Frontier (ULCC) 11 Nov 212021 Q3 Earnings call transcript

Company Profile

Participants

Susan Donofrio	Head of Investor Relations
Barry Biffle	President & Chief Executive Officer
Daniel Shurz	Senior VP, Commercial
Jimmy Dempsey	Executive Vice President & Chief Financial Officer
Ravi Shanker	Morgan Stanley
Brandon Oglenski	Barclays
Helane Becker	Cowen
Hunter Keay	Wolfe Research
Savi Syth	Raymond James
Duane Pfennigwerth	Evercore ISI
Jamie Baker	JP Morgan
Myles Walton	UBS
Mike Linenberg	Deutsche Bank
Stephen Trent	Citi
Andrew Didora	Bank of America
Chris Stathoulopoulos	Susquehanna

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Frontier Group Holdings Third Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question and answer session. [Operator Instructions]. to Investor conference Relations. like Donofrio, to now of Head would turn over the Susan I Please ahead. go

Susan Donofrio

Thank you, and operator found quarter replay earnings and this on welcome, everyone This of is to our call website. being can recorded call simultaneously A call. webcast. be Frontier's third

On with other team. VP, Senior Commercial; are well as me Barry and management Frontier's President Shurz, the Jimmy and Dempsey, Daniel of call members the CEO; EVP today Biffle, and CFO; as

a be question-and-answer for Following our will prepared there analysts. sell-side session remarks, the

We discussion reflected actual to could current There guarantee remind to results the on that that also a everyone wanted from performance. cause including statements, forward-looking company's on does are be factors differ file materially call significant on the the expectations the by statements not reports risk future today's and risks are contains those our discussed and forward-looking of that based in uncertainties We in XXXX I special website measures. any refer reconciliation undertake which to the update exclude our no Barry? items. to today, with on available that, is opening non-GAAP adjusting release, periods of for be his will quarter third Barry results With the turn will over to it to remarks. comparing our SEC. all duty And earnings Please statements. our for forward-looking we

Barry Biffle

time our third attend to quarter Susan. you, the everyone thank And call. taking Thank for you earnings

delivery with reliable to thank customers. nature quarter and proud business This their the of very in and I'm service recovery resilient for the pandemic. of in them safe our step path our the continued the reflected remaining to managing dynamic another of team

reliability. capacity our high delivering a the level of we operational During also quarter, while increased

transitory impacts second delta XXXX, getting while to nimble We variant focused the to further back being from and to on continue address quarter full utilization COVID. in the remain view airline any the as

pre-COVID. levels per to we achieved also the which than higher achieve $XX were We passenger, is able in ancillary revenue

the While vaccine treatment pandemic strong us children as XXXX. progresses has expected, the while and by new the and to domestic any to demand demand our see for support therapeutic year build the into Daniel continue provide than recovery expected we on approved for of to continuing recovery we vaccines international performance. In moment, network the of the boosters, broadly, More be our lasted sustained and opportunities expansion quarter will longer third through you and plan performance revenue ancillary end returns going forward. a our take

relative advantage in over On drive to be the being offsetting reference cost our cost total our our in the expanding efficiency all by aspects eradicating driving our update. business side, Daniel it and a And relentless expense. costs. to of commercial lower we're I'll including efforts interest on to focused by in waste when now mean cost turn and provide advantage fuel to costs, we relative clear, we inflation

Daniel Shurz

the pre-COVID day XXXX quarter, a in quarter with X% increase versus is shorter average in amount period passenger on the during factor million of had you and Thank than while revenues comparable the thanking hard the We $XXX, quarter XX%. to from higher second of comparable the We of $XX with generated length. per revenue ancillary managing reliable third our total an low you, We XXXX. revenue the their to passenger the of pandemic, reflecting X% average pre-COVID operating Frontier of quarter service and which our XX% all $XXX for I COVID the want X% Barry. stage during in in in XX% XXXX delivering team join per work increasing customers. safe during total per comparable quarter generated a departures in

in St. Jose, expansion network On California, schedule domestic Opening Costa stations Vegas. and our and Las we continued Rica during our ever third we Maarten, in introduced the international largest San and front, quarter. network Burbank, the

XXXX being into stations daily our balance our in in last Orlando, station will continue for largest the expansion And departures of we added ever with making winter and in Our schedule week it introduced new schedule. Costa terms largest Antigua, Rica. of the Belize

end airports. we in things we mentioned seeing are in for the our we such eradicating the action focused significant paid we ensuring get are certain increase don't we're per As relentless as and that grow as financially airport on on To network excessive way eliminating in costs. disciplined so doing a of Barry we're employment cost that taking race

first California San earlier decision Jose, the to XXXX Dallas Washington LAX and our Newark. we ending service in this of to year, exit quarter Following in be will

we As fare improves will the and revisit the with if any relationship decision. cost airport

a credit earnings record of overall confidence post-COVID strength the our As Den over Encouragingly, With Barclays memberships indications and variant new of this the quarter number our ancillary incomes, including an our it accounts the performance. we've our details business provide recovery $XX. demand. start to the I'll delta months card a last case on recent of see opportunity competitive on record that, to our household more to XXXX and ability has adding Frontier early our of momentum ancillary our plan environment, we number growth discussed in last associated passenger Jimmy to strength of per combined our the of loyalty turn of our revenue two in rising with and both levels. fare confidence our with in The gives counts financials. fares underpins both program target the as us the potential. which volume Discount and revenue increase improvements And over demand call, we seen impacted COVID with seen We've we manage in in as stabilized, growth

Jimmy Dempsey

our we third while a net Thanks quarter work hard as through the We want team Daniel. dedication income. GAAP disciplined. thank were basis profitable the million in of Frontier $XX staying airline for I the on of members all also and to manage their pandemic, financially recognizing

of and cost of net share per our million of associated Our CARES XXX early $XX with number excludes $XX the items. million of loss special include $X.XX These $X remaining or Act lease aircraft. adjusted termination million of a credits

quarter the remain prices, and the ended the by was filed quarter during XXXX. $XXX of we a $XXX While of We unrestricted current have rising first and tax disciplined fuel tax third business. million financially and managing the annual equivalents with quarter delta impacted income our the in cash returns cash million receivable from variant

the be outstanding under continue focused to on at treasury We facility million loan $XXX time. the the appropriate of repaying

currently assets will available our make unencumber enable the to previously credit and that card loan and collateral collateralizing access treasury liquidity this are As if co-branded program to that us related highlighted, brand needed.

as quarter billion quarter financing has last sheet We debt ended financed new expect our secured during its aircraft. co-branded highlighted by program $X liquidity company two adequate brand have other our by untapped the Discount we airbus of returns on and by aircraft including subscription after lease through sale with offset program We Den balance AXXXneo addition XXX XXX of Daniel, the retiring transactions five third assets. believe airlines. fleet credit the approximately aircraft the strength the partly the in and our based that related including liquidity While of card loyalty on our programs potential with were

We have in fourth planned deliveries no the quarter.

of per measured prior quarter. business. AXXXneo most aircraft of per fuel flexible fuel-efficient We bookings. fleet of in the XX% and Our getting the change almost the aircraft introduce generating will of major to fleet XXX the be during adding is ASMs of quarter utilization the fuel ASMs on continues AXXXneo by all airline in focused the year gallon the of we remaining remain the second unpredictability XXXX, to address our efficient on carriers COVID-XX is than steps U.S. when another consumed, and gallon XX% to second while to efficiency comprised the XXXX the back our half of full in larger

As had delta August a quarter. entered fourth significant bookings on variant as impact bookings the and we a in the airline's through Daniel creating the forward deficit September outlined,

September, normalization at levels, During experienced fares. volume the discounted we of but

Holiday an season seeing approaches. currently are levels fair as improvement in the We

continued have to creating fuel However, cost increase short-term a prices to overcome. hurdle

guidance These latter expected variant with the improvements cases release began forward offset stabilized. the that by earnings from effect along delta as of third the prices. partly consideration part trends higher lingering of during the the are Our booking takes summarizing impacts COVID-XX in fuel the into quarter

guidance and in that, quarter some result, XX% earnings our back our guidance is margin quarter With As for XX%. More to our between third range be for adjusted can income release. a on hand found remarks. net Barry closing our loss it will I of fourth forward details a

Barry Biffle

Thank Jimmy. you,

improvement recovery, strong in COVID a of the we're and delay financial a and lasted we're position seeing delta the in any longer expected While than us variant created demand. has has in

advantage have growth We about business business operator, With up to model of the opportunity the proven please excited of that, is future more and questions, a poised we open the and that our for future. resilient call couldn't be take

Operator

you. We have Morgan Thank from Shanker Ravi question first your Stanley. Instructions] with [Operator

open. Your lines

Ravi Shanker

months earlier Great. takeaways year industry pricing we a that pandemic. positive few the conference Barry, during this of your a of ago that at you one said saw discipline was kind biggest

release of to of just both that you pricing into were environment than base XXXX the of how discounting back describe now? see fares And get some up your [ph], you fares that there please? kind Can You in right mentioned September. in ancillary competitive evolving volumes for

Barry Biffle

conversation, it was talking seen starting. prior delta than We the more had probably XXXX. to we the Sure. variant industry pricing about If recall had since across discipline I the seen honestly

fares. to it since worked if when advantage to that obviously what systematically to that the variant our of September. pleased environment break delta team that restrictions though see of continue We've that and reached hard XXXX would to look revenue levels we confidence away back as And get where that we by kind by recover of management as be and be curve of hit. And to to come the a a the we believe the through variant really methodically to we demand delta demand demand spring highest you take of should revenue whether the July, from was depths we booking seen levels, gives was seen through We kind spring. raise perspective which has a continue basis and level so seen volume and now look on daily and have APs has point the us time now sales kind strengthening in the say the roll so forward that washed from we to rules, yesterday continue that I'm we've like.

Ravi Shanker

you airlines. kind it. airports certain What's to the something Got does kind and follow-up, back while mean, of sit mentioned of the the any kind that's fees that? those And go I it's of airport flagged for out that's to back you to airports solution of obviously it to that kind things on sustainable how kind of do long there normal just helpful? changing the and understandable, a of kind and fly be to long-term That's Or decision my by that color great. for been take. your all that's outlook would kind of forward come when

Daniel Shurz

Thanks Daniel. Ravi. This is

and We're times growth more so cost airports. a going think effective. airports we be ways of depending and airport. multiple look with I try absolutely see come going many this those to absolutely, to And they'll away at figure where back it I situations opportunities and to said have driving to combination that they realize as make we out their year. we'll costs And to service potentially it's on think the

cities made We a to are look, And we're on in so and places term, multi-airport for decisions number long And And for the much cost-effective regions. us we'll in it do of what cost-effective more those finding have aircraft short the that's metro in ultimately lots there the have fly our are places for do we've put airports we if term. than long from of term. to those airports cities. to more the

stick will come airports. and But some costs down don't will lower will down costs I yes, think airports costs So be see come if back. with come we cost if we down

Ravi Shanker

helpful. guys. Very Thanks

Operator

Barclays. We Brandon have question Oglenski your with next from

open. Your line is

Brandon Oglenski

spring and afternoon everyone getting Good by taking about guess, I hopefully my from normal. your break you response to Hey. that to Barry, thanks for question. back one in Ravi, talked

think by too? full unfair be really think utilization Do can does just back Or you I there? yields. key revenue on the profitable structure then getting and you

Barry Biffle

passenger per We much and I but sales this. difference we expect I education you a not people especially think profitable volatility to gotten not normally, levels. back a quarter-to-quarter, this lot there's between revenue think of would clear, week-to-week, be month-to-month if what an and get be revenue. definitely about see I have happens And the and XXXX there's think look, And confusion pandemic to to during

need sales today over we And look all so, periods, talking for the travel three sales talk about months. all when to about we're you six to which future next

to And those takes getting revenues you're if booking the levels, flown of from it in XXXX so, even revenue passenger through curve back a order materialize flow to per a for full perspective.

than not immune fuel what all fares about that more need of factors and us But be that that by put optimistic perspective in the climbing dollars, back future? which things load fare we're variant. we're that. that should the and will and to we're we'll to levels and we cover was total But believe good telling is Yes. really from we're leads the So an caused out little you that moving XXXX we're spring pretty in of seeing is a to see overall dent towards what to bit believe revenues we're delta our we obviously

We trajectories. current at profitable will be the

Brandon Oglenski

Okay. I Daniel, And Appreciate talking getting about guess, full that. utilization XQ. back by jimmy you to guys or

were right? capacity growth half think in you of we next year of XX% full be XXXX? means the you I be So north taking thinking versus will utilization should deliveries front where in

Daniel Shurz

We're originally through still QX it's we planned. we capacity to probably Brandon. XX% think had up look should what like. Yes, think We about than lower working what

period around need finalized work. it we break. think be think we at still issue We a recovery sustained the the But off-peak The post haven't moment, there'll happening that's yet. spring

And focusing doing the deployed the we're periods periods and on so, that at the in capacity moment. it's off-peak those

up ASMs be year-over-year. XX% we And capacity to our was so, about than previously we lower bit think a little where in what thought it

Barry Biffle

Go ahead.

Daniel Shurz

a set haven't final We number.

Brandon Oglenski

Right. Thank you.

Daniel Shurz

Brandon. Thanks

Operator

Thank you.

We your question have Becker with next from Helane Cowen.

open. lines Your

Helane Becker

thank couple time. much much, a for of just Hi have everybody and the very you operator. Thanks very I questions.

hasn't is -- on I a and specifically. station is guys strong the are I demand Costa you opening yet The know think Rica been like that second one I in But first second market you seen this greedy. a getting said think I've in there. just going that

And weedy, you seeing group seeing. in market you're something isn't I peer the that was opportunity? I like talk just that of it's obviously, that? about just So interested but know Can kind

Daniel Shurz

question. no, Helane, good a So it's

islands. seen the lower We're strong internationally. Jose near following lower There's again to our fares work. also bringing demand Rica feds. consistent I people have and looking digital what, What -- the leisure out other market. a think, Rica at Costa and and we're from I'll about interesting that we're would go network. summer. a adding talk strategy. deployment is lower exists. it the destinations there two it's same We fly And the of the what we're stay go frequency to that nomads. bringing in we just shore frequency fly market into Rica incredibly know these expansion for our part weeks We for we've for much our in few right leisure We're demand across as I a and that's things. And we Costa also One that's opened is level. differentiated Liberia We We're much the in San which Costa level right fly network point in to our

Helane Becker

capacity of B. to my It That's respect subpart growth then, it's with this other really is Thanks helpful. And seems question Daniel. like and kind and XXXX. in A

And needing break for off expect trouble. of you jimmy just next subpart demand earnings for strong the with said year the about the on would that, talked think earlier you So calls year peaks strong spring is Barry A in demand one still I holidays. be the

aircraft, back about of our demand a levels, that as and is XXXX get assuming thought replacing the level for means that And of you to you Christmas, that grows I'm kind many aircraft subpart bigger you B see it capacity, to know smaller respect as thing. factor would we to demand quite of are or to capacity Thanksgiving coming have question as is kind that beyond then got So And better seeing worse? to is pilots. is. talking you with I in. you the you've to aircraft good won't need which those get whatever and pandemic out next of GDP I'm of even And grow not a getting that levels back this on normal hire ability the gating is or and

but there, So a two pick lot maybe in questions?

Barry Biffle

confident I ever holidays remain Helane. I that big. the today mean, as are as to Look, going Thanks be Sure.

is since call. you put on the a last what think the last the What's delta for spoke demand. to last we happened though three months variant damper on I happened

it are and obviously, it everybody so, of even the holidays seeing -- really The like October booking. hurt November. Christmas September, hurts booking. Thanksgivings end really We're And August, now front

think the think I the the to going If or biggest that One, things. the variant not And Christmas office still get to though the that ever. a while then challenge people traveling. not a around The by office quarter long in I soft. to caused time the are periods, they're we're think one best I couple if and a we've to they're that's moved delta lot January. delayed I largely Thanksgiving of well, had periods return have to say have of in it and driven can

indirect And the just I that to then think that direct their us, hurts in to international. ecosystem. are that bodies second homes proper whole in unleashed the wide the business back it thing So the isn't is go to but hurts being travel, it's travel which now

improve. things start we as go capacity out, see that that see So, suspect I you'll to

now full So just just vaccinated fully to yet. got is now X XX now just not have that reality their right? shots. vaccines, the the kids approved. you They're They're children getting that other The don't

death But So look period's most once probably back the importantly have think we're that start will periods underestimating I everybody's off-peak soft that eliminates in. in why think everything beyond the you'll good. like see fill therapeutic year you place. the slows that this when flow And available pill The that little by That start be once think a but shoulder I bit through think down. we're And Holiday you office, still confident end. by power that's yes periods boosters I in the of the those and to good. I XX% by spring be to will

Helane Becker

you. Got

you. Thank Okay.

Operator

from Wolfe We have your with Research. Keay question Hunter next

open. Your line is

Hunter Keay

Jimmy, everybody. back say expecting are what for Hey, XQ? in you least at gains

Jimmy Dempsey

fourth Yes. the We've deliveries no in aircraft quarter.

So we related don't aircraft quarter. this expect any to gains spec suddenly deliveries

Hunter Keay

Got the which Okay. a me the If back transient? much much And number to this How pressure? first it. How question. line of to understand P&L. just Thank just on you you. is sticky? items spending help little maybe the nature specific please, is then in this CASM the of driving ultimate could that good feel integrity. that XQ operational the ensure or How you bit is is much What

that understand Thanks. for please? guide CASM me XQ help Just

Barry Biffle

into back entered We if objective way all full to quarter. back was the towards end to the airline this you get our of the the you Yes. fourth year, got trace utilization as

X% out variant if been capacity close flight hiring you September, of the through in we've been between plan we've we've X% that. October And since business. the delta of to so, satisfy attendants came And order And flights. anywhere and the taken canceling in look pilots about and

through the higher And So really to differential not gains certainly biggest airline. quarter. you're capacity. little to in you the we're then other of relation X% crew the referred probably million it's inflation the $X every inflation. bit less in some a bit about it the And We've And also carrying of is than lease seen summer. terms to But We like back there's through a sale X% that of are occur about in to. cost quarter. immune

to airport the So we're and largely and But inflation relatively uneven through around disjointed in have move the element airlines airport costs across linked industry on capacity to the the small context of costs mentioned other pandemic. coming base. stations cost an calls like some our of their particularly in is certainly the starts on as and overall seeing industry there

of sequentially what's And really just we'd out. items expected so that's bit that happening. higher a I but largely And QX little it's than the because than laid

Hunter Keay

you. Thank

Operator

question We have with Syth James. Savi your next from Raymond

open. lines Your

Savi Syth

Maybe everyone. afternoon Helane's first to good little bit Hey, up a just follow question. on

terms in industry those I lot fleet training for like mainly are know like you're kind standpoint, kind summer And infrastructure like as what there's of -- is an able I'm changes to to hiring get plans and Just to seems of of confident a training it capacity. just if of I about meet was your kind doing of wondering a XXXX whole curious being It from your hiring seems and things that. the targets.

what supply on training flight and mechanics? curious attendants your like across just capabilities of So pilots, views and are kind

Barry Biffle

let's Well, go by work group. just

line move right in starting pilots, eight training can ago larger delta the just with captain's extremely when frees because flow to to airline the significant But over out from take Hunter's just plans this crew airline a to pilot months. hired the the in But the with we're cost. moment to now then training when to hiring the And plan seat. question officer's ways So to process change that advance a right have like through we fly as and simply getting if variant plan a We seat. first pointed on we That first confident. the the now. to being out stuck up however and excess to we seat go we out six someone from you whole get long recruitment just you officer a

isn't door getting classes. look got And to and today XXX% bit satisfy fill September, property the that. able so, in on And There can in. captains and But these we good. confidence now fact, that. we've front that shortages. in We to like in little we did for once attendants with at feel parts when incentives already people a back through past QX business, we've the people forth. continuing half unemployment all of year next training Flight managed satisfy because our even to are we that so we we're my so and all the seen seen need on be places almost to close upgrade is closer of into the and order been the that the We've in really have forth the that we've cycle

feel of about snap The attendants. probably most the well. the recoveries. one Probably the really many most as incentives, but hit So, good airport unemployment by flight is staff the of dramatic probably to back the quickest

So we feel one in before I And a and we've there very United think shortage the that. that's States of is the highlighted this that good about area maintenance. and in one

out can around I in if sitting do today. there are are premium that mechanics But be right to from we've going folks working number And to we're that start to so of it. and efficient wrench make much we how to the not make that qualified we and their And work with hand are have they've an well, be paying And there. sure at them. at we're got a business figure partners a working? out have I'll hours technicians our tell saying, And many we trying of you how you sure on continue perspective, airplanes efficiency looked more

as changes would managing pretty have it the good the that x immune the into we costs. about gave and pretty that feel we say that would situation today. well And success increases have challenges think fuel know we're for we're And probably XXXX I not the think that those people we good while the including trajectory. a And materially our modeled to workforce guidance our good the sub we thinking pipeline. overall have out. further had, something we and incorporated So on that better handle their about I we that inflation that unless be I We feel

that if your answers So, question?

Savi Syth

here about you Barry. up the And then, to helpful. think for No. just the if target XX That's for I from amply XXXX. I XX revenue extremely moving on ask might Thank

a just better driving Just what is Frontier bullishness themselves a kind kind card secular to products buy talking on may Is Or It even your driven a behavior experience? you kind that treat standpoint? customer about you're kind the of be overall demand you've seeing and heard ancillary or more for lot of think airlines of really by loyalty being a already premium of to do sign-up strengthening. and was credit just strong. of that, trend some

Daniel Shurz

a Savi, It's its Well, Daniel. great question.

I the think really with look, by sort ancillary when got the for seen a our color for seen do we've products. pay -- money notably both. And But quarter. what led of think I we've products we performance core buy-up what you've strong the to of

equivalent there think it's the credit approvals also thing. credit the about. So same the the credit that bundles. and our And card tied The talking it's that's -- premium and absolutely strength the applications, quarter. card I there But of seats we're our our That's been card seeing premium. for the that's products have some strongest strongest in of other airlines

in we With well. we've and got extremely are we've And this yes products premium all market. things for to And lots driving part continue stronger of I what's the customers can ideas these going perform think this of credit our products to of sort it we target. this step sell discounts when think working card of the seeing in as in you're own other to got and well. both in that's we -- pipeline think long product

Jimmy Dempsey

add I to Can it.

add me Let too. just

or time the the months positive of industry lining an this spend negative as XX inflation. know don't on and talking probably on incomes. I silver we over it think last in the about the And is bit. couple I our But keep people

reports through latest at long and been they've extra time long, that look in flow just than we're these to the extra money seeing a that up You they're more products.

all in types seeing other You're industries. of

about down revenue waste real. manage cost the sure being of we're opportunity side and And we inflation, relentless the that so, eradicating while making is

And for pricing so. to our more share we're power move as fair going and to make that buying forward of power us. sure we that translates we more get

So we're it. about really excited

Savi Syth

you. Thank right. Thanks. All

Operator

next from your Evercore Duane ISI. question have Pfennigwerth We with

open. line's Your

Duane Pfennigwerth

Hey thanks.

lot feels starting think improve don't the you it is I bit. very about whining little strong. So like strong. the previous here RASM northeast weak the and just it XQ Can to of just drawn on because I'm ever maybe like this. the sequentially, opportunity as you know I've guess peak and comment seen on know just finishing questions of I a I mean a that Florida you

again on ancillary. So, decent you like you we're finish strong say to can here. just got And momentum going

off the is improvement table? So RASM in sequential

Daniel Shurz

sequential Duane, alluded its went the bottom that the bad are lot But can the improvement. Daniel. driven into of we to a part seeing improvement. deck bookings we jimmy No, The challenges absolutely of the of quarter believe in earlier not. spike. so see we is and the We delta with

So expect continuing to the future future at expect delta is impacted that for to variant. of expect see beginning going slight improve of of travel. impact a how overall, we as lot Because impact continue. to because be of trajectory we It's it's sales, the the probably but said, we Barry quarter, the the yes of that and and

was the continue And improvement that XXXX we quarter goes highlighting. And so into we expect that as on. to Barry improvement have as expect to

Duane Pfennigwerth

new high-level the to started and profile how we hard international. is maybe to Yep. bit revenue given you a That's the you a timing helpful. of talk this rhythm domestic markets the on then the just But how compares Can international unit a new of markets? bit quarter, again, And little push on, the of measure. made

Barry Biffle

right a for our quarter fourth new international ones the around of now. Look, lot we're starting

announce demand the this are in in demand December us week January as is very peaks. markets seeing seeing with for which to strong is is and strength markets. So for we're starts how each built they're saw international just new deployed demand We're early our Cancun winter, we've is leisure obviously winter. We're Cancun market And any what ramp. more we've continued seeing starting. comfortable service capacity But And what good for international well. on building in led these there and those as we is trends

Duane Pfennigwerth

industry, the this dead certainly the at we commentary airports et that. And we've of a across call around Okay. certainly but inflationary lot appreciate then, cetera it a and questions can't some of had horse which point

at it a maybe Just little to differently. bit come

seeing and any on groups front are to your better? across labor on the any look that your yet availability vendors, relief you As you changes

Barry Biffle

Yes.

we've bit. wanted airports responsible the talk little that actually we now. challenges, that. a for Jake to where what we're little about I'm to definitely think our going acute had I seeing a bit but most talk Jake seen He's Filene ask to

Jake Filene

- A board level lot the to Yeah. across done across improvement we've seen increases wage June attrition you network, look a if the that in through through had year-to-date the is October, effective. rates, then down. rates attrition we've those city at year-to-date seen of at our we've coming been retention due and material change targeted, September, really and We've in very have

Duane Pfennigwerth

you. Thank Okay.

Barry Biffle

Duane. Thanks

Operator

We have your Morgan. Baker JP next question from Jamie with

Your lines open.

Jamie Baker

this have my addressed, Most everybody. been afternoon good Hey, questions one but of try on.

and entity a the sit is advanced have around, come ideas industry fuel So simple a reducing do think as Trying in then I higher a to be fuel it one small, normally the has capacity. yield you're it's up only the fuel, I'm smaller box? tickets the up internally And maybe you included. just though, airlines, nimble around from evolution will suffice road. the know question? about seems ever outside levers without too and you thick because to most of fuel, pricing car it something tightening down selling to smaller no don't to response push like I'm to asking, a and curious the re-running of I or the club throw different you're specific goofy know, mean, booking like obvious. window stating thinks possible recapturing or

Barry Biffle

spend Well time We on this. answer lot be of incorrect. would That a I couldn't no.

laughing we're a the that white from here board sitting in or notes fact things some laying various ago we're has talking a there's week in. about because room some of these In two there

look, the deal. So here's

your gallon all math XX maybe we that gallons gallons just in factors. load XXX miles, get if And a of First X,XXX XX about per seat. fuel. you percentile per do on XX the miles roughly

We I do average. But the more they in the and need big think all bucks, you XX%, at think the about XX% broader two just like the time. this industry four, on a So bucks XX fuel, when look math half especially at

They need XX do about the you So just gallons. math.

$X.X, that is industry So right versus got in the a needs out of it. cost that And the we times, that gallons only need them. we full we've of the amount money. The have eight gate, differential of advantage portion

we're our us we their of of gives is you position team management cars like that unique And where the a So to I hedged aware gas. But revenue have, I'll them. pressures. acutely said we're kind of against fill up They earlier, price structurally not economic tell too. immune

on it. at by watching moving non-ticket will been the we've XX XX XXXX. And with to start So I we're

will ways you future can fair look and fuel on that our sure If at plus in point at the looking that what and cover increase brings very per that to passenger that ultimately at paid elevated you ensure if the initiatives revenue levels RASM stay in that total other other the XXXX to the these fuel. make non-ticket we prices our do the largely cover near versus math we We're some these at it.

Jamie Baker

a the reporting airlines. are date doesn't thinking focused is November about pulling periods it Thank just, then Very is internal And like winding small net? feel and just the understood week in period, consideration investors Barry. most I'm but second second the the there to thorough. forward of I bit. just when the you, IPO is it any on given little feels May the it's But Okay. call that because down. like timing, And

Jimmy Dempsey

Yes. Jamie, here. I doing. Jimmy hope you're

August. we quarter of we a were that the internal previous at week some through all why reasons year. the late reporting this around were were I report is and least There anticipation earlier the think Our we Xrd next way

anomaly least than expect so we Yeah, report a an just have this going And this week just we'd to earlier -- at it's forward. quarter.

Jamie Baker

Got it. guys. it Understood. Thank Appreciate for care. thorough you answers. the Take

Barry Biffle

Thanks Jamie.

it schedule travel up your Sorry messed if

Jamie Baker

get a calendars all. about of other tough lot outsiders the again people's it's I right no. through and see getting on Frontier at be sometimes want in just just that can to now break now. No, and I'm attention to it's thinking -- it sectors hard to Not deep are knee

Barry Biffle

teasing We'll was Jamie. sort get We'll you out. it it. I

Jamie Baker

care. worries. No, Take

Operator

next Walton with from question UBS. Myles your have We

open. Your line is

Myles Walton

Thanks. Good evening.

the be year-on-year per maybe that gallons, Let's X% gallon. a largely you've detail That's little more that XXX XXXneo stage excuse down comes guess, as trend going use for we leveled? fuel on as the about efficiency XXXX the is gains we would in you XXXX, next been of talking versus I because should forward second What of year. and length me, can bit fuel efficiency ASMs of even a pick about fleets thinking look XXX up the about into half

Barry Biffle

not I'm at the So actual. looking

XXXs I of year. the think you Maybe possibly may had last be comparing some of CEOs [ph]. to we some parked the when Yes.

our look, if miles fully run our right rate fleet it think, is got per around I we've So XXX operational gallon. for

been -- we it's the pandemic. were there So at some the historical looking I think mix when a of could have through

fact, we heart the parked, had actually XXs In neo. the the are addition in in of for to the example, very pandemic all which efficient

go you to next year is the points. So a of couple that

Daniel Shurz

summer, to the XX Frontier if obviously to saying. We're add sequentially pre-COVID it's doing at we so per Like to now what Barry's in miles you close XXX hotter gallon. it's looked were just about Myles, it what see the four three bit little and you X%. X% into comes to [Indiscernible]. largely the years year. lower X% And next a was between expect earlier that inefficiency or somewhere over in the than

X%, really going to X%, that's not you And It's be see. so what X%.

the of now operated fleet You've got as two-thirds aXXXneos.

the you in it's the of see zone. of the just You X% efficiency. which an then above improved gives kind XXXneo, But introduction

Barry Biffle

XXX Myles, gallon to XXXneo our per when seat. specific, configuration, give it's in per have miles approximately going you next bring that we And year the with to

why X% because a flow again aircraft the just a It's that's year. X% step change. it's most ever business math, you're function efficient good through gaining in had. And Jimmy's to So pretty bringing we we've the as those talking about

Myles Walton

it. somehow ask Got of maybe curious thing as to of next corporate recovery. you're bit magic And can to to we sounds the and the should that spurring I'm office from just other network we that I like That the sounds poke and and through counts. It everyone a pointing vaccination coming the And completely back question. case if leg well the little -- sort as pill reopening separated on then leg the the more else's? next as your going levels is really

Barry Biffle

These general people in a But it's Well, who for need on just you obviously don't of lot the their midweek are it's travel think offices. office people you just -- But I take back sitting when house place. a travel right? own not dime. travel in even that, structural many are when their as convergence business much their one they're not in further That's general are around they When in of I'm not issues. people a for need travel. their same to saying

four is drag not of expensive. family go international a a an leisure and on bucks industry. this a travel. test been more consuming, The to has and got you've on destination if and on kind getting each But that still to do international to time international so pain couple there's And some a that's is PCR and only more that a There drags announcements of the a is it's you're hundred every And drag. day. positive spending drag a

that. got you've So

got pills. You've the

to litany going things, of whole of and right? On you're year. it several we top just clock to calendar lot points already better the a turn we're demand So additive. into as the got the seeing, that that's You've have next

Myles Walton

Thanks.

Operator

your from Linenberg We with have Mike next Bank. Deutsche question

open. is line Your

Mike Linenberg

things just update of Jamie's a Barry actually out I us of Good last else Hey. sort since think and afternoon fact mid-quarter Hey guys everybody update that worsened the everyone. quarter, counter an giving reported. in like comment. had Because you appreciate point you're this materially on and quarter. kind the had how when a late I go it's

it nice So to was in real kind that time. get of information

do right guys? the but what's at day of definitely for you I counterpoint you the end the to there, So, got guess

Jimmy Dempsey

been decent vaccine mean a an of I jumping capacity. front amount of of got somewhat maybe mandate. some untold story. in that operationally, you've out it Just the at I question peer is that's you the back you've think you And whole how group your of here. to about a done fact guys over definitely adding look outperformed that I have When despite

early up I flight per aircraft number? think now? Hawaiian. do believe about what's numbers? you were as business will think you put to how United that right Like you many and continue growing domiciles have appropriate to you pilots What's these do domicile. attendants guys with about You the the good allow How the But number

Barry Biffle

a in So that. lot

thing So that design what is a big operational do. we

time In through of -- VP fact, we fares looking spend right. Design. mission Network network just is is a done title our mean not lot what the is I low and head his our of his network, title Operational is of but reliability. And drives

things cause support that We look in And looked that we've and at look and caused maintenance past support takes then construction. the cancellations that reliability. to it challenges schedule that, at crew to takes things the it controllable have that the the so, at we to actual that

mean especially more thing and that be working majority that's years three during seasons was them for some And or of from a to four seasons snow having network. than impossible requirement for nimble nearly move up is through And by crew multi-day probably into two out perspective thunderstorm we kind a it's are first run modular of what and the and our that weather been largely the a to day not had trip being less sequence. days we trips a so and with almost COVID. to it back to We trips

that excess bases when maintenance many amount out to the we pays strong is you we're but And think right necessitated But minimum a we've a resiliency now more you we bases. made effectively then constantly offer and is size And to believe have, as costs. a our lot what at more through concentrated see we has need but more carriers than reserves eight grow. crew reserve trying paranoid that have And reliable this then about across to and places. looked pretty not efficient operational in recipe. places those moved safe our We've labor more put lowest continue the work parts on fantastic shortages. the each think this we cost more out to do about and or reliability. debate have the which of So, in we'll you other off a early that a footprint the we're possible. backs. investment way in maybe to we're that looking together would That reserves make preferring mechanics Because have best And we in system, I have little do I were probably I the And we job. make at year good sorts operation to we've and while the think that think we perfect, in that did sure how

curve. everybody of If the go month I the just think of of to to is you and ahead were we country in the And of kind realize June. what March, try entire didn't the April, then rest was May we going everybody restaurants and airlines, hire not but

was a so XX% hiring that of XX% kind last to probably challenge. of And

And just vaccine the final that one. now, put you I that so think the out have Osha mandate today

fall that large got you've employers are required the we And which have vaccinated. or be test, government some plus second contractor. the that XXX not category to a then because we are are So in you vaccinate

safe a do way. and are some odd and we're XXX now in compliant There's pages that. fully sure smart that. and through are rules. do I the of compliant think into run effect Xth going we process everything it we'll to But operation right we and that goes compliant. to to through that and make working working a can we're We're we so sure make with And we reliable that January And

Mike Linenberg

up just that's to your bit Savi's of sort this quick of ancillary I just over could the just a XX Barry. If in basis. And a a question. follow-up mean, super look fit and Great. stats year Daniel, here is helpful, maybe on and one two-year a I I again at is little like on

it's going haul your the of usually stage the that the down comforts. me, on ancillary when is likely markets. think Your usually the ancillary these people I'm thoughts buy departures for of the Are I X%, excuse thanks realize And so into more up questions. international higher to you just And a though extra you Any to international for that? rate curious some take you're taking get stickiness into as and longer move about length I - you anticipating move early. on as

Daniel Shurz

we part. experience length a markets. that. of between Absolutely. in There's I'll we exactly see premium more lot less -- have answer and describing up premium, see This at sort Cana. system. trade international experience overall more yes do I'm different performing sorry products state there ancillary international premium between stage a if mix. different Cancun slightly quickly It's that That's long impact the it but are and tend tend the and look Obviously, in overall of nodes And summer different behavior. relationship of does better. things Punta that leisure our to length we're the fare, we do of for that very that But see between do We both we purpose up. and first we the to have work well. It's trade customer a travel, slightly Mike, behavior stage

Mike Linenberg

Okay. Very good. everyone. Thanks Daniel. Thanks Barry. Thanks

Operator

question next one Next Trent Citi. from your have we with Stephen

open. lines Your

Stephen Trent

know to cutting envelope do aviation, green others? the animal versus you. footprint of will side [ph]. it symbols more in to Thank what for curious, about coming very addition really Thanks to beat opportunity think and and about When your of versus down me of you good of I planes pandemic afternoon debt lot when Frontiers climate in ask the have guys Linenberg of much about the of question. about U.S. you. next you the your wiggle thinking fuel taking airline? out many or little Jensen questions you aggressively But you very Mr. Most you peers. my also during paying my I sustainable have taking high you your with stations. competitors level think Thank answered are guys operator step the room push on crew and just terms the other the see think terms incremental on your as had love and What being of most a people otters the debt. in a

Barry Biffle

maybe follow going there, A up. on we'll lot

I a debt question think you there. got

XXX sustainable know start youngest in Look, miles I we we're the interested Americas and highest and got aviation a aircraft, talk position XXXX. generation it. family people green. fuels even our excited fleet got of me a about airline, about XXXX. if are per talk per with America by seat We've greatest good the we've concentration new And lot really gallon you're got of Let lead. to a there's of proud really really and But and intrigued about we lot AXXXneo

If about you get to great XX% really excited reduction COX, XX% a in news. then

Frontier fly can today. You

to years around don't of to the You this across XX from lot get to it industry globe. washing this wait green have a people XX

And time, ability reduce, of sustainable fuel the an recycle. save is gives unique Remember, where kind we money we compromise. and so, position the at to is we're in that it's reduce. ESG excuse you save planet consumers not reuse offer And the to aviation without and which the today are same

were I what the talking you sure understood not versus debt, the at phone. I'm everybody staring Now is jimmy debt But about as far intrigued the as else. and

Jimmy Dempsey

And you're I then adding keeping a dollar we very fact years when a and business. their I've over about debt we're to industry or they substantial that of approximately next added proud the $XX per IPO without in the the we debt about service of have so. talked since. and out this passenger And the the that the whereas passenger Look, Yes, you rest five through Stephen. about COVID hope well. managed to debt it of talked we've amortize

Our one learned that loan and we a the a our puts inherent in clear have very, in the assets. value good strong in and in objective position And that the at from the out actually brand industry. position across things down. a And us the moment government airline. is unique perspective the puts process to us through then, of pay we've And the it loyalty is balance really program sheet that's that the that COVID in really, very

to tap the balance COVID from not and your emerge you pandemic. that bolster sheet and liquidity having through operate As

us get flow you grow get through business. cash to really is XXXX. And position as anticipation to a flow, back progress our to this generation you cash puts strong strong recovery, so, that sustained And in

Stephen Trent

Really helpful. It's color Thank guys. the appreciate you. super

Barry Biffle

Sure.

Operator

We next Bank have America. question from of Didora your Andrew with

Your line open. is

Andrew Didora

everyone. good Hey, afternoon

international sense. restrictions from guess destination Just your of for two have first, I of to of do me. quick Barry, these international just passengers easing I'm you sense trying what a What pre-pandemic? an connected you? mean you ones a get from percentage the onto could

Barry Biffle

internet So metal, us? international other I'm sorry from -- on or international airline another

Andrew Didora

From another airline.

Daniel Shurz

to tiny number is Its any a tiny customers. us very of balance a way. but It's Daniel. This meaningful marginally it's it helpful, it's helpful? is in marginally On not

Andrew Didora

Got sense. it. Makes

Barry Biffle

add follow The long would it international. all away. I I every getting all average be is the across leisure these we people restrictions just international stay of just confused are especially on good rid travelers But consumer, mean, whether day. sophisticated it ,when body, near less for wide haul international, they board

restrictions So is all good for air removed all getting types travel. of these

Andrew Didora

the earlier passenger backed from about mean talking clarification you. per or hear company just by Barry, revenues you I unit around spring revenues spring. the were or metric? commentary levels Thanks. by revenue XXXX you Nice. total back your to getting Did revenue

Daniel Shurz

RASM, I'm unit done revenue by run.

Andrew Didora

you. Thank Okay.

Operator

from Chris Susquehanna. We have your with Stathoulopoulos next question

open. lines Your

Chris Stathoulopoulos

my taking question. for Thanks evening. Good

both two So RASM. around questions

capacity The and of demand data therapeutics the prepared like to the that first, the trajectory capacity the this on you expect assuming the that business. what at continues. capacity the at the point spring with respect U.S. based to into this Because you're domestic around that meaningful sounds for so Curious, from a it half? by you going in it data with new offset Curious, of comment your natural sort to confidence respect industry? to remarks COVID certainly capacity bucket first assuming their current be U.S. vaccination are likely markets. profitable like will next enough be And gives be haul domestic the what optimistic strong long step what back will sounds with fares to up you

Barry Biffle

we've XXXX on that off. we're fares if ancillary couple What adding volume. we're last and last that acceleration up -- think what if we've two And last then and months. build seen seen the week, we combined. to I And further that -- the touching overall now weeks basing over the in

revenue total XXXX is touch passenger starting per So levels. to

you So it. becomes holds fuel up, cover the effectively. can think Then if that difference I

drop rolled to and And And getting from we olds to five several year again the shoes pill so, get mentioned perspective just and look vaccinated we vaccinated. on when you've throw more positive now is The XX boosters out. spring think now as that between starting are I January. there's there. additive now that office But break. a therapeutic not to then off you fully to the got just the They're in they're over being return

leaving You've back got going natural international the wide their markets. bodies to

capacity these And constructive be should so, domestic all of for and balance. demand

Chris Stathoulopoulos

question a And second then Okay. the RASM also question.

and XXXX? to But you. as Your network we positive higher of these that there airports. negative help Thank in RASM. guessing I'm about network we RASM And terms point-to-point that I'm Obviously, being going should per cost decision temporarily system some to or carrier. should at of with a guess any walk no, because into think from CASM. respect a to you're But more least think of trip away about a is impact a

Daniel Shurz

is this a on So, We margin basis. Daniel. this think about

airports we're making averages, cost these our a even RASM we penalty system the above the pulling -- flight airports. decisions. margin these significant is That's move So costs lower the a And process, there's the believe benefit are opportunity. to we're in it's that's airport, other accretive out so of if cost far that margin That's to how the our slight there.

Chris Stathoulopoulos

you. Thank Okay.

Operator

back I Mr. like Biffle, further any CEO at closing to I'm Barry the remarks. questions conference this turn for President and showing time. no would to

Barry Biffle

the for joining everyone Thanks today. call

forward look team. questions reach we please any talking have soon. with further Susan and to you you the again And out If to

Operator

you conference concludes gentlemen, today's call. and Ladies Thank participation. for this your

now may disconnect. You

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