Frontier (ULCC) 2 May 242024 Q1 Earnings call transcript

Company Profile

Participants

David Erdman	executive
Barry Biffle	executive
James Dempsey	executive
Brandon Oglenski	analyst
Savanthi Syth	analyst
Helane Becker	analyst
Jamie Baker	analyst
Conor Cunningham	analyst
Stephen Trent	analyst
Christopher Stathoulopoulos	analyst

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Frontier Group Holdings, Inc., Q1 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions.) Please be advised that today's conference is being recorded. to David conference Investor Erdman, like first to Relations. now today, speaker Senior would hand over the your I Director of David, floor. the you have

David Erdman

Thank our everyone, call. morning. you, XXXX Quarter earnings to and good First Welcome,

harbor the Schroeder.Before Executive Jimmy Officer yielding, the Chief and I'll On Barry new Chief Chief safe Mark Officer, with recite morning Dempsey, me is provisions. call Commercial Biffle, Mitchell, our President, Financial this Officer, customary Bobby

risks and statements, these During to this which be materially differ forward-looking we forward-looking in Actual call, are uncertainties. from will making predicted may results subject those statements.

financial risk this could Securities which the the with morning's the to Additional of factors information GAAP are outlined earlier, we are reports such and in Exchange concerning in reconciled we along measures, released the comparable which appendix non-GAAP nearest earnings cause Commission.We with differences measure will file announcement. announcement discuss also

So, I'll Barry? to remarks. floor to prepared his Barry begin give the

Barry Biffle

Thanks, everyone. David, and good morning,

introduce addition X% to stage our June.The is and, network will track adjusted reduction this miles. by target target corresponding our to quarter widen we last Puerto efficiency. our relative the to we've to was like experience of month, on as industry pretax divergent in to a encounter the ability base trailing I'd and greater by San and flying the performance. Clerc, achieve for launch to X,XXX our his Cost the have objective and opened Senior capacity as guide we've the Information Vice on rate crew We Cleveland indeed First, the the our adjusted within years to Alex Denver ever his Bobby relocating quarter our of and out-and-back assumes Team Chicago our month end, we our We're than in out-and-back and XX% advantage highlighted.While with West. X.X%, has U.S. continuing from in industry and Frontier. XX% Redeployment strongest June to inflation, Khanna, these to He's flying have the industry. nearly leadership process and Commercial adjusted fuel, responsibility Customers Frontier capacity on combined of in despite reaffirming point America reported first loss and team Juan, hammer him of welcome we're industry advantage achieve between is family our CASM to the Cincinnati in revenue extensive costs the June $XXX of the real. the cost cost of Dempsey. significantly We're role to Airways oversupplied while of recent Rico continue year XX we're we later the quarter. Chief guide our our better With of further with drives our Schroeder now to that, additions key to we margin insulated our new new our planned. our basis. maintain cost Rajat Chief Spirit, our excess cost The that Officer. expectations by reporting in far markets crew at and on ex finally, exceeded widened markets, this and in of in end, previously track supports teams X% million not year-end. team To To to him X-percentage savings on to and to commercial an pretax XX-month base of and run XXth of Jimmy adjusted fortunate Along Bobby on progressing as with annual Officer, some prior margin loss had.Turning President senior of from

support Our other our Juan with Caribbean significantly second to U.S. quarter, a destinations.In the flying portion would will the in from higher markets; compete to year. a base cost significant as Mainland only demand normal also will growth double will of new gateway we more serve not expect be in our San than carriers, it

X% update.Despite our we quarter. reaffirming as full February despite new the As various improvement the a margin and year X% pretax have adjusted initiatives, launching commercial to immaturity markets to markets, a early system year. higher in diversify in products, distribution all when of of per X% premium mature we as prices, of We're which year, go guide we than gallon part which meaningful as and $X.XX more revenue products these also our our Further, generate the of revenue detail on X% these second new merchandising expect over of for into our they Jimmy including we are expect next the range enhancements in RASM. well to sources. guide fuel will were the gave loyalty

discipline our As network pretax revenue XX% cost and we their we maturity XXXX, to confident margin Jimmy to remaining now of experience and to to overall are reliable deserve top They a for recognition commercial highlighted Jimmy? for I discipline diversity over significant customers. the the I'd of focused initiatives.Finally, effort delivering and--remaining due for Frontier. every priority turn move to our today. staying a XX% and safe on to thank Team in like overview. adjusted to call our member milestones expected tailwinds, the cost our achieve cost And I'll

James Dempsey

a to welcome recapping revenue echo resulting quarter. the in X% XXXX to Briefly revenue operating growth down average X% the to increased passenger a quarter.During compared transition Barry's quarter, on XXXX was increased XX% to stage quarter, I $X.XX. per team. of all RASM compared total Total everyone. the shorter Departures achieved rate XX% length capacity $XXX and and and and million our X% on January reduce network through of $XXX, X%, XX% by Bobby operating both This planned. Barry, Thanks, improve in morning, this developed progression Cleveland. comments flying over to we XX% and to good the April. to our want in mid-March the driver a the out-and-back by key April of our By out-and-back which March, is our destinations Cleveland were in at by a ability launched arrivals from of five crew on-time XX milestone base, summer key total opening was and we'll was year-over-year.A successfully points; cancellation serve

significant Puerto by opening our our Our San the June, our of Cincinnati XX% is crew quarter.One XX and by we is the in opportunity crew Juan, planned base out-and-back in in June, to bases of planned advantage flying bringing base schedule San to the supported competition. see mainland May Rico where to footprint the massive most long-term and by the flights investments Chicago United of second versus given cost for end States, the Juan the a achieve

several for revenues, a offer our NDC, aisle upgraded new travel very passenger seat of that airline. and concludes new factors year, factor, Saint load Croix, our within by product. for class business In to region.Overall, will maximizing and which seating for Puerto space intra-European remain region, now Santiago, UpFront merchandising, years.That only and premium with loyalty We on are and option I'll over destinations introduction of per their our have and revenue our the season, Saint customers.Later program we improve on next choice Santo Mark day Puerto recently overall to my Martin, next our to years.Following through fly combined States this well seating trade recent further to late seen launched as any our our and serve this believe our or want yield diversify value. legroom Rico will two Frontier that in Plus enjoy Domingo our And dramatic resulted Miles in Customers that our highest low the a provides a in Cana logical early a we our the region. and journey the of in expand provide the will load passenger enhancements. providing we and several investment other by to aircraft. on new and distribution update. with exceptional quarter these per Barbados an to experience but the first a with as broader total increased personal move addition, opportunity United cardholder value initiatives and our load so the similar as the San finance Juan app comfort loyalty last year product. the revenue we Dominican exceeding gateway will extra to customers. believe we have Thomas, increase coming Saint revenue premium merchandising over extra from empty rows the the summer, comfort more we San not close Trinidad geography window introduce BizFare, the We this Republic revenue possible.Today, reimagined additional our Punta options thank the a is where will focused with improved traffic of very changes in customers and there post-travel a spend revenue make our the at It's demand to will gap believe the because of main yield Plus middle mobile than include guaranteed years. and believe but elected in several per the The a officials dollars We for will Rico evidenced total record a space the in offering, ability launched expectations. of Juan first we to over remarks, as UpFront factors in UpFront and It's the of website effect to We flows Caribbean product we fare Plus stimulation government helping

James Dempsey

was mitigate fuel cost an sale-leaseback $X.XX. decline to to and nonfuel lower X% compared down annual an than Thanks, greater revenue quarter. at $XXX $XXX the quarter, Total on was helped the The cost savings rate result expense track of XXXX to of XXX impacts.As higher expenses offset per year-over-year end $XXX Barry to industry-leading of fuel to XX% widened by run target XXXX advantage operating was in from inflationary X% relative consumption [$X.XXX] better-than-expected we our X% million, to across the by industry to gallon due million were additional per quarter Jimmy, growth year-over-year the XX% us and basis that the XX%, ASMs of aggressive ex achieve fuel during partly everyone. management enabling morning, comparable or per the quarter.Adjusted capacity and three quarter efficiency, Fuel $XXX cost than along year. gallon, the XXXX average prices mentioned, million, expense higher X,XXX the lower due organization performance. fuel On cost the the the to a our remain our achieve CASM million cost miles, adjusted ASM in was with transactions X% good stage-adjusted

higher quarter end aircraft cash delivery had our six fleet slightly anticipated and revenue first of end, cost quarter. $XXX was during unrestricted Our loss quarter primarily performance our of quarter of year-end. after net $XXX at We ended than at quarter X.X% cash better aircraft cash the AXXXneo million at net and lower due XXX with position of pretax the total in debt equivalents cash margin We to taking and of million than expected. than

quarter be in sale-leaseback all financed second We six the aircraft is second to XXXX, take XXXX quarter AXXXneo approximate are the of in XX over on XXX to expected which of expect to through to transactions.Turning to miles. and expected delivery the XX% of another guidance. stage quarter is half anticipated growth range to in the of Capacity which XX% second length, AXXXneos be

X%, on remain nonfuel based Adjusted expect per million, between an on $XXX to million operating expenses including ex to second to higher expected the miles.Adjusted curve quarter range blended expected transition. be margin be X% May in our We are X,XXX adjusted fuel fuel the at driving $XXX the pretax network is our expected impact fuel to to on of $X.XX basis stage-adjusted prices $X.XX sequential and decrease to to fuel of a CASM elevated the X. in gallon in

our full X% As pretax Barry of fuel range prices. margin expectation X% higher the despite of are also reaffirming adjusted mentioned, XXXX year to we

the also for are guidance basis by prior on Barry remarks. miles to CASM fuel versus lower to turn for XXXX closing stage-adjusted a reaffirming that, X% Additionally, I'll X,XXX back be call the to during X% to ex we year.With our

Barry Biffle

low of to The I'm and again dedication and costs Team the the portion and us take the showing have proud they Q&A for in Thanks, morning. of progress this Mark. continue Frontier we're joining are the We're significant always making ready of will that matter. cost revenue hard work performance. call. Thanks to mattered,

Operator

we compile Thank you. Instructions.) Please time, a this the by (Operator conduct roster. At Q&A question-and-answer stand session. will while I

Our Oglenski Barclays. first Brandon comes from with question

Brandon Oglenski

Jimmy, or to margin results of the can forward Barry and made quarter of top the the a the seeing talk the guide of network some in you've lot given bookings, especially you guys on in capacity in that that changes second improvement growth. you're here,

Barry Biffle

I'll Yes, and go sure. it. take

in last I really think running in new routes of you, and if terms made the are We've look to the we've we started factors. that roll just weeks that XXs a in we're they at in changes kind I'll continue tell far, you load just of just summer. so April few lot additions through of got But the the excited. started really

think I has planning these. team network of well that picked our many So, on

excited it's this it's I very a double as how with right? up, shaping amount that mean we're but the I new we So, flying about to we while get on with RASM really normally this We have investment, over ago, -- said early, of network thing optimized. estimate because do repositioning, would significant. the a it's the XX-point it's right to to X drag but of

Brandon Oglenski

Barry, And much ahead, quarter especially every going XXXX? do from you profitable expect ahead a to guess, reiterating going higher with for here, target margin be I

Barry Biffle

Yes.

Brandon Oglenski

get going more $XXX then out-and-back you impact line give some cost Okay. in to cost Appreciate idea where that. of as And the you the million that's reduction, flying network? us of on can the to

James Dempsey

Brandon, Mark. this is

you're we the $XXX plan, prepared so to the really see on track, mean, savings going indicated you're So, in where across And on cost going to as are million that, operations. we benefit remarks. see the I

So, operations efficiency you're previously, talked we've station crew you're front. see going going to benefits costs, the lower see you're to travel-related going to see, about on benefits, as

going see improved simplify crew in increase the maintenance with to our some going bases, P&L. also a to which you're utilization then You're from to the a to we rate going have benefit capture the favorability an that provide that's on to see network And is higher across at standpoint maintenance drive initiatives going front. the

Operator

question next Duane Pfennigwerth Our ISI. comes from Evercore with

Unknown Analyst

on Jake Duane. is This for

completion, the guiding. higher there So, capacity the schedule? XQ I schedules, conservatism But would than in are seeing we refining we're there still a of appreciate to just in what you on guidance. the based it you're be expect Is level or around

Barry Biffle

weather Yes. air to look, always I put mean, in that something we there's going be traffic issues. control and

going continue we we to to believe So, is be realistic capacity. put in what

Unknown Analyst

have lower just in would yields impact Like over that XQ? on you that to yield I then And course Okay. the positive then load factor the again you and what evolving expect this would ancillary is year? think you about guess, load dynamic. of having performance? And How be

James Dempsey

lower performance quarter. load second the on answer the Actually, just had impact the positive a first. non-ticket I'll the Actually, factor part in of question actually

March. through output the the from in recovery on focus non-ticket revenue some that's Look, January, business. obviously coming saw You the we total February and

to for saw optimize to some an that in the output. months. load particularly off-peak in trade opportunity we yield; We total the seeking And are factor revenue quarter,

well So, worked it and in our always terms out we'll actually going of exceeded forward, like us optimize for we revenue it. expectations output.But very

pushing be the factors. will periods, situation and in. certainly, depend on And in for it we'll peak So, load high environment that the we're very

Operator

with Stanley. next Our is coming Shanker from Morgan question Ravi

Unknown Analyst

This is Katherine on for Ravi.

UpFront focus. had and seating in remarks, has opening premium recently you option mentioned introduced obviously large As been guys a you your the Plus

gets for it? more domestic think of amongst think guys competitive kind do introducing trending opportunity do what how like? been you Frontier is So, noncorporate the that And peers? And has that premium since you

James Dempsey

helpful weeks customer encouraged Look, customers really, in to just our the recently. UpFront front that's our think at place actually We're expectations. few really exceeding space for been its really It's introduced Plus we now. It's a an We quite by effectively of our more buy performance. opportunity the aircraft. giving base. to It's

so, business in still the think choice costs. to think very That much have options, gave And we we're we delivering these will a plus But option helpful costs today.Clearly, to it. is that complement to to customers. that the our we on and earlier fare the very, unit quite we about excited year nice giving strong unit focused business customers be very we're

Unknown Analyst

quick the just yields in move and follow-up. space domestic the and coming half a you With up, in as as as year into And we first in down maybe XQ what quarter of harder domestic comps are back seeing the the some well? guys

Barry Biffle

going you I capacity think Look, overall see up.

six, this because the the pivoted probably think charge We're in eight, probably system and we bucking away oversupply into leading months is I away. from Frontier Florida. now pivoting the

So, we we're the for really higher see going We markets landscape in that than the into, the we're a good existing for fares in. markets system. the us, up see setting

kind and where really stimulation we but as these And of about can so, see changes a mature more we're the for next good excited our summer, market for industry, I see speak we demand rest that the lot for network of the for things year. we're do what ripe revenue headed. can't the over and opportunities

Operator

comes Our James. from Raymond Syth Savi next with question

Savanthi Syth

in this to leisure given in that kind You why find Caribbean about add kind lot was into Jose markets. ability overcapacity you an curious into place mentioned could of of if of of San those I of and expand kind of that kind of talked with kind to some your short-haul a what capacity? of competitors that market attractive have the some connecting you're seeing talk about you

James Dempsey

opportunity really Savi. Puerto We see a Rico, in attractive

period very been base high market time. stimulate real gives a for us there's fares cost to long a Our that of where opportunity

great of next base investment Puerto the very terms It's So, we opens there. in opportunity month. in early Rico. days The see

mentioned, as the new promising base. network the early but Barry across for results, given -- so our cost our business changes look And

And in opening so, Rico. we're excited about Puerto up quite

Savanthi Syth

just Rico? fairly international So, comments by segment well doing maybe is the the despite Is beyond the international segment then of industry? the Puerto some

Barry Biffle

We've small. just on San now done -- until well done Juan well, our intra relatively up we've because it's really

of that not commentary, I We're I some think know talking look, I about. don't seeing that. mean, they're what

it's in be but to. other necessarily it the we're service starting some region, months where think destinations -- I not could

Savanthi Syth

although might, about RASM it's think going what That's it's that on drag XX-point I Barry, the I and you better. if double -- a just are, they I they're with mentioned having given And because markets that you're are the probably to helpful. X normally I'm the guess new surprised reason that comment, being into these would

I percentage just the So, bit that kind should think on -- color you of is add you more of could little and progress? how what like a that, kind

Barry Biffle

Yes, sure.

So, here's thing. the

cases, higher-yield right? we from love a fast in are opportunities, they year existing many RASM are produce we're because now, mature, to system. these a likely, We chasing markets they to to So, forward are our than higher once going if

starting new, they're of However, some in the two, inaugural when brand I'm another next they're like an week, doing week new. brand literally them or like in still

third And a even so, mature a the market they're produce that revenue or brand likely half to they're new. when will

we're point the will of markets, of it it seven first a natural have you this RASM flows should is drag high we -- fourth this, when markets that And single of amount have the next we towards the natural than margin. company's so, straight there normally we significant move we calculated as a the believe in you through in saying RASM these double quarter, in see that to improvement. digits of But on as brand-new And bigger a have all kind because be the and X, And drag you capacity. a our over new kind when to we that this and the expect is improvement case, would and year, year the into in through mature mature. much quarter get X especially normal.

Savanthi Syth

development percentage And of That's XQ? what's clarify, very clear. markets to on That's in the helpful. Barry, the just

Barry Biffle

believe Well, we new in over it's XX% is markets.

Operator

of Michael Lindberg question Deutsche Our comes Bank. from next

Unknown Analyst

is This for Mike. on [Doherty] actually Shannon

of year? year this delays every just even the aircraft getting back ex So, planning other first the you carrier to you Barry, delivery trends. just take like question, corresponding my may For in by Airbus, Presumably and trying half I'm how be understand many the are to impacted capacity right? growth CASM

Barry Biffle

Yes.

Yes. fast, actual real aircraft delayed original to Mark I'm the the numbers. So, from answer But are let going -- our order?

over known for they the are However, now months. is the And and yes. have known been answer delays six

not seeing the disruption before. So, we we're seeing that were

months a really are So everything yes, that now, now that late, when that they're were have delayed delivered just got to just maybe or yes, We're to at be was now that was moved makes to but delayed I'm it, but delivery sense. from call airplanes year a catching we three was where, ago point a right. four here a be supposed that the now if supposed that ago, problem,

-- So, as We've this the impactful out. smooth really it's business anymore. to not Mark seen And

James Dempsey

Yes. I standpoint, this for expected the a second mean, the XX XXXneo's quarter, Yes, number half all in deliveries year, of year. from the we're back still XX at in

Unknown Analyst

question, second much [mortgage] to And get hours pursuing helpful. your utilization color XX% I like helpful. Are now, because it the the the still you were drove then maybe the but you decline would in with we aircraft point XX utilization? X% to got would here getting to by are sounds flying, had changes, earlier XX-plus out-and-back that thought network ramping. my to Very to Any better already. aircraft have be still what

James Dempsey

six months of last and period. year, that Yes. saw Shannon, the in in we're we managing back the particularly still January oversupply the February

year. to we've took in so, like utilization rest that, periods, we expecting the we're previously XXs in up February And high but of the managing off-peak and for the XXs, January done be in the utilization down

Operator

next our by Stand question. for

with comes Becker Cowen. Our next from Helane TD question

Helane Becker

flight resolved? point Was earn would to that they One, new were objecting schedule questions. one the ever at issue less. attendants Two because your

Barry Biffle

Thanks, Helan. Yes.

to past guarantee did this negotiated that. of trips So, in wanted They had multi-day we and on a actually negotiations, issue. agree minimum a not of very we amount

settled. prefer dispute. and do attendants know of some there diem right, get that prefer the We flight So, per been trips, This are for and stay It's multi-day hotels. it's a that to is in not a challenge really that them.

want grow, look in growth, it, call half, However, if XX% ago, but able when think Like day of trips or we six percentage targeted XX%, to we them. it, have great it's only city. though a have And the multi-day that XX%, example. the we even we've people that what especially will versus, that almost you total grow, you as they when hired last Cleveland, six be at bases, every grows multi-day within from is as we'll everyone number but done months, likely months locally, and look maybe are year in hiring it, every out-and-back, the close about that specifically call at fact the so, the for doing the our you trips, in of be out-and-back to a Cleveland we day, cut into our we and

still be to a that continue expect challenge the small those it. year, it's a get it of a want we minority I know within to should -- as them out-and-back. for grow, able it's So, want But all we that

a So, we don't major see it challenge. as being

Helane Becker

talk just that changes how really That's lot you route the that. operating they're then question Okay. cost And wondering anymore, advantage for to And networks. does relative much Group. the a is, I'm their in thanks your everybody's helpful, other given advantage my matter explaining about guys PR way

Barry Biffle

lot. a matters it think I Well,

carriers of are different Helane network we a carriers this in the are that that have know in somehow bifurcation there's now I shown, place clearly and been trouble. I -- that think thought low-cost

to cost -- at I think eats that been had the you to X%, But eats network year. fact number think that up widen hell-bent we're look X% clear I to with tailwinds and back why and over one, we're think the low-cost one these us X% and confident going XX% the their margins completing guide the to new talked QX continue be is materially, of to outperform. cost to we're going and costs yet XX% Why and the margins. themselves into more the markets a our to target have XX% $XXX call oversupply across things, impact those I the advantage into have now, is us that to starting when despite we but drag a very cost is imbalances well I capacity advantage XX% going and that the for That understood and That a from year. to deployment and we're carriers, Mark that the why margins out-and-back, and of carriers. have and about our it deliver in which think have over, number over next to million plus what's greater low-cost get I X% that

and will, always Helane. costs matter So, they

Helane Becker

it. Okay. Yes, that's really fair. I appreciate

leasebacks one Mark. the the sale How Just model do the rest quick for one we for of year?

James Dempsey

Yes.

year, six fleet quarter, half back the So, the of outlined, so XX we've mean, in from financed, leaseback an expected XX second year. profile the overall this sale follow deliveries perspective, all I I just think you that the if in

I way that's think the to look it. So, at

Helane Becker

right. All Okay.

XX So, X-ish? that divide by

James Dempsey

it's not but guided haven't specifically, we a think mean I bad I approximation. Yes. mean I

Operator

comes JPMorgan. Jamie next question Baker Our of from

Jamie Baker

had million first $XX kind that of we're quarter that it to CASM mean, of the that. to like accustomed you increasingly business all used like feels So, It the to. you as in and the sale-leaseback model is aircraft offset becoming proceeds stuff RASM opposed a follow-up I financing looks on decisions dependent CASM. on

So, fade, you any to when I proceeds guess the given you sale-leaseback differently? business my thoughts might first have manage on how question begin is,

Barry Biffle

dead. this is a I months bottom the think, been horse We This Jamie. covered beaten But line this. pretty ago. few significantly, Thanks, has

through a going And If you through is buy or that aircraft this to it rates, and and economics same. get whether you're able you whether market do the gain. to do we likely sale deliver finance, the leaseback have income net them debt below you're at you the illustrated a

of is because happening And few out ago. Southwest years they when to you're a So, those the United, the and -- not actually point same if that American and But your of changed gains you rules near would you the that anytime back to simply that's we're if gain calling term. away, in well, out. fair, your accounting fade give but being

on aircraft XXX have We order.

being positive clear, and the an needs and negative, a a a have clear to path. We Jamie, stop to as business. asset talked This about talked as about

You need had same next the as to look this on financing the the unless we will a market It's this plan is The at changing come it's financed. decade. changes. flows change, real, This the the we the guaranteed cash and if don't of cash business. core real, from over and are earnings not part that debt

Jamie Baker

be were amortizing Well, I you guess of the over lease. if the that wouldn't gain financed, more though, life debt similar the question the to

So, would whatever amortize over $XX much if because, quarter, Do you wouldn't I obviously put benefit. it's first would going smaller differently, I number? a struck what be approximate the a be been guess to benefit mean, gain leases the it know you in the have you million

Barry Biffle

Those then but number, aircraft This smaller over a have brought that in the other why there's this. we been years. aircraft the we you out gains good last and presentation is it, on would be really XX a saying would delivered all from keep much put you've the

Jamie Baker

I remember. no, No,

Barry Biffle

Okay. Well, that's why we did it.

we're do economic debt the over did showed finance done answer back you this old income proper is net accounting, being the look, or whether go same. you If which it it way accounting, the you and we the it's whether now, did whether through the you you it's answer, following

Jamie Baker

appreciate color. the I

James Dempsey

market is aircraft, the the in price of really with that delays really, what for value to market happening terms leasing in XXXneo add particularly have but at the manufacturers isn't The costs aircraft, discount strong. to a just aircraft going with aircraft the community interest to It market very price into with been. is we said. higher selling an market. that of The been the are And diminishing. Barry Jamie, rates, happen ever aircraft financing the buy the is issues for strong. it's associated that very, than higher to up material Sure,

quarter. And in every the asset and a see getting so we're you order, There's our that's aircraft value why intrinsic real that benefit.

Barry Biffle

a and performance And for are with important. mean really leading guide had I what we think year. about that in hit, is gives we QX the back focus get with target changed let's is where we need what Nothing what's that points on to a confidence you the is get to to we for gave RASM on. excited hit we next That's to to to labeled a as back high what guide that. us XX now believe focusing you QX included that even margin and the single-digit our year great we it. I solid we're XX despite which

Jamie Baker

are in strength for we're agreement. Yes. not don't I and And disagree to market, the that reverse soon. as point, looking the time full aircraft any on mean to we that of I

thank So, you.

Operator

question next Cunningham Research. of The from Melius comes Conor

Conor Cunningham

happening year costs, trying the of On you much bases before of kind or, new more next too then open to the guide the is mismatch kind holding for the as just network, that cost cost open move good just currently you the side to is guess, you understand Cleveland, new couple I'm I crew -- bases I'm become and starts it now, on the you've to too XX you're understand you're as that this many up bases. this Like kind in introducing out-and-back have XXXX. up of cost example, where dynamic year? a trying that XX that a crew cost actually to there and you mismatch

Barry Biffle

is cost of that the that mismatch. the shift to simplification Yeah. that I $XXX we savings don't to across I year, think provides by the the get and have, it network that the target That operation. there efficiency is million XX% out-and-back. run expect to mean, underpinned this cost operation, I we rate the a end by over simplifies think

is think goes And hand, that mismatch. we in it a don't there we hand and think so,

James Dempsey

there real the to and cost of small Mark, relatively add putting opening actually what they're they're actual the dollars where involved, but in are the really base, just of money. around places valuable to in context network assets them And the moving making

a so, upfront a base is small investment relatively And from perspective. the in opening cost

cost actually come base. savings a you after So, quite quickly itself. there that from cost the drag material There's event the open isn't opening

Conor Cunningham

Okay.

lot. Okay. moved then the on obviously And just your Perfect. a market's pilots,

negotiation? have anything kind happening negotiate Can to lowering you of public. been terms of now the airlines your -- shedding pilots there? you some new you about for I are are You want obviously, don't that's where just sticking What that in have mean pilots. I talk

could rectified. Just curious around that potentially now kind going our of expectations what's get on and on when right

Barry Biffle

tells right? in get have not the everything the to that dried staffed know. if completely the airlines rates The canary you The landscape you and been completely classes, is to you changed, have hiring have mean airlines regional And actually able mine need again back. while -- canceled I want attrition up. you the There's coal this fact saw shortage. a

the not there there's yes, pressure building. was So that

very is As negotiations, mean just It it far is as we early. I started. -- our

And time things And and of them kind around in of -- frame. two the mediation. we're Most two-year are are of years. so history the one to center these

So, for us of process. that get into anytime I mediation, soon It's be you're to it. process. kind Once sign just locked wouldn't through up able expect a to you

while. to going it's So, a take

Operator

The next with Trent Citi. Stephen comes question from

Stephen Trent

these as Plus, was you it products [ramps]? with on others think as these sort the new response you or this competitive launch what airlines you Two of the you said are network, at called, new new and mentioned quick seeing look one's for at One, you. route UpFront network that you I from you look

Barry Biffle

Yes. Thanks, Stephen.

seeing high high-priced or normally mean we're definition what I look, underserved for So, think one great opportunities person's another see. is revenue I markets incursion. you airline's opportunity of with

on is normal So, is that focused But the I out think reactions margins. industry we truth see there. the

out respond not I normal. the pricing seeing will any anything think But capacity time, generally, I different with so, as rational think think you of that yes, see, And I things most a irrational over carriers we're and result.

Stephen Trent

Barry. that, Appreciate Great.

standpoint. might bags but and the a what's on back latest And on lost some have customers one about extent and myself, that? the airlines what flights delayed you this color seen for sort to compensate And other on of push this haven't thing. the of kind to any that? around the industry Do all I regulatory from I guess even rule having question details DOT made Just changes XXX%

Barry Biffle

know I Look, to technology transparency. Yes. of I there's -- with there's compliant some that's do with lot it pushback to third-party on think about the with a be it available, has the concern especially and

out. side, I what year. don't same for categories. think merchandising these will year, be kind they're and all will compliant we and got out, from upfront. got very would refund see any believe revenue not that, big these $XXX dovetail I a a this from We We've we've some refunded website impact transparency got coming a new We app say clean last this.And transparency, in improved just but over it also the much I'll good address looking that and new on of with perspective, the us largely we really changes only look, issues it We've we've for. coming financial million On in some got think of make

impact we think I see because financial in hit there's But of having again, we the But hopefully, I they're think spirit for. the from for. I way they're challenge some is a industry we get I But looking what think can there. do why is place not no the of technology So, all the reason they've think, written what to the today exactly looking can in, this.

Operator

Group. comes Sequoia question The Christopher with next from next Stathoulopoulos Financial our question. For

Christopher Stathoulopoulos

or want I your back to dynamic. to supply around Barry, prepared comments your go comments

a point of pieces as network. on put here. your If key A finer has you that relates changed could lot it to

network larger know, with seem also and of confidence looking it last, coincidentally You've sales at they of loyalty that. with a here, the to or these rework, peer But you're reinterpret your be not, should about things you're that I like a business, and here clear to relates thinking forward. don't going been very how about promos optimizing weeks kind product, overlapping particularly revenue initiatives, having network as few the

Barry Biffle

divergence that truth different a the I UpFront don't Plus some possibly network But we that cost and travelers think the have frequencies premium is while routes. us business mattered, low little sell cost many flyer eight different afford I always affluent a look, at the we don't we product, enables said more that or appeal to Yes, want different a of a think new and that ago, because the have probably cater in offer they that those to can't they customers a places is carrier. real. frequent that this We're And the end airlines in have day, that a you So, Dubai. day and clientele. we We program with big a a the gets the in comfort And peacefully in to regard. have to product. your coexist to with more products

And figured serve But yes, market. So, we're think carriers the different for that they not that of I chase. actually corporates out. legacy we really the most I sophisticated think have a more

Christopher Stathoulopoulos

the And if dynamic year? consistent think was expect then slowly you could of to the this we comments that Or And as speak factor system-wide? earlier yield to on a is Okay. we question before, and get progressing, your that market-specific? should perhaps I there And of more an balance how shift through dynamic. load it it's sort if that's is

Barry Biffle

had Well, their every right? this is look, do. I They they this less we beat. for in teams greater that was that what focus a mean we've found a we optimize big a day. us. And we better is always QX load and And have good look to that on thing, optimize revenue. revenue outcome on mean, that I seen yield we pretty

worked. And so it obviously,

largely load next to think term the good to to think oversupplied example.And because we capacity would through that too that in the a it's we areas. that I the get However, we're think making out network year, of deficit factor. move kind to had that close to symptom I we not have back seeing that getting I And time by we factors. still long impacted of changes you're Florida was an as as And all QX the year, as will the by of of regain load and gap expect the you so, oversupply much the

Operator

Raymond question with from next Syth Our Savi James. comes

Savanthi Syth

Thanks for the follow-up.

was quite a You kind XQ and point cost commendable your earlier brought expected. that up of good better than performance

drove Just can curious your any And the hasn't full that why performance maybe thoughts changed? like outlook continue. XQ year on what

James Dempsey

the as in that's first we target cost outperformance we savings and the standpoint yes, what from you across continue cost through -- the quarter for, look first to the that target started as versus quarter. saw so early $XXX benefits and a on some in in of quarter to we're towards million and our we plan, I which see work the first Yes. mean, expectations, business, come

As basis, mean, I you still still holding mean, strategy the full that look that we is that put given forward. what on I X% X% year to we holding a that to. to -- we're we're

still guide at this point, that so, holds. And

Operator

questions. for further closing Biffle no I'd showing like I'm back over it Barry remarks. to turn to

Barry Biffle

Hey, well about I we on costs the Team want to look really Talk how we're in everybody you trajectory improving revenue excited thank joining next We're operations. to thank our as for all as on and to I'd our today. call. to like us and forward soon. hosting you Frontier,

Operator

This for your does participation the you today's conference. in conclude program. Thank

may disconnect. You now

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