate amount of fees payable by Barclays to the Company on a calendar year basis, up to an aggregate maximum facility amount of $200 million. Per the terms of the Treasury Loan, the facility amount could not be extended above $15 million until full extinguishment of the Treasury Loan, which occurred in February 2022, and, as a result, the Company borrowed an additional $56 million in the first quarter of 2022. The Company pays interest on a monthly basis, which is based on a one-month LIBOR plus a margin. Beginning March 31, 2028, the facility is scheduled to be repaid in 12 equal monthly installments. Cash payments for interest related to debt was $9 million and $7 million for the nine months ended September 30, 2022 and 2021, respectively. The Company has issued standby letters of credit and surety bonds to various airport authorities and vendors that are collateralized by a portion of the Company’s property and equipment and, as of September 30, 2022 and December 31, 2021, the Company did not have any outstanding letters of credit that were drawn upon. As of September 30, 2022, future maturities of debt are payable as follows (in millions): September 30, 2022 Remainder of 2022 $ 55 2023 206 2024 25 2025 — 2026 — Thereafter 137 Total debt principal payments $ 423 The Company continues to monitor covenant compliance with various parties, including, but not limited to, its lenders and credit card processors, and as of September 30, 2022 and through the date of this report, the Company is in compliance with all of its covenants, except the Company has obtained a waiver of relief for the covenant provisions through the third quarter of 2022 related to one of its credit card processors that represents less than 10% of total revenues. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company leases property and equipment under operating leases. For leases with initial terms greater than 12 months, the related operating lease right-of-use asset and corresponding operating lease liability are recorded at the present value of lease payments over the term on the Company’s condensed consolidated balance sheets. Some leases include rental escalation clauses, renewal options, termination options, and/or other items that cause variability that are factored into the determination of lease payments when appropriate. The Company does not separate lease and non-lease components of contracts, except for certain flight training equipment, for which consideration is allocated between lease and non-lease components. Aircraft As of September 30, 2022, the Company leased 115 aircraft with remaining terms ranging from one month to twelve years, all of which are under operating leases and are included within right-of-use asset and lease liabilities on the Company’s condensed consolidated balance sheets. In addition, as of September 30, 2022, the Company leased 25 spare engines, which are all under operating leases, with the remaining terms ranging from one month to twelve years. As of September 30, 2022, the lease rates for eight of the engines depend on usage-based metrics which are variable, and as such, these leases are not recorded on the Company’s condensed consolidated balance sheets as a right-of-use asset and lease liability. During the three and nine months ended September 30, 2022 and 2021, the Company executed sale-leaseback transactions with third-party lessors for three, eight, five and 13 new Airbus A320neo family aircraft, respectively. Additionally, the Company completed sale-leaseback transactions for one and three engines during the three and nine months ended September 30, 2022, respectively. The Company did not complete a sale-leaseback transaction for any engines during the three months ended September 30, 2021 and completed a sale-leaseback transaction for one engine during the nine months ended September 30, 2021. All of the leases from sale-leaseback transactions have been accounted for as operating leases. The Company recognized net sale-leaseback gains of $21 million, $49 million, $19 million and $55 million during the three and nine months ended September 30, 2022 and 2021, respectively, which are included as a component of other operating expenses within the Company’s condensed consolidated statements of operations. In May 2021, the Company entered into an early termination and buyout agreement with one of its lessors for six aircraft previously owned by the Company, which stipulated that four A319 aircraft originally scheduled to be returned in December 2021 would be returned during the second and third quarters of 2021 and the two A320ceo aircraft would return as scheduled during the fourth quarter of 2021. The early returns of these aircraft retired the remaining A319 aircraft in the Company’s fleet. As a result of this early termination and buyout arrangement, the Company recorded a $1 million and $10 million charge included as a component of rent expense within the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2021, respectively, related to the accelerated rent and lease return obligations of the A319 aircraft returned early. Aircraft Rent Expense and Maintenance Obligations During the three and nine months ended September 30, 2022 and 2021, aircraft rent expense was $140 million, $401 million, $128 million and $399 million, respectively. Aircraft rent expense includes supplemental rent, which is made up of maintenance reserves paid or to be paid that are not probable of being reimbursed and probable lease return condition obligations. Supplemental rent expense (benefit) for maintenance-related reserves that were deemed non-recoverable and any impact from changes in those estimates, was less than $1 million and $(1) million for the three and nine months ended September 30, 2022, respectively, and less than $1 million for each of the three and nine months ended September 30, 2021. The portion of supplemental rent expense related to probable lease return condition obligations was $23 million, $56 million, $16 million and $41 million for three and nine months ended September 30, 2022 and 2021, respectively. Additionally, certain of the Company’s aircraft lease agreements require the Company to pay maintenance reserves to aircraft lessors to be held as collateral in advance of the Company’s required performance of major maintenance activities. As of September 30, 2022 and December 31, 2021, the Company had aircraft maintenance deposits that are expected to be recoverable of $113 million and $108 million, respectively, on the Company’s condensed consolidated balance sheets, of which $9 million and $10 million, respectively, are included in accounts receivable, net on the Company’s condensed consolidated balance sheets as the eligible maintenance has been performed. The remaining $104 million and $98 million are included within aircraft maintenance deposits on the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively. A majority of these maintenance reserve payments are calculated based on a utilization measure, such as flight hours or cycles. Maintenance reserves collateralize the lessor for maintenance time run off the aircraft until the completion of the maintenance of the aircraft. As of September 30, 2022, fixed maintenance reserve payments for aircraft and spare engines, including estimated amounts for contractual price escalations, are expected to be $1 million for the remainder of 2022, $3 million per year for the years 2023 through 2026 and $9 million thereafter before consideration of reimbursements. Airport Facilities The Company’s facility leases are primarily for space at approximately 110 airports that are primarily located in the United States. These leases are classified as operating leases and reflect the use of airport terminals, ticket counters, office space, and maintenance facilities. Generally, this space is leased from government agencies that control the use of the airport. The majority of these leases are short-term in nature and renew on an evergreen basis. For these leases, the contractual term is used as the lease term. As of September 30, 2022, the remaining lease terms vary from one month to eleven years. At the majority of the U.S. airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually, and because of the variable nature of the rates, these leases are not recorded on the Company’s condensed consolidated balance sheets as a right-of-use assets and lease liabilities. Other Ground Property and Equipment The Company leases certain other assets such as flight training equipment, building space, and various other equipment. Certain of the Company’s leases for other assets are deemed to contain fixed rental payments and, as such, are classified as operating leases and are recorded on the Company’s condensed consolidated balance sheets as a right-of-use asset and liability. The remaining lease terms range from one month to nine years as of September 30, 2022. During June 2022, the Company entered into an arrangement with an existing vendor that provides access and use of certain components and maintenance services which modified the existing term by extending the agreement through 2031 and provided for more favorable pricing terms, including additional supplier credits to be recognized ratably over the term of the arrangement. As a result, the Company remeasured both its lease liability and right-of-use asset to reflect the extended terms and recorded a $22 million lease incentive in June of 2022. Lessor Concessions In response to the COVID-19 pandemic, beginning in 2020, the Company was granted payment deferrals on leases included in the Company’s right-of-use assets for certain aircraft and engines from lessors along with airport facilities and other vendors that are not included in the Company’s right-of-use assets. As these deferred payments are made, the Company will recognize the deferred payments in aircraft rent or station operations, as applicable, in the Company’s condensed consolidated statements of operations. The payback of all previous aircraft and engine rent deferrals was completed as of December 31, 2021, and, therefore, there was no impact to aircraft rent within the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2022. The payback of station deferrals had no impact to station operations for the three months ended September 30, 2022 and decreased operating cash flows and unfavorably impacted station operations within the Company’s results of operations by $1 million for the nine months ended September 30, 2022. The deferrals for the three and nine months ended September 30, 2021 decreased operating cash flows and unfavorably impacted the Company’s results of operations by $2 million and $22 million, respectively, including a $2 million and $31 million unfavorable impact to aircraft rent within the condensed consolidated statements of operations for the same periods, respectively. There was no impact to station operations for the three months ended September 30, 2021 and a $9 million favorable impact to station operations for the nine months ended September 30, 2021. As of September 30, 2022, the Company had $10 million in station deferrals which will be recognized to station operations within the Company’s condensed consolidated statements of operations in future periods as the deferrals are repaid. Lease Costs The table below presents certain information related to lease costs for operating leases during the three and nine months ended September 30, 2022 and 2021 (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost (a) $ 121 $ 116 $ 356 $ 357 Variable lease cost (a) 50 76 169 228 Total lease costs $ 171 $ 192 $ 525 $ 585 ______________ (a) Expenses are included within aircraft rent, station operations, maintenance, materials and repairs and other operating within the Company’s condensed consolidated statements of operations. During the three and nine months ended September 30, 2022 and 2021, the Company acquired, through new operating leases, operating lease assets totaling $96 million, $244 million, $178 million and $480 million, respectively, which are included in operating lease right-of-use assets on the Company’s condensed consolidated balance sheets. During the three and nine months ended September 30, 2022 and 2021, the Company paid cash of $107 million, $343 million, $116 million and $339 million net of lessor incentives received, respectively, for amounts included in the measurement of lease liabilities. |
Stock-Based Compensation and St
Stock-Based Compensation and Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation and Stockholders’ Equity | Stock-Based Compensation and Stockholders’ Equity During the three and nine months ended September 30, 2022 and 2021, the Company recognized $4 million , $11 million , $3 million and $8 million, respectively, in stock-based compensation expense, which is included as a component of salaries, wages and benefits within the Company’s condensed consolidated statements of operations. Stock Options and Restricted Awards In April 2014, the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”). Under the terms of the 2014 Plan, 38 million shares of FGHI common stock were reserved for issuance. Concurrently with the Company’s IPO on April 1, 2021, the Company approved the 2021 Incentive Award Plan (the “2021 Plan”), which reserved 7 million shares of FGHI common stock for future issuance of stock-based compensation awards. Additionally, upon approval of the 2021 Plan, the 2014 Plan was terminated and the 11 million awards issued and outstanding as of the Company’s IPO from the 2014 Plan were retained for any subsequent exercise or vesting of such awards and no further grants will be made from the 2014 Plan. Any shares that are subsequently forfeited from the 2014 Plan will become available for future issuances under the 2021 Plan. Additional shares become available for issuance under the 2021 Plan based on an annual increase on the first day of each fiscal year beginning in 2022 and ending in 2031, equal to the lesser of (i) one percent (1%) of the shares of stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of stock as determined by the Company’s board of directors; provided, however, that no more than 30 million shares of stock may be issued upon the exercise of incentive stock options. On January 1, 2022, 2,170,650 shares were added to the 2021 Plan as a result of the annual increase. There were no stock options granted during the nine months ended September 30, 2022. During the nine months ended September 30, 2022, 196,937 vested stock options were exercised with a weighted average exercise price of $3.67 per share. As of September 30, 2022, the weighted average exercise price of outstanding options was $1.95 per share. During the nine months ended September 30, 2022, 1,212,010 restricted stock units were issued with a weighted average grant date fair value of $12.09 per share. During the nine months ended September 30, 2022, 797,298 restricted stock units vested, of which 297,047 restricted stock units were withheld to cover employee taxes, with a weighted average grant date fair value of $12.50 and $12.25 per share, respectively. Phantom Equity Awards On December 3, 2013, to give effect to the reorganization of the Company’s corporate structure, an agreement was reached to amend and restate a phantom equity agreement with the Company’s pilots. Under the terms of this agreement, when an amendment to the underlying collective bargaining agreement was approved, the Company’s pilots employed in June 2011 (the “Participating Pilots”), through their agent, FAPAInvest, LLC, received phantom equity units. Each unit represented the right to receive common stock or cash in connection with certain events, including a qualifying IPO, such stock to be distributed or cash paid to the Participating Pilots in 2020 and 2022 based on a predetermined formula. In accordance with the amended and restated phantom equity agreement, the obligation became fixed as of December 31, 2019 and was no longer subject to valuation adjustments. As of December 31, 2021, the remaining liability was $26 million and presented within other current liabilities on the Company’s condensed consolidated balance sheet. During the nine months ended September 30, 2022, the $26 million was fully paid. Stockholders’ Equity |
Other Long-Term Liabilities
Other Long-Term Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Current Liabilities Other current liabilities consist of the following (in millions): September 30, 2022 December 31, 2021 Salaries, wages and benefits $ 97 $ 89 Passenger and other taxes and fees payable 91 84 Aircraft maintenance 60 36 Leased aircraft return costs 51 25 Station obligations 48 64 Fuel liabilities 28 23 Current portion of phantom equity units (Note 9) — 26 Other current liabilities 46 36 Total other current liabilities $ 421 $ 383 Other long-term liabilities consist of the following (in millions): September 30, 2022 December 31, 2021 Deferred supplier incentives $ 48 $ 14 Leased aircraft return costs 24 24 Deferred revenue 19 21 Other 1 1 Total other long-term liabilities $ 92 $ 60 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Flight Equipment Commitments As of September 30, 2022, the Company’s firm aircraft and engine orders consisted of the following: A320neo A321neo Total Aircraft (a) Engines Year Ending Remainder of 2022 2 3 5 1 2023 — 22 22 4 2024 — 24 24 2 2025 17 13 30 4 2026 19 22 41 4 Thereafter 31 73 104 5 Total 69 157 226 20 __________________ (a) While the schedule presented reflects the contractual delivery dates as of September 30, 2022, the Company has recently experienced modest delays in the deliveries of Airbus aircraft which may persist in future periods. As of September 30, 2022, the Company had two remaining aircraft to be delivered under the original existing master purchase agreement with Airbus (“backlog aircraft”). During December 2017, the Company entered into an amendment to the previously existing master purchase agreement. Pursuant to this amendment and subsequent amendments, the Company has a commitment to purchase a remaining incremental 67 A320neo and 66 A321neo aircraft (“incremental aircraft”) with the first delivery occurring during September 2022 and the remaining are expected to be delivered through 2028. In November 2021, the Company entered into an amendmen t with Airbus to add an additional 91 A321neo aircraft (“supplemental aircraft”) to the committed purchase agreement, with deliveries expected to begin in 2024, continuing through 2029 per the latest delivery schedule. The Company, at its option, has the right to convert 18 A320neo aircraft to A321XLR aircraft. The conversion right is available until December 31, 2022 and is not reflected in the table above as this option has not been exercised. Each of the Company’s amended agreements with Airbus provide for, among other things, varying purchase incentives for each aircraft type (e.g., a A320neo versus A321neo), which, upon the signing of each subsequent amendment, are allocated proportionally by aircraft type over the remaining aircraft to be delivered so that each aircraft’s capitalized cost upon induction would be equal. Therefore, as cash paid for deliveries is greater than it’s capitalized cost due to the allocation of these purchase incentives, a deferred purchase incentive is recognized within other assets on the Company’s condensed consolidated balance sheets, which will ultimately be offset by future deliveries of aircraft with lower cash payments than their associated capitalized cost. In April 2022, the agreement with Pratt & Whitney, the provider of engines for the Company’s incremental order book, was amended to include additional spare engine commitments and adjust the timing of remaining deliveries, which has been reflected in the table above. As of September 30, 2022, purchase commitments for these aircraft and engines, including estim ated amounts for contractual price escalations and PDPs, were approximately $291 million for the remainder of 2022, $1,283 million in 2023, $1,452 million in 2024, $1,769 million in 2025, $2,362 million in 2026 and $6,215 million thereafter. During July 2021, the Company signed a letter of intent with two of its leasing partners to add ten additional A321neo aircraft through direct leases, with deliveries beginning in the fourth quarter of 2022 and continuing into the first half of 2023. As of September 30, 2022, lease agreements for all of the additional aircraft have been executed. None of these ten aircraft that will be acquired through direct leases are reflected in the table above given these are not committed purchase agreements. Litigation and Other Contingencies On March 12, 2021, the DOT advised the Company that it was in receipt of information indicating that the Company had failed to comply with certain DOT consumer protection requirements relating to consumer refund and credit practices and requested that the Company provide certain information to the DOT. The original DOT request for information and subsequent correspondence and requests have been focused on the Company’s refund practices on Company initiated flight cancellations and/or significant schedule changes in flights as a result of the COVID-19 pandemic. The Company is fully cooperating with the DOT and the review of this matter is still in process. The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. The Company regularly evaluates the status of such matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each matter to assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an estimate of possible loss or range of loss can be made. The Company believes the ultimate outcome of such lawsuits, proceedings, and reviews will not, individually or in the aggregate, have a material adverse effect on its condensed consolidated financial position, liquidity, or results of operations and that the Company’s current accruals cover matters where loss is deemed probable and can be reasonably estimated. The ultimate outcome of legal actions is unpredictable and can be subject to significant uncertainties, and it is difficult to determine whether any loss is probable or even possible. Additionally, it is also difficult to estimate the amount of loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Thus, actual losses may be in excess of any recorded liability or the range of reasonably possible loss. Employees The Company has seven u nion-represented employee groups that together represent approximately 87% of all employees as of September 30, 2022. The table below sets forth the Company’s employee groups and status of the collective bargaining agreements as of September 30, 2022: Percentage of Workforce Employee Group Representative Amendable Date September 30, 2022 Pilots Air Line Pilots Association (ALPA) January 2024 31% Flight Attendants Association of Flight Attendants (AFA-CWA) May 2024 51% Aircraft Technicians International Brotherhood of Teamsters (IBT) May 2025 (a) 3% Aircraft Appearance Agents IBT October 2023 1% Dispatchers Transport Workers Union (TWU) December 2021 (b) 1% Material Specialists IBT March 2022 (b) <1% Maintenance Controllers IBT October 2023 <1% __________________ (a) The Company conducted off-cycle negotiations with its aircraft technicians, represented by IBT, where the amendable date was extended from March 2024 to May 2025. (b) The Company’s collective bargaining agreements with its dispatchers and material specialists, represented by TWU and IBT, respectively, were amendable as of September 30, 2022 and negotiations are ongoing, however, each agreement is operating under its current arrangement until an amendment has been reached. The Company is self-insured for health care claims, subject to a stop-loss policy, for eligible participating employees and qualified dependent medical and dental claims, subject to deductibles and limitations. The Company’s liabilities for claims incurred but not reported are determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated from actual claim rates and adjusted periodically as necessary. The Company had accrued $5 million for health care claims, including those estimated to be incurred but not yet paid, as of September 30, 2022 and December 31, 2021, which is included as a component of other current liabilities on the Company’s condensed consolidated balance sheets. General Indemnifications The Company has various leases with respect to real property as well as various agreements among airlines relating to fuel consortia or fuel farms at airports. Under some of these contracts, the Company is party to joint and several liability regarding environmental damages. Under others, where the Company is a member of an LLC or other entity that contracts directly with the airport operator, liabilities are borne through the fuel consortia structure. The Company’s aircraft, services, equipment lease and sale and financing agreements typically contain provisions requiring us, as the lessee, obligor or recipient of services, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or such other equipment. The Company believes that its insurance would cover most of its exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft, services, equipment lease and sale and financing agreements described above. Certain of the Company’s aircraft and other financing transactions include provisions that require payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions and other agreements, the Company also bears the risk of certain changes in tax laws that would subject payments to non-U.S. entities to withholding taxes. |
Net Earnings (Loss) per Share
Net Earnings (Loss) per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Earnings (Loss) per Share | Net Earnings (Loss) per ShareBasic and diluted earnings (loss) per share are computed pursuant to the two-class method. Under the two-class method, the Company attributes net income to common stock and other participating rights (including those with vested share-based awards). Basic net earnings per share is calculated by taking net income, less earnings allocated to participating rights, divided by the basic weighted average common stock outstanding. Net loss per share is calculated by taking net loss divided by basic weighted average common stock outstanding as participating rights do not share in losses. In accordance with the two-class method, diluted net earnings per share is calculated using the more dilutive impact of the treasury-stock method or from reducing net income for the earnings allocated to participating rights. The following table sets forth the computation of net earnings (loss) per share on a basic and diluted basis pursuant to the two-class method for the periods indicated (in millions, except for share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic: Net income (loss) $ 31 $ 23 $ (77) $ (49) Less: net income attributable to participating rights (1) (1) — — Net income (loss) attributable to common stockholders $ 30 $ 22 $ (77) $ (49) Weighted average common shares outstanding, basic 217,720,426 215,452,632 217,532,815 209,816,184 Net earnings (loss) per share, basic $ 0.13 $ 0.10 $ (0.36) $ (0.23) Diluted: Net income (loss) $ 31 $ 23 $ (77) $ (49) Less: net income attributable to participating rights (1) (1) — — Net income (loss) attributable to common stockholders $ 30 $ 22 $ (77) $ (49) Weighted average common shares outstanding, basic 217,720,426 215,452,632 217,532,815 209,816,184 Effect of dilutive potential common shares 2,158,514 2,802,291 — — Weighted average common shares outstanding, diluted 219,878,940 218,254,923 217,532,815 209,816,184 Net earnings (loss) per share, diluted $ 0.13 $ 0.10 $ (0.36) $ (0.23) Due to the net losses incurred during the nine months ended September 30, 2022 and 2021, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding given that the effect of all equity awards is anti-dilutive. Approximately 208,041 and 294,679 shares were excluded from the computation of diluted shares for the three months ended September 30, 2022 and 2021, respectively, as their impact would have been anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Under ASC 820, Fair Value Measurements and Disclosures , disclosures relating to how fair value is determined for assets and liabilities are required, and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs, as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes several valuation techniques in order to assess the fair value of its financial assets and liabilities. Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash are comprised of liquid money market funds, time deposits and cash, and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions. Cash, cash equivalents and restricted cash are carried at cost, which management believes approximates fair value. Interest Rate Swaption Derivative Instruments Interest rate swaption contracts are valued under an income approach based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets; therefore, they are classified as Level 2 inputs. Given the swaptions will be cash settled upon exercise and that the market value will be done using overnight indexed swap (OIS) discounting, OIS discounting is applied to the income approach valuation. Debt The estimated fair value of the Company’s debt agreements has been determined to be Level 3 measurement, as certain inputs used to determin e the fair value of these agreements are unobservable. The Company utilizes a discounted cash flow method to estimate the fair value of the Level 3 debt. The carrying amounts and estimated fair values of the Company’s debt are as follows (in millions): September 30, 2022 December 31, 2021 Carrying Estimated Fair Value Carrying Value Estimated Fair Value Secured debt: Pre-delivery credit facility $ 268 $ 267 $ 174 $ 175 Treasury Loan — — 150 156 Floating rate building note 18 18 18 19 Unsecured debt: PSP Promissory Notes 66 48 66 58 Affinity card advance purchase of mileage credits 71 63 15 14 Total debt $ 423 $ 396 $ 423 $ 422 The tables below present disclosures about the fair value of assets and liabilities measured at fair value on a recurring basis in the Company’s condensed consolidated financial statements (in millions): Fair Value Measurements as of September 30, 2022 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Cash Cash and cash equivalents $ 674 $ 674 $ — $ — Interest rate derivative contracts Other current assets $ 17 $ — $ 17 $ — Fair Value Measurements as of December 31, 2021 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Cash Cash and cash equivalents $ 918 $ 918 $ — $ — The Company had no transfers of assets or liabilities between fair value hierarchy levels between December 31, 2021 and September 30, 2022. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties Management Services Indigo Partners, LLC (“Indigo Partners”) manages an investment fund that is the controlling stockholder of the Company. The Company is assessed a quarterly fee to Indigo Partners for management services. The Company recorded less than $1 million for each of the three months ended September 30, 2022 and 2021, and $1 million for each of the nine months ended September 30, 2022 and 2021 for these fees, which are included as other operating expenses within the Company’s condensed consolidated statements of operations. Codeshare Arrangement The Company entered into a codeshare agreement with Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (an airline based in Mexico doing business as “Volaris”) during 2018, under which sales began in July 2018. Two of the Company’s directors are members of the board of directors of Volaris. As of September 30, 2022, Indigo Partners holds approximately 18% of the total outstanding common stock of Volaris. |
The Proposed Merger with Spirit
The Proposed Merger with Spirit Airlines, Inc. | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
The Proposed Merger with Spirit Airlines, Inc. | The Proposed Merger with Spirit Airlines, Inc.On February 5, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Top Gun Acquisition Corp. (“Merger Sub”), a direct wholly-owned subsidiary of the Company, and Spirit Airlines, Inc. (“Spirit”). The Merger Agreement provided that, among other things, the Merger Sub would be merged with and into Spirit (the “Merger”), with Spirit surviving the Merger and continuing as a wholly-owned subsidiary of the Company. On July 27, 2022, the Company and Spirit mutually terminated the Merger Agreement. During the three and nine months ended September 30, 2022, the Company recorded $13 million and $33 million, respectively, of expenses related to the proposed Merger within transaction and merger-related costs, net in the Company’s condensed consolidated statement of operations. These transaction and merger-related costs incurred during the three and nine months ended September 30, 2022 included transaction costs, which are made up of banking, legal and accounting fees, among others, charged in connection with the Merger, of $4 million and $16 million, respectively, and retention bonus expenses, which included an acceleration of 50% of the Merger-related retention costs that were paid out during the quarter to all eligible employees who were not subject to CARES Act compensation restrictions, of $9 million and $17 million, respectively. During the three and nine months ended September 30, 2022, the Company received $25 million from Spirit for reimbursement of incurred Merger-related expenses in accordance with the termination provisions set forth in the Merger Agreement which was recorded in transaction and merger-related costs, net, resulting in net transaction and merger-related costs (credits) of $(12) million and $8 million, respectively. In the event that Spirit, within twelve months following the termination of the Merger Agreement, consummates an acquisition with another acquiror or enters into a definitive written agreement providing for an acquisition with another acquiror, which is ultimately consummated, the Company will be owed an additional $69 million, as provided for in the Merger Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) |
Consolidation, Policy | Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) and include the accounts of Frontier Group Holdings, Inc. (“FGHI” or the “Company”) and its wholly-owned direct and indirect subsidiaries, including Frontier Airlines Holdings, Inc. (“FAH”) and Frontier Airlines, Inc. (“Frontier”). All wholly-owned subsidiaries are consolidated, with all intercompany transactions and balances being eliminated. |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Frequent Flyer Program | Frequent Flyer Program The Company’s Frontier Miles frequent flyer program provides frequent flyer travel awards to program members based on accumulated mileage credits. Mileage credits are generally accumulated as a result of travel, purchases using the co-branded credit card and purchases from other participating partners. The Company defers revenue for mileage credits earned by passengers under its Frontier Miles program based on the equivalent ticket value a passenger receives by redeeming mileage credits for a ticket rather than paying cash. Mileage credits are also sold to participating companies, including credit card companies and other third parties. Sales to credit card companies include multiple promised goods and services, which the Company evaluates to determine whether they represent performance obligations. The Company determined these arrangements have three separate performance obligations: (i) mileage credits to be awarded, (ii) licensing of brand and access to member lists and (iii) advertising and marketing efforts. Total arrangement consideration is allocated to each performance obligation on the basis of the deliverables relative standalone selling price. For mileage credits, the Company considers a number of entity-specific factors when developing the best estimate of the standalone selling price, including the number of mileage credits needed to redeem an award, average fare of comparable segments, breakage and restrictions. For licensing of brand and access to member lists, the Company considers both market-specific factors and entity-specific factors, including general profit margins realized in the marketplace and industry, brand power, market royalty rates and size of customer base. For the advertising and marketing performance obligation, the Company considers market-specific factors and entity-specific factors, including the Company’s internal costs of providing services, volume of marketing efforts and overall advertising plan. Consideration allocated based on the relative standalone selling price to both the brand licensing and access to member lists and advertising and marketing elements is recognized as other revenue in the Company’s condensed consolidated statements of operations over time as mileage credits are delivered. The consideration allocated to the transportation portion of these mileage credit sales is deferred and recognized as a component of passenger revenue in the Company’s condensed consolidated statements of operations at the time of travel for mileage credits redeemed. Mileage credits that the Company estimates are not likely to be redeemed are subject to breakage and are recognized as a portion of passenger revenues in the Company’s condensed consolidated statements of operations in proportion to the pattern of rights exercised by customers. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have an impact on revenues in the year in which the change occurs and in future years. Redemptions are allocated between sold and flown mileage credits based on historical patterns. As a result of the reduction in demand due to the COVID-19 pandemic, the Company extended the expiration dates of mileage credits issued under its frequent flyer program. The Company has a credit card affinity agreement with its credit card partner Barclays Bank Delaware (“Barclays”) through 2029, which provides for joint marketing, grants certain benefits to co-branded credit card holders and allows Barclays to market using the Company’s customer database. Cardholders earn mileage credits under the Frontier Miles |
Operating Leases | The Company leases property and equipment under operating leases. For leases with initial terms greater than 12 months, the related operating lease right-of-use asset and corresponding operating lease liability are recorded at the present value of lease payments over the term on the Company’s condensed consolidated balance sheets. Some leases include rental escalation clauses, renewal options, termination options, and/or other items that cause variability that are factored into the determination of lease payments when appropriate. The Company does not separate lease and non-lease components of contracts, except for certain flight training equipment, for which consideration is allocated between lease and non-lease components. |
Fair Value Measurement | Under ASC 820, Fair Value Measurements and Disclosures , disclosures relating to how fair value is determined for assets and liabilities are required, and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs, as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes several valuation techniques in order to assess the fair value of its financial assets and liabilities. Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash are comprised of liquid money market funds, time deposits and cash, and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions. Cash, cash equivalents and restricted cash are carried at cost, which management believes approximates fair value. Interest Rate Swaption Derivative Instruments Interest rate swaption contracts are valued under an income approach based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets; therefore, they are classified as Level 2 inputs. Given the swaptions will be cash settled upon exercise and that the market value will be done using overnight indexed swap (OIS) discounting, OIS discounting is applied to the income approach valuation. Debt The estimated fair value of the Company’s debt agreements has been determined to be Level 3 measurement, as certain inputs used to determin e the fair value of these agreements are unobservable. The Company utilizes a discounted cash flow method to estimate the fair value of the Level 3 debt. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated operating revenues are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Passenger revenues: Fare $ 386 $ 254 $ 1,035 $ 568 Non-fare passenger revenues: Service fees 220 164 583 368 Baggage 202 131 518 321 Seat selection 61 47 183 118 Other 14 14 42 33 Total non-fare passenger revenue 497 356 1,326 840 Total passenger revenues 883 610 2,361 1,408 Other revenues 23 20 59 43 Total operating revenues $ 906 $ 630 $ 2,420 $ 1,451 |
Revenue by Geographic Region | Operating revenues by principal geographic region, as defined by the U.S. Department of Transportation (the “DOT”), are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Domestic $ 832 $ 595 $ 2,197 $ 1,376 Latin America 74 35 223 75 Total operating revenues $ 906 $ 630 $ 2,420 $ 1,451 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consist of the following (in millions): September 30, 2022 December 31, 2021 Supplier incentives $ 45 $ 11 Prepaid expenses 25 14 Derivative instruments 17 — Income and other taxes receivable 8 12 Other 4 3 Total other current assets $ 99 $ 40 |
Financial Derivative Instrume_2
Financial Derivative Instruments and Risk Management (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Cash Flow Hedges Presented as Components of Other Current Assets and Liabilities | The following table presents the assets associated with derivative instruments, which is presented on a gross basis and includes upfront premiums paid (in millions): Balance Sheet Classification September 30, 2022 December 31, 2021 Derivatives designated as cash flow hedges: Interest rate hedge assets Other current assets $ 17 $ — |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table presents the net of tax impact of the overall effectiveness of derivative instruments designated as cash flow hedging instruments under ASC 815 to the Company’s condensed consolidated statements of comprehensive income (loss) (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivatives designated as cash flow hedges Amortization of swaption cash flow hedges, net of tax $ — $ — $ 1 $ 1 Unrealized gain from cash flows hedges, net of tax 7 — 6 — Total $ 7 $ — $ 7 $ 1 |
Schedule of Effect of Fuel and Interest Rate Derivative Instruments Reflected in Aircraft Fuel and Rent Expense | The following table summarizes the effect of interest rate derivative instruments’ gains (losses) reflected in aircraft rent expense within the Company’s condensed consolidated statements of operations (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivatives designated as cash flow hedges Amortization of swaption cash flow hedges, net of tax $ — $ — $ (1) $ (1) |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in millions): September 30, 2022 December 31, 2021 Salaries, wages and benefits $ 97 $ 89 Passenger and other taxes and fees payable 91 84 Aircraft maintenance 60 36 Leased aircraft return costs 51 25 Station obligations 48 64 Fuel liabilities 28 23 Current portion of phantom equity units (Note 9) — 26 Other current liabilities 46 36 Total other current liabilities $ 421 $ 383 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | The Company’s debt obligations are as follows (in millions): September 30, 2022 December 31, 2021 Secured debt: Pre-delivery credit facility (a) $ 268 $ 174 Treasury Loan (b) — 150 Floating rate building note (c) 18 18 Unsecured debt: PSP Promissory Notes (d) 66 66 Affinity card advance purchase of mileage credits (e) 71 15 Total debt 423 423 Less current maturities of long-term debt, net (193) (127) Less long-term debt acquisition costs and other discounts (2) (9) Long-term debt, net $ 228 $ 287 __________________ (a) The Company, through an affiliate, entered into the pre-delivery payment (“PDP”) facility with Citibank, N.A. in December 2014 (the “PDP Financing Facility”). The PDP Financing Facility is collateralized by the Company’s purchase agreement for Airbus A320 family aircraft deliveries through the term of the facility (see Note 11). In December 2020, the PDP Financing Facility was amended and restated to reduce the commitment of Citibank, N.A., as initial lender, to $150 million, remove the ability to draw further unsecured borrowings and to provide collateral for the borrowings not secured by aircraft outstanding as of that date. In May 2021, the Company amended the facility to increase the total available capacity to $200 million and expanded the number of financial institution participants as lenders. In December 2021, the facility was amended and restated to extend the availability of the facility through December 2024 to include additional 2023 and 2024 aircraft deliveries, and in March 2022 the facility was further amended to re-align the PDP Financing Facility with the updated future aircraft deliveries. In June 2022, the facility was amended and restated to extend the availability of the facility through December 2025 to include additional 2025 aircraft deliveries, to increase the total available capacity to $280 million, and to include the flexibility to potentially obtain additional commitments from other lenders. No commitments have been secured from other lenders as of September 30, 2022. Interest is paid every 90 days based on the Secured Overnight Financing Rate ("SOFR") plus a margin for each individual tranche. The PDP Financing Facility consists of separate loans for each PDP aircraft. Each separate loan matures upon the earlier of (i) delivery of that aircraft to the Company by Airbus, (ii) the date one month following the last day of the scheduled delivery month of such aircraft and (iii) if there is a delay in delivery of aircraft, depending on the cause of the delivery delay, up to six months following the last day of the scheduled delivery month of such aircraft. The PDP Financing Facility will be repaid periodically according to the preceding sentence with the last scheduled delivery of aircraft contemplated in the PDP Financing Facility, as currently in effect, expected to be in the fourth quarter of 2025. (b) On September 28, 2020, the Company entered into the Treasury Loan with the Treasury for a term loan facility of up to $574 million, and had borrowed $150 million under the loan as of December 31, 2021. On February 2, 2022, the Company repaid the Treasury Loan in full, along with accrued interest and associated fees of $1 million. Additionally, the Company recognized a $7 million loss on the extinguishment of debt for the nine months ended September 30, 2022 from the write-off of unamortized deferred financing costs associated with the Treasury Loan. The repayment terminated the loan agreement with the Treasury and substantially unencumbered the Company’s co-branded credit card program and related brand assets that secured the Treasury Loan. (c) Represents a note with a commercial bank related to the Company’s headquarters building. Under the terms of the agreement, the Company will repay the outstanding principal balance in quarterly payments beginning in January 2022 until the maturity date in December 2023. On the maturity date, one final balloon payment will be made to cover all unpaid principal, accrued unpaid interest and other amounts due. The interest rate of one-month LIBOR plus a margin is payable monthly. (d) On April 30, 2020, the Company executed a promissory note under the PSP agreement with the Treasury from which the Company received a $33 million unsecured 10-year, low-interest loan (the “PSP Promissory Note”). Subsequently, the Company entered into the PSP2 with the Treasury in January 2021 and the PSP3 with the Treasury in April 2021, from which the Company received an additional $18 million and $15 million of proceeds, respectively, evidenced by promissory notes with the same terms as the original PSP Promissory Note. The PSP Promissory Notes include an annual interest rate of 1.00% for the first five years and the SOFR plus 2.00% in the final five years. The loans can be prepaid at par at any time without incurring a penalty. (e) The Company entered into an agreement with Barclays in 2003 to provide for joint marketing, grant certain benefits to co-branded credit card holders (“Cardholders”), and allow Barclays to market using the Company’s customer database. Cardholders earn mileage credits under the Frontier Miles program and the Company sells mileage credits at agreed-upon rates to Barclays and earns fees from Barclays for the acquisition, retention and use of the co-branded credit card by consumers. In addition, Barclays will pre-purchase miles if the Company meets certain conditions precedent. On September 15, 2020 the Company entered into a new agreement with Barclays to amend and extend |
Schedule of Maturities of Long-term Debt | As of September 30, 2022, future maturities of debt are payable as follows (in millions): September 30, 2022 Remainder of 2022 $ 55 2023 206 2024 25 2025 — 2026 — Thereafter 137 Total debt principal payments $ 423 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Costs | The table below presents certain information related to lease costs for operating leases during the three and nine months ended September 30, 2022 and 2021 (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating lease cost (a) $ 121 $ 116 $ 356 $ 357 Variable lease cost (a) 50 76 169 228 Total lease costs $ 171 $ 192 $ 525 $ 585 ______________ |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other long-term liabilities consist of the following (in millions): September 30, 2022 December 31, 2021 Deferred supplier incentives $ 48 $ 14 Leased aircraft return costs 24 24 Deferred revenue 19 21 Other 1 1 Total other long-term liabilities $ 92 $ 60 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term Purchase Commitment | As of September 30, 2022, the Company’s firm aircraft and engine orders consisted of the following: A320neo A321neo Total Aircraft (a) Engines Year Ending Remainder of 2022 2 3 5 1 2023 — 22 22 4 2024 — 24 24 2 2025 17 13 30 4 2026 19 22 41 4 Thereafter 31 73 104 5 Total 69 157 226 20 __________________ |
Multiemployer Plan | The table below sets forth the Company’s employee groups and status of the collective bargaining agreements as of September 30, 2022: Percentage of Workforce Employee Group Representative Amendable Date September 30, 2022 Pilots Air Line Pilots Association (ALPA) January 2024 31% Flight Attendants Association of Flight Attendants (AFA-CWA) May 2024 51% Aircraft Technicians International Brotherhood of Teamsters (IBT) May 2025 (a) 3% Aircraft Appearance Agents IBT October 2023 1% Dispatchers Transport Workers Union (TWU) December 2021 (b) 1% Material Specialists IBT March 2022 (b) <1% Maintenance Controllers IBT October 2023 <1% __________________ (a) The Company conducted off-cycle negotiations with its aircraft technicians, represented by IBT, where the amendable date was extended from March 2024 to May 2025. (b) The Company’s collective bargaining agreements with its dispatchers and material specialists, represented by TWU and IBT, respectively, were amendable as of September 30, 2022 and negotiations are ongoing, however, each agreement is operating under its current arrangement until an amendment has been reached. |
Net Earnings (Loss) per Share (
Net Earnings (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule Of Earnings Per Share Basic And Diluted | The following table sets forth the computation of net earnings (loss) per share on a basic and diluted basis pursuant to the two-class method for the periods indicated (in millions, except for share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic: Net income (loss) $ 31 $ 23 $ (77) $ (49) Less: net income attributable to participating rights (1) (1) — — Net income (loss) attributable to common stockholders $ 30 $ 22 $ (77) $ (49) Weighted average common shares outstanding, basic 217,720,426 215,452,632 217,532,815 209,816,184 Net earnings (loss) per share, basic $ 0.13 $ 0.10 $ (0.36) $ (0.23) Diluted: Net income (loss) $ 31 $ 23 $ (77) $ (49) Less: net income attributable to participating rights (1) (1) — — Net income (loss) attributable to common stockholders $ 30 $ 22 $ (77) $ (49) Weighted average common shares outstanding, basic 217,720,426 215,452,632 217,532,815 209,816,184 Effect of dilutive potential common shares 2,158,514 2,802,291 — — Weighted average common shares outstanding, diluted 219,878,940 218,254,923 217,532,815 209,816,184 Net earnings (loss) per share, diluted $ 0.13 $ 0.10 $ (0.36) $ (0.23) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying amounts and estimated fair values of the Company’s debt are as follows (in millions): September 30, 2022 December 31, 2021 Carrying Estimated Fair Value Carrying Value Estimated Fair Value Secured debt: Pre-delivery credit facility $ 268 $ 267 $ 174 $ 175 Treasury Loan — — 150 156 Floating rate building note 18 18 18 19 Unsecured debt: PSP Promissory Notes 66 48 66 58 Affinity card advance purchase of mileage credits 71 63 15 14 Total debt $ 423 $ 396 $ 423 $ 422 |
Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The tables below present disclosures about the fair value of assets and liabilities measured at fair value on a recurring basis in the Company’s condensed consolidated financial statements (in millions): Fair Value Measurements as of September 30, 2022 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Cash Cash and cash equivalents $ 674 $ 674 $ — $ — Interest rate derivative contracts Other current assets $ 17 $ — $ 17 $ — Fair Value Measurements as of December 31, 2021 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Cash Cash and cash equivalents $ 918 $ 918 $ — $ — |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2022 reportableSegment airport | |
Accounting Policies [Abstract] | |
Number of airports served | airport | 110 |
Number of reportable segments | reportableSegment | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Initial Public Offering (Details) $ in Millions | 1 Months Ended |
Apr. 30, 2021 USD ($) | |
Class of Stock [Line Items] | |
Underwriting discounts and commissions | $ 14 |
Offering costs | 5 |
IPO | |
Class of Stock [Line Items] | |
Proceeds from initial public offering, net of underwriting discounts and offering expenses | $ 266 |
Impact of COVID-19 - COVID-19 R
Impact of COVID-19 - COVID-19 Relief Funding (Details) - USD ($) | 3 Months Ended | 5 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Feb. 02, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Sep. 28, 2020 | |
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Long-term debt, gross | $ 423,000,000 | $ 423,000,000 | $ 423,000,000 | |||||||
Principal repayments on debt | 215,000,000 | $ 97,000,000 | ||||||||
Interest paid | 9,000,000 | 7,000,000 | ||||||||
CARES Act credits | 0 | $ (72,000,000) | 0 | (295,000,000) | ||||||
Mark to market adjustment on warrant | $ 0 | 0 | $ 0 | 22,000,000 | ||||||
Employee retention credit | 17,000,000 | |||||||||
The Coronavirus Aid, Relief, and Economic Security Act | Consolidated Appropriations Act of 2021 - PSP 2 | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Funding received | $ 161,000,000 | |||||||||
Proceeds from Payroll Support Program grant | 143,000,000 | |||||||||
The American Rescue Plan Act | American Rescue Plan Act - PSP 3 | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Funding received | $ 150,000,000 | |||||||||
Proceeds from Payroll Support Program grant | $ 135,000,000 | |||||||||
CARES Act credits | $ 72,000,000 | |||||||||
CARES Act Credit Agreement, Warrants | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Warrants to acquire common stock (in shares) | 3,117,940 | |||||||||
Exercise price of warrants (in dollars per share) | $ 6.95 | |||||||||
Number of warrants exercised (in shares) | 0 | 0 | ||||||||
Line of Credit | CARES Credit Agreement | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Term loan amount | $ 574,000,000 | |||||||||
Long-term debt, gross | $ 150,000,000 | |||||||||
Principal repayments on debt | $ 150,000,000 | |||||||||
Interest paid | $ 1,000,000 | |||||||||
Unsecured Debt | Consolidated Appropriations Act of 2021 - PSP 2 | ||||||||||
Unusual Risk or Uncertainty [Line Items] | ||||||||||
Unsecured low interest loan amount | $ 18,000,000 | |||||||||
Term of grant | 10 years |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Capitalized Contract Cost [Line Items] | |||||
Air traffic liability | $ 296,000 | $ 296,000 | $ 273,000 | ||
Customer rights to book future travel | 9,000 | 9,000 | $ 59,000 | ||
Passenger revenue recognized | $ 22,000 | $ 14,000 | $ 67,000 | $ 31,000 | |
Minimum | |||||
Capitalized Contract Cost [Line Items] | |||||
Future travel credit balance, expiration period | 3 months | ||||
Maximum | |||||
Capitalized Contract Cost [Line Items] | |||||
Future travel credit balance, expiration period | 12 months |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Operating Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 906 | $ 630 | $ 2,420 | $ 1,451 |
Total passenger revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 883 | 610 | 2,361 | 1,408 |
Fare | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 386 | 254 | 1,035 | 568 |
Total non-fare passenger revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 497 | 356 | 1,326 | 840 |
Service fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 220 | 164 | 583 | 368 |
Baggage | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 202 | 131 | 518 | 321 |
Seat selection | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 61 | 47 | 183 | 118 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 14 | 14 | 42 | 33 |
Other revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 23 | $ 20 | $ 59 | $ 43 |
Revenue Recognition - Operating
Revenue Recognition - Operating Revenues by Principal Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 906 | $ 630 | $ 2,420 | $ 1,451 |
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 832 | 595 | 2,197 | 1,376 |
Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 74 | $ 35 | $ 223 | $ 75 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Supplier incentives | $ 45 | $ 11 |
Prepaid expenses | 25 | 14 |
Derivative instruments | 17 | 0 |
Income and other taxes receivable | 8 | 12 |
Other | 4 | 3 |
Total other current assets | $ 99 | $ 40 |
Financial Derivative Instrume_3
Financial Derivative Instruments and Risk Management (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) aircraft | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Fuel Derivative Contracts | |||||
Derivative [Line Items] | |||||
Cost of swap | $ 0 | $ 0 | $ 0 | $ 0 | |
Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Cost of swap | 0 | $ 0 | $ 9,000,000 | $ 0 | |
Future aircraft deliveries with option to enter into and exercise cash settled swaps | aircraft | 7 | ||||
Notional amount | $ 245,000,000 | $ 245,000,000 | |||
Unrealized losses from cash flow hedges net of adjustment for dedesignation of fuel hedges, net of deferred tax benefit | $ (3,000,000) | $ (10,000,000) | |||
Minimum | |||||
Derivative [Line Items] | |||||
Interest rate risk, time period between agreements | 7 years | ||||
Maximum | |||||
Derivative [Line Items] | |||||
Interest rate risk, time period between agreements | 9 years |
Financial Derivative Instrume_4
Financial Derivative Instruments and Risk Management - Assets and Liabilities Associated with Fuel and Interest Rate Derivative Instruments (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Interest Rate Swap | Other Noncurrent Assets | ||
Derivative [Line Items] | ||
Derivative, other current assets | $ 17,000,000 | $ 0 |
Financial Derivative Instrume_5
Financial Derivative Instruments and Risk Management - Net of Tax Impact of the Overall Effectiveness of Derivative Instruments Designated as Cash Flow Hedging Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Amortization of swaption cash flow hedges, net of tax | $ 1,000 | $ 1,000 | ||||
Gain (loss) on interest rate derivative contracts | $ 7,000 | $ (1,000) | ||||
Total | 7,000 | $ 0 | $ 7,000 | $ 1,000 | ||
Interest Rate Swap | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Amortization of swaption cash flow hedges, net of tax | 0 | 0 | 1,000 | 1,000 | ||
Gain (loss) on interest rate derivative contracts | $ 7,000 | $ 0 | $ 6,000 | $ 0 |
Financial Derivative Instrume_6
Financial Derivative Instruments and Risk Management - Effect of Fuel and Interest Rate Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Interest Rate Swap | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amortization of swaption cash flow hedges, net of tax | $ 0 | $ 0 | $ (1,000) | $ (1,000) |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Salaries, wages and benefits | $ 97 | $ 89 |
Passenger and other taxes and fees payable | 91 | 84 |
Aircraft maintenance | 60 | 36 |
Leased aircraft return costs | 51 | 25 |
Station obligations | 48 | 64 |
Fuel liabilities | 28 | 23 |
Current portion of phantom equity units | 0 | 26 |
Other current liabilities | 46 | 36 |
Total other current liabilities | $ 421 | $ 383 |
Debt - Schedule of Debt Obligat
Debt - Schedule of Debt Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||
Feb. 02, 2022 | Apr. 30, 2020 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | May 31, 2021 | Dec. 31, 2020 | Sep. 28, 2020 | Sep. 15, 2020 | |
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | $ 423,000 | $ 423,000 | |||||||||
Less current maturities of long-term debt, net | (193,000) | (127,000) | |||||||||
Less long-term debt acquisition costs and other discounts | (2,000) | (9,000) | |||||||||
Long-term debt, net | 228,000 | 287,000 | |||||||||
Interest paid | 9,000 | $ 7,000 | |||||||||
Loss on extinguishment of debt | 7,000 | 0 | |||||||||
Secured Debt | Pre-delivery credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | 268,000 | 174,000 | |||||||||
Amount of unsecured borrowings available | $ 280,000 | $ 200,000 | $ 150,000 | ||||||||
Commitments secured from lenders | $ 0 | ||||||||||
Periodic payment, interest, period | 90 days | ||||||||||
Secured Debt | Treasury Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | $ 0 | 150,000 | |||||||||
Secured Debt | Floating rate building note | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | 18,000 | 18,000 | |||||||||
Line of Credit | Treasury Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | 150,000 | ||||||||||
Amount of unsecured borrowings available | $ 574,000 | ||||||||||
Interest paid | $ 1,000 | ||||||||||
Loss on extinguishment of debt | 7,000 | ||||||||||
Unsecured Debt | PSP Promissory Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | $ 66,000 | 66,000 | |||||||||
Interest rate | 1% | ||||||||||
Interest rate period | 5 years | ||||||||||
Unsecured Debt | PSP Promissory Notes | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, variable interest rate | 2% | ||||||||||
Unsecured Debt | PSP1 Promissory Note | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured low interest loan amount | $ 33,000 | ||||||||||
Loan term | 10 years | ||||||||||
Unsecured Debt | Consolidated Appropriations Act of 2021 - PSP 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured low interest loan amount | $ 18,000 | ||||||||||
Loan term | 10 years | ||||||||||
Unsecured Debt | PSP3 Promissory Note | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured low interest loan amount | $ 15,000 | ||||||||||
Unsecured Debt | Affinity card advance purchase of mileage credits | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, gross | $ 71,000 | $ 15,000 | |||||||||
Amount of unsecured borrowings available | $ 200,000 | ||||||||||
Borrowing capacity triggering full extinguishment of debt | $ 15,000 | ||||||||||
Proceeds from issuance of debt, net of issuance costs | $ 56,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | |||
Interest paid | $ 9 | $ 7 | |
Forecast | |||
Debt Instrument [Line Items] | |||
Amount of revenue represented by customer, covenant relief | 10% |
Debt - Schedule of Maturity (De
Debt - Schedule of Maturity (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2022 | $ 55 |
2023 | 206 |
2024 | 25 |
2025 | 0 |
2026 | 0 |
Thereafter | 137 |
Total debt principal payments | $ 423 |
Operating Leases - Aircraft (De
Operating Leases - Aircraft (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) aircraft aircraftEngine | Sep. 30, 2021 USD ($) aircraftEngine aircraft | Sep. 30, 2022 USD ($) aircraftEngine aircraft | Sep. 30, 2021 USD ($) aircraft aircraftEngine | Dec. 31, 2021 aircraft | May 31, 2021 aircraft | |
Lessee, Lease, Description [Line Items] | ||||||
Gains recognized on sale-leaseback transactions | $ | $ 49 | $ 55 | ||||
Number of aircraft terminated | 6 | |||||
Aircraft | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of leases | 115 | 115 | ||||
Aircraft | Minimum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease terms | 1 month | 1 month | ||||
Aircraft | Maximum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease terms | 12 years | 12 years | ||||
Aircraft Engine | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of leases | aircraftEngine | 25 | 25 | ||||
Number of engines dependent on usage-based metrics | aircraftEngine | 8 | |||||
Aircraft Engine | Aircraft Sale Leaseback | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of sale-leaseback transactions | aircraftEngine | 1 | 0 | 3 | 1 | ||
Aircraft Engine | Minimum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease terms | 1 month | 1 month | ||||
Aircraft Engine | Maximum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease terms | 12 years | 12 years | ||||
Aircraft and Aircraft Engines | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Gains recognized on sale-leaseback transactions | $ | $ 21 | $ 19 | $ 49 | $ 55 | ||
A320neo | Aircraft | Aircraft Sale Leaseback | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of sale-leaseback transactions | 3 | 5 | 8 | 13 | ||
A320ceo | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of aircraft returned | 2 | |||||
A319 | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of aircraft terminated | 4 | |||||
A319, To Be Returned In Q2 | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Charge included as a component of rent expense | $ | $ 1 | $ 10 |
Operating Leases - Aircraft Ren
Operating Leases - Aircraft Rent Expense and Maintenance Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||||
Aircraft rent expense | $ 140,000 | $ 128,000 | $ 401,000 | $ 399,000 | |
Supplemental rent expense for maintenance-related reserves deemed non-recoverable | 1,000 | 1,000 | (1,000) | 1,000 | |
Supplemental rent expense related to probable lease return condition obligations | 23,000 | $ 16,000 | 56,000 | $ 41,000 | |
Aircraft maintenance deposits expected to be recoverable | 113,000 | 113,000 | $ 108,000 | ||
Aircraft maintenance deposits expected to be recoverable, eligible maintenance performed | 9,000 | 9,000 | 10,000 | ||
Aircraft maintenance deposits | 104,000 | 104,000 | $ 98,000 | ||
Maintenance reserve payments, due remainder of fiscal year | 1,000 | 1,000 | |||
Maintenance reserve payments, due in year one | 3,000 | 3,000 | |||
Maintenance reserve payments, due in year two | 3,000 | 3,000 | |||
Maintenance reserve payments, due in year three | 3,000 | 3,000 | |||
Maintenance reserve payments, due in year four | 3,000 | 3,000 | |||
Maintenance reserve payments, due after year four | $ 9,000 | $ 9,000 |
Operating Leases - Airport Faci
Operating Leases - Airport Facilities (Details) | 9 Months Ended |
Sep. 30, 2022 airport | |
Lessee, Lease, Description [Line Items] | |
Number of airports served | 110 |
Minimum | Airport Facility | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 month |
Maximum | Airport Facility | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 11 years |
Operating Leases - Other Ground
Operating Leases - Other Ground Property and Equipment (Details) - Other Ground Property And Equipment - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 |
Lessee, Lease, Description [Line Items] | ||
Lease incentive | $ 22,000 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 1 month | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 9 years |
Operating Leases - Lessor Conce
Operating Leases - Lessor Concessions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Increase (decrease) in deferrals related to leases | $ (2,000) | $ (22,000) | ||
Aircraft Rental | ||||
Lessee, Lease, Description [Line Items] | ||||
Deferrals related to leases | $ 0 | (2,000) | $ 0 | (31,000) |
Station Operations | ||||
Lessee, Lease, Description [Line Items] | ||||
Deferrals related to leases | 0 | $ 0 | (1,000) | $ 9,000 |
Station deferrals to be recognized in station operations | $ 10,000 | $ 10,000 |
Operating Leases - Lease Cost (
Operating Leases - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 121 | $ 116 | $ 356 | $ 357 |
Variable lease cost | 50 | 76 | 169 | 228 |
Total lease costs | $ 171 | $ 192 | $ 525 | $ 585 |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Cash paid for amounts included in measurement of lease liabilities | $ 107 | $ 116 | $ 343 | $ 339 |
Aircraft and Aircraft Engines | ||||
Lessee, Lease, Description [Line Items] | ||||
Acquired aircraft and engines through operating leases | $ 96 | $ 178 | $ 244 | $ 480 |
Stock-Based Compensation and _2
Stock-Based Compensation and Stockholders’ Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 4 | $ 3 | $ 11 | $ 8 | |
Common stock authorized for issuance (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | ||
Preferred stock authorized for issuance (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||
Common stock, stated par (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Nonvoting Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock authorized for issuance (in shares) | 150,000,000 | 150,000,000 | 150,000,000 | ||
Common stock, stated par (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Stock-Based Compensation and _3
Stock-Based Compensation and Stockholders’ Equity - Stock Options and Restricted Awards (Details) - $ / shares | 9 Months Ended | |||
Jan. 01, 2022 | Apr. 01, 2021 | Sep. 30, 2022 | Apr. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 0 | |||
Stock option exercise (in shares) | 196,937 | |||
Weighted average stock price (in dollars per share) | $ 3.67 | |||
Weighted average exercise price of outstanding options (in dollars per share) | $ 1.95 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock units issued (in shares) | 1,212,010 | |||
Weighted average grant date fair value (in dollars per share) | $ 12.09 | |||
Vested (in shares) | 797,298 | |||
Shares withheld to cover employee taxes on vested restricted stock units (in shares) | 297,047 | |||
Weighted average grant date fair value, withheld to cover employee taxes (in dollars per share) | $ 12.25 | |||
Weighted average grant date fair value, for vested shares (in dollars per share) | $ 12.50 | |||
2014 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (in shares) | 38,000,000 | |||
2021 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (in shares) | 7,000,000 | |||
Common stock issued (in shares) | 11,000,000 | |||
Maximum number of shares of stock that may be issued upon the exercise of incentive stock options | 1% | |||
Maximum number of shares of stock that may be issued upon the exercise of incentive stock options (in shares) | 30,000,000 | |||
Number of additional shares authorized | 2,170,650 |
Stock-Based Compensation and _4
Stock-Based Compensation and Stockholders’ Equity - Liability-Classified Awards (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Current portion of restricted stock liability | $ 0 | $ 26 |
Phantom Share Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Current portion of restricted stock liability | $ 26 | |
Remaining liability paid | $ 26 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Other Liabilities Disclosure [Abstract] | ||
Deferred supplier incentives | $ 48,000 | $ 14,000 |
Leased aircraft return costs | 24,000 | 24,000 |
Deferred revenue | 19,000 | 21,000 |
Other | 1,000 | 1,000 |
Other long-term liabilities | $ 92,000 | $ 60,000 |
Commitments and Contingencies -
Commitments and Contingencies - Aircraft and Engine Orders (Details) | 1 Months Ended | 9 Months Ended | ||
Nov. 30, 2021 aircraft | Jul. 31, 2021 aircraft | Dec. 31, 2017 aircraft | Sep. 30, 2022 aircraft aircraftEngine | |
Air Transportation Equipment | ||||
Long-term Purchase Commitment [Line Items] | ||||
Remainder of 2022 | 5 | |||
2023 | 22 | |||
2024 | 24 | |||
2025 | 30 | |||
2026 | 41 | |||
Thereafter | 104 | |||
Total | 226 | |||
Aircraft Engine | ||||
Long-term Purchase Commitment [Line Items] | ||||
Remainder of 2022 | aircraftEngine | 1 | |||
2023 | aircraftEngine | 4 | |||
2024 | aircraftEngine | 2 | |||
2025 | aircraftEngine | 4 | |||
2026 | aircraftEngine | 4 | |||
Thereafter | aircraftEngine | 5 | |||
Total | aircraftEngine | 20 | |||
A320neo | Air Transportation Equipment | ||||
Long-term Purchase Commitment [Line Items] | ||||
Remainder of 2022 | 2 | |||
2023 | 0 | |||
2024 | 0 | |||
2025 | 17 | |||
2026 | 19 | |||
Thereafter | 31 | |||
Total | 67 | 69 | ||
A321neo | Air Transportation Equipment | ||||
Long-term Purchase Commitment [Line Items] | ||||
Remainder of 2022 | 3 | |||
2023 | 22 | |||
2024 | 24 | |||
2025 | 13 | |||
2026 | 22 | |||
Thereafter | 73 | |||
Total | 91 | 10 | 66 | 157 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) $ in Millions | 1 Months Ended | 9 Months Ended | |||
Nov. 30, 2021 aircraft | Jul. 31, 2021 leasingPartner aircraft | Dec. 31, 2017 aircraft | Sep. 30, 2022 USD ($) employee_group aircraft aircraftEngine | Dec. 31, 2021 USD ($) aircraft | |
Long-term Purchase Commitment [Line Items] | |||||
Aircraft yet to be delivered | aircraft | 2 | ||||
Purchase commitments for aircraft and engines, remainder of 2022 | $ 291 | ||||
Purchase commitments for aircraft and engines, 2023 | 1,283 | ||||
Purchase commitments for aircraft and engines, 2024 | 1,452 | ||||
Purchase commitments for aircraft and engines, 2025 | 1,769 | ||||
Purchase commitments for aircraft and engines, 2026 | 2,362 | ||||
Purchase commitments for aircraft and engines, thereafter | $ 6,215 | ||||
Number of union-represented employee groups | employee_group | 7 | ||||
Amount of employees represented by unions | 87% | ||||
Accrued liabilities for health care claims | $ 5 | $ 5 | |||
Aircraft Engine | |||||
Long-term Purchase Commitment [Line Items] | |||||
Number of aircraft agreed to purchase | aircraftEngine | 20 | ||||
Air Transportation Equipment | |||||
Long-term Purchase Commitment [Line Items] | |||||
Number of aircraft agreed to purchase | aircraft | 226 | ||||
Air Transportation Equipment | A320neo | |||||
Long-term Purchase Commitment [Line Items] | |||||
Number of aircraft agreed to purchase | aircraft | 67 | 69 | |||
Number of aircraft eligible for conversion | aircraft | 18 | ||||
Air Transportation Equipment | A321neo | |||||
Long-term Purchase Commitment [Line Items] | |||||
Number of aircraft agreed to purchase | aircraft | 91 | 10 | 66 | 157 | |
Number of leasing partners with signed letter of intent | leasingPartner | 2 |
Commitments and Contingencies_3
Commitments and Contingencies - Collective Bargaining Agreements (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 87% |
Pilots | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 31% |
Flight Attendants | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 51% |
Aircraft Technicians | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 3% |
Aircraft Appearance Agents | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 1% |
Dispatchers | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 1% |
Material Specialists | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 1% |
Maintenance Controllers | |
Multiemployer Plan [Line Items] | |
Amount of employees represented by unions | 1% |
Net Earnings (Loss) per Share_2
Net Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic: | ||||||||
Net income (loss) | $ 31,000 | $ 13,000 | $ (121,000) | $ 23,000 | $ 19,000 | $ (91,000) | $ (77,000) | $ (49,000) |
Less: net income attributable to participating rights | (1,000) | (1,000) | 0 | 0 | ||||
Net income (loss) attributable to common stockholders | $ 30,000 | $ 22,000 | $ (77,000) | $ (49,000) | ||||
Weighted average common shares outstanding, basic (in shares) | 217,720,426 | 215,452,632 | 217,532,815 | 209,816,184 | ||||
Net earnings (loss) per share, basic (in dollars per share) | $ 0.13 | $ 0.10 | $ (0.36) | $ (0.23) | ||||
Diluted: | ||||||||
Less: net income attributable to participating rights | $ (1,000) | $ (1,000) | $ 0 | $ 0 | ||||
Net income (loss) attributable to common stockholders | $ 30,000 | $ 22,000 | $ (77,000) | $ (49,000) | ||||
Effect of dilutive potential common shares (in shares) | 2,158,514 | 2,802,291 | 0 | 0 | ||||
Weighted average common shares outstanding, diluted (in shares) | 219,878,940 | 218,254,923 | 217,532,815 | 209,816,184 | ||||
Net earnings (loss) per share, diluted (in dollars per share) | $ 0.13 | $ 0.10 | $ (0.36) | $ (0.23) | ||||
Shares excluded from the computation of diluted shares (in shares) | 208,041 | 294,679 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Estimated Fair Values of the Company’s Debt (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | $ 423 | $ 423 |
Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 396 | 422 |
Pre-delivery credit facility | Carrying Value | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 268 | 174 |
Pre-delivery credit facility | Estimated Fair Value | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 267 | 175 |
Treasury Loan | Carrying Value | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 0 | 150 |
Treasury Loan | Estimated Fair Value | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 0 | 156 |
Floating rate building note | Carrying Value | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 18 | 18 |
Floating rate building note | Estimated Fair Value | Secured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 18 | 19 |
PSP Promissory Notes | Carrying Value | Unsecured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 66 | 66 |
PSP Promissory Notes | Estimated Fair Value | Unsecured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 48 | 58 |
Affinity card advance purchase of mileage credits | Carrying Value | Unsecured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | 71 | 15 |
Affinity card advance purchase of mileage credits | Estimated Fair Value | Unsecured Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt, fair value | $ 63 | $ 14 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash | $ 674,000 | $ 918,000 |
Interest rate derivative contracts | 17,000 | |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash | 674,000 | 918,000 |
Interest rate derivative contracts | 0 | |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash | 0 | 0 |
Interest rate derivative contracts | 17,000 | |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash | 0 | $ 0 |
Interest rate derivative contracts | $ 0 |
Related Parties (Details)
Related Parties (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) director | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) director | Sep. 30, 2021 USD ($) | |
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. | Indigo Partners | ||||
Related Party Transaction [Line Items] | ||||
Outstanding shares of common stock held | 18% | 18% | ||
Indigo Partners | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Management fees, expense reimbursements, and director compensation | $ | $ 1 | $ 1 | $ 1 | $ 1 |
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Number of company directors | director | 2 | 2 |
The Proposed Merger with Spir_2
The Proposed Merger with Spirit Airlines, Inc. (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jul. 27, 2022 | |
Business Acquisition [Line Items] | |||||
Transaction and merger-related costs, net | $ (12) | $ 0 | $ 8 | $ 0 | |
Spirit Airlines, Inc Merger | |||||
Business Acquisition [Line Items] | |||||
Transaction and merger-related costs, net | 13 | 33 | |||
Merger-related expenses upon termination of agreement | 25 | 25 | |||
Termination fee | $ 69 | ||||
Legal, Accounting and Other Fees | Spirit Airlines, Inc Merger | |||||
Business Acquisition [Line Items] | |||||
Transaction and merger-related costs, net | 4 | 16 | |||
Retention Bonus | Spirit Airlines, Inc Merger | |||||
Business Acquisition [Line Items] | |||||
Transaction and merger-related costs, net | $ 9 | $ 17 | |||
Employee Retention Costs | Spirit Airlines, Inc Merger | |||||
Business Acquisition [Line Items] | |||||
Acceleration of merger retention costs | 50% |