Frontier (ULCC) 8 Aug 242024 Q2 Earnings call transcript

Company Profile

Participants

David Erdman	executive
Barry Biffle	executive
James Dempsey	executive
Robert "Bobby" Schroeter	executive
Mark Mitchell	executive
John Dorsett	analyst
Michael Linenberg	analyst
Scott Group	analyst
Savanthi Syth	analyst
Duane Pfennigwerth	analyst
Stephen Trent	analyst
Conor Cunningham	analyst
Thomas Fitzgerald	analyst
Andrew Didora	analyst

Call transcript

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Operator

Good day. Thank you for standing by. Welcome to the Frontier Group Holdings, Inc.

Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, David Erdman, Senior Director of Investor Relations. ahead. go Please

David Erdman

morning, XXXX Good welcome our to Thank call. everyone, quarter earnings second you. and

On me Mitchell, call Officer; and the with Schroeter, Jimmy Chief Barry Bobby Dempsey, Executive Biffle, President; Commercial Mark Chief Chief Officer; this Financial Officer. morning are

like I'd customary the recite safe to provisions. yielding, Before harbor

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

outlined could with Additional announcement in Exchange information are factors, such with the file which released we cause Commission. concerning the along earlier, we differences, risk and reports Securities

We measure will non-GAAP in which announcement. measures, GAAP of to appendix are earnings the reconciled also discuss the comparable the nearest financial

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

Barry Biffle

morning, United advantage. everyone. across and quarter good navigated the revenue oversupply industry unique States, cost our in with effectively and and part our the due Despite improving diversification, David, to network we Thanks, combined

resilient, consumer compelled remained While low-cost of patterns concentrate we clear our the revenue with days. the demand XXXX improvement to in unique beyond. flying maturity and new have margin we be initiatives and us travel on will believe advantage, Coupled winner the and peak has post-pandemic cost travel drive our

simplification, in we responded program I'm will our we growth adjusting days to Our headwinds, million generated mitigate network last more post-summer tied confident cost and in quickly the on by of improvement savings we ultimately, than there's drive to annual by excess believe capacity industry which come. To advantage and peak is focus business. our RASM year, margin bolstered week, capacity the the to $XXX late more launched which has run rate

with of moderating the which approximately our defers aircraft we planned to products through to we're schedule accommodate optimize of growth to XXXX, several from demand. This growth with suite out Moreover, customer XX delivery a also growth. to years. addition, our continue plan fleet we announced morning, XXXX In previously Airbus, better expected over align XX% revised high-teen year our and per reducing the next adjusting for services

we app provides and quarter, early year, launched a will new additional options soon a in the revenue this During and New upfront all higher Frontier, website ultimately benefits. passenger. NDC, and the clear per We'll along launch next improve new customer of pricing The also with drive which experience

delivering determination landscape this call, to of gratitude my the Frontier done customers to of of reliable commercial yielding following turn Team for Before low of remaining extend and for every I and in Jimmy? a over the to on mission a face and challenging our safe want experience for Jimmy their focused member top overview. our for fares priority right. I'll now the resilience call

James Dempsey

seasonal by operating increased X% resulting Thanks, RASM quarter, per Briefly $XXX good XX%, growth recapping on to average of the everyone. and total increased revenue Departures capacity Barry, to revenue Total shorter on stage. a outpaced of and down has XXXX network transitioning $XXX, by The New we enhancements, were trends several largely demand growth, driven passenger distribution versus was including Frontier. quarter, a merchandising seat XX% product which the XXXX implementing impact domestic of in quarter, XX% XX% $X.XXXX. compared in key during period million both morning, the and the which our

new the support our underserved and X X This new maintenance Our to markets. bases network has transition over to out-and-back crew flying. to bases year, have on network strategy we high-fare simplification focus XX% been launched

and addition base the Chicago March, to During and San total optimizing Cleveland the footprint we in XX. quarter, Juan to opened Cincinnati,

the from have our markets have and with these XX adjustments stimulate. results part XXX made markets, historical network, As we the launched the we Consistent averages, of not on of structural we shift encouraging to routes seen in X/X that bases. did new

peak on for is XXXX. by focus our and full expected the to to X% quarter in year of day result X% X% the to a grow flying, third versus X% capacity As

remained of consumer on days beginning days capture on concentrate XX% size less the higher today While of To the seats peak on days flying XX% has the the in post-pandemic days in travel year, demand to compelled week. our Accordingly, patterns relatively travel we adjustments, are capacity trimmed approximately XXXX. scheduled peak on than mid-August RASM. week, resilient to sale September of September of off-peak off-peak through for end compared us to the

domestic to addition other cuts our capacity capacity carriers in own from start the market. adjustments, In balance post-summer the should restore to

fare self-help measures. we've of and the the reached operational augmenting key fact, of targeted on-time we across improvement June, controllable lowest In observed including departures it month, out-and-back helped promotional metrics, in and drive arrivals fares flying, factor. In increases elimination the and an own and past our completion levels

quarter manner. validates from certain in recovery reset in Furthermore, a New key cost performance drive through as swift walk as result helped month's network carriers and Our Frontier. other Schroeter, several enhancements, our distribution to Officer, new significant while simplification. Bobby our working, its realized the merchandising last timely will their Commercial operations disruptions of IT-related we it further savings struggle our a impacted product you Chief including The

Robert "Bobby" Schroeter

drives the best what and experience with value at great sure Jimmy, morning, Airlines. customers good everyone. possible Thanks, our Making us Frontier a is have

Frontier. out seeing now Initially start. The and channels. flyfrontier.com to successful. This our This of trip pricing led options in customers and goal, their over only, of time. now third and very step search, clear this this it bundle straightforward is a of their is parties travel New delivering fair New Frontier to outperforming or, has Frontier to superior it mobile cost success app initiative to to -- us total us our roll it The on out we other launched has a been it with The shortly to the commitment after leading experience, major from the unparalleled marks roll part immediately understand New and easier As launched quarter, value making

a great well. customers of the surpasses a upsell channels, our initially economy in reception aircraft third-party options offers UpFront perform with and far product seating seating Plus launch UpFront a also our travel marketplace our exceeded channels, product the continue premium experience front which the at middle Additionally, successful. in other has focused seat BizFare expectations. BizFare, Plus has products blocked price. our agency that to exceptionally of and positive primarily We customers. online at this our been The bundled leisure are premium far

tools heavily travel with more distribution business companies travel limited in leaning now into are we more which that been more the and BizFare, focused historically. online have are corporate We booking and on management channel

and new merchandise app of early website next effective website are These a forefront, functionality significantly in these benefit ensuring mobile they new interactions a will sales dynamic us. we the with across developments thrilled from app with channels. integrating connectivity. offers, our and also new enhanced of in shopping announce innovation distribution are greater platforms shortly aspect excellence us we to ahead, the products to stages service. Together, NDC, richer, and services capability and offer experience upcoming every Looking enable the new customers' being our user designed year. various final experience in This a the are dedication more ways, market tailored offering to With or Moreover, to at launch new us of value enable bring better-booking looking us best underscore improving The allow more better receive customers choice and -- to will business. more ongoing our digital and to NDC, and advancement processes. quickly the will

yield for travel will experience We my financial provide market position, our enhance of customers, some the to initiatives are a confident I'll overall time our overall now Mark concludes update. loyalty. That so the strengthen that and drive these to remarks,

Mark Mitchell

from aggressive network ex-fuel the due cost organization compared the network executed 'XX was basis, during the result good and the XX% quarter, the management and CASM end expense primarily benefit was in than 'XX inflationary cost quarter. fuel offset higher XX% additional quarter. $X.XX. benefit the 'XX the year-over-year than lower a our the $XXX $X.XXXX the operating were sale-leaseback extensions benefit $XXX or revenue Total impacts below cost transactions lower everyone. in higher to an from second lease resulting of quarter cost prices $XXX by Thanks, Bobby, XX% aircraft to by the low million, per quarter. Adjusted million, Adjusted aircraft $X.XXXX, consumption XX% extensions million, quarter, and across Fuel ASMs, fuel simplification from having mitigate quarter the $XX better-than-expected efforts by we with non-fuel supported The supported the to was expense along simplification. slightly efficiency the to increase 'XX morning, at was gallon expenses of higher average marginally comparable stage-adjusted aircraft than cost year-over-year of due our help performance guidance, to fuel the the higher lease the on cost X million compared increased higher of X% and

aircraft Second X.X%, of the the quarter increase sale-leaseback delivery million six transactions. and adjusted million versus equivalents financed the cash and after as domestic fleet quarter, We reflecting during with an pretax margin the unrestricted quarter. million XXX impact had debt, ended taking We $XXX cash was end AXXXneo industry aircraft quarter of our $XX total of capacity cash highlighted. previously of excess $XXX quarter of with at prior in the of net all

our of aircraft XXXX. the And delivery into deliveries early of take XXXX. expect for we second have to We in arranged XX financing half AXXXneos

extended As XXXX also XXXX delivery updated in the XX and payments to the is our delivery of to predelivery for Barry remaining our through from we profile support for lower as needs financing our with moderate delivery The aircraft aircraft of The which and as defers XXX deliveries compared our They growth. profile XXXX XXXX. years. further XXXX QX. mentioned, coming onward profile recently efforts Airbus, in to reduce deferrals our end

down capacity the last the Our ex-fuel, year key full issued despite morning. is expected be the in we quarter reduction year our versus CASM X% earnings since adjusted Recapping was update guidance published highlights, prior third announcement XXXX X% full stage-adjusted to significant in year to and this guidance May.

Barry a in CrowdStrike the July is I'll pretax Hurricane which margin adjusted for weather-related to range Our is margin in impacts, to year to an includes range positive quarter to from the X.X% X-percentage impact the the X% call pretax closing to Full Debby. Microsoft minus adjusted estimated that, remarks. from be expected and of back of X%, third in X.X%. And loss point with turn expected including outage

Barry Biffle

Thanks, Mark.

the on imbalance expectation cost our we revenue margins, demand effect to with winner our and which and ready relative disappointed our revenue with We're morning. additional call. beyond. Thanks of to self-help come, begin will low-cost to in measures Q&A in be us the again ensures we this the the joining months by portion of the XXXX and tailwinds, clear industry are encouraged we're coupled its capacity While industry and for

Operator

coming Barclays. [Operator Instructions] question Brandon of And our Oglenski first with the from line

John Dorsett

is bookings Dorsett quarter. for you John the you release, RASM that Brandon. the that inflect How is confidence positive? give today This inflect on do that currently RASM many will have fourth supposed In to will into commented you

Barry Biffle

just lot right it think I the is Well, a positive we that what see the and -- actually think really lot continue a year-over-year. and that cuts fare of the happened, is quarter. said have before got that moment now has inflected in the ago a we've expect already to to And happen fourth of we balance is we of I September that

take the the expect September again, we So off inflection just and current based in beyond, to just trends. place RASM

John Dorsett

being a than year, in little And RASM-accretive. you this Okay. mature one to previously talked markets? And in markets How the it to have performing expected the new summer? longer new taking they just is Earlier been follow-up.

James Dempsey

QX, seen the for working you markets. about a this that the it's don't season. in quite in a said of launched what and time And of quarter operating well. across what among we've Yes, those positively any you see John, mature new usually into been we winter we -- maturity ones Look, new And quite quite the doing X/X of X/X launch is we've considerable business consistent routes second route are have on new months in moving we it's the in and a here. the success amount that that positively. markets, summer some Jimmy earlier and rate fall during profile the cut are time, routes, that operating We've we've and and in see new done them and the launches is we've

Operator

Deutsche with question next Our Michael line the from coming Linenberg of Bank.

Michael Linenberg

a I look were to had I side. sort on a lot want that mean, did follow-up. just items, you they? in drove if Which come closer them what actually I of I go to have I to of take Like at a X capacity. you don't cost, $XX items with lot a then line line look or of million-plus. cost know, When better, the like line drivers in that? up And were the X the better

Mark Mitchell

This Yes. Mark. is No worries.

So we million when you where cost guidance savings plan the of had we that we savings we cost the put in stronger-than-expected gotten at forward, that annual that savings. highlighted versus look $XXX the outperformance release forward, rate put over the from run we've so

So contributor. a that was certainly

during we In there addition, component. return was that. benefit the leases, tied some That quarter, another a to extended lease was

the I those, were X So would drivers. say, primary

Barry Biffle

as we're we'll a the the year. balance the that that's to was delivering that. network, but sooner dividends And round the to are out definitely simplify sustainable huge the laid continue on operation. had one little in than bit see what that's But we we simplify seeing going we of year the accelerate planned, big we is out driver the benefits of from the schedule And because it to and last

Michael Linenberg

canceled industry Barry, pretty you that? I in last But versus new a the can ago, the ramping quarter. some back you the definitely better maybe push that, stations. these whole assumed that well as flights. the in opening did year And I just I mean, factor in the the competition was of in on out-and-back I from June up up came on completion of had a quarter, mean

than a do capacity the operations up, your number lot station is You more line expense is growth. see up your

don't... a during it like but sounds the thought just actually you on factor industry -- just happened in maybe end. quarter, struggling the at that the maybe I better it's you basis were come completion I to and did So tail

Barry Biffle

yes. What you --

we just is And hit I us teething we we us. So end of of with of behind have new it hit But opening guess, just with mid that think kind weather. preponderance a But weather U.S. the July at we Colorado, the even I got weather outage. mature, July, if and relatively jumps see was completion look now really Those to in the caused us in indexed, And we've think that, flat fact, you what moved had you our think on-time And challenges had when you those significant are look bad for hit up technology Florida. was some in across really that bases. -- us the are to pack have can I the year-over-year. did bases Texas, in being in the been in even huge I

perspective, that's So from we're a huge on seeing reliability yes, from simplification. customers. we're side, our And think I huge, cost really seeing benefiting a really But it. benefit the

Mark Mitchell

And Yes. one thing other add. to just

but got mean, a so I the consideration stage, you front, stations the you On looking movement, up capacity take lot to at were are more. departures into

And just to otherwise certainly, than so to is capacity by itself. stations expect that you would drive looking going move more at

Barry Biffle

those expect a much weather we And that we schedule about of think only out-and-back, of if especially resilience bounce to some the I again, it a And the to that kind one, look offline, technology more the Michael, or back couple this as event and time. out by and other add, shows and continue business what is but bases actually the with just it not the and of the you talked every over of dividends have we've we make multi-day construct and airline, one reliable. are next caused because thing get you And only done outage, that I'd major the had has months. we'll mature I

Michael Linenberg

canceled was July the Yes. XX everybody lot. I where know before. on night a No, data like in canceling saw that you you the

I you X canceled flights. only think

in see you definitely could that So data. it

Operator

Stanley. question line Shanker next from Ravi the Our with of coming Morgan

Unknown Analyst

the of This to is to changed was is be [ now the market do time with that about has Ravi. Katherine benefits your ask wanted are ] the on bundled what this? you kind for just And that seeing? I just there, maybe rationale the fares, what right what might

Robert "Bobby" Schroeter

Yes.

bring actually bundles decisions -- the to It's is that that and in trying New and Bobby, were make up itself the able The we to of very make this launched successful. them. there of in right big a So Frontier was part forward front with Katherine. been front our and The customers May sure fare

you're And rate look of as higher is at that and a well. Look, gate bringing there see out attachment Through when lot in search. well. helped see something is revenue other channels. to as and were launched the this of this opportunity more persisted. creating we for that of the upfront. So we're the optimization when able value ancillary price some forward and than down be has optimization people a the opportunities customers price -- something path And That to that we a doing further with from has a as merchandising was our perspective future that's we've that price environment, that done total shopping they lot we in a time, profit

losing people able a And we've being quite bit. so we're terms eyeballs see and that, in gained that of to

So see successful. see as We big into forward. is and it's as going very benefit for that future as a the us frankly, been and we months accretive, as we this changing, environment get

Unknown Analyst

one just sneak could in more. I if And

whether there's much curious industry of trough, new like with the if as on stabilized et days capacity kind that you're the of patterns growing are a normal or confident cetera. Just versus and current risk too peak not peak travel

Barry Biffle

our been the with on we been here we And in losing has -- at looked where balance money we've losing Well, where money on recently, average. I midweek oversupply. and case, the think so make money

made We've speak be for overall. oversupply. that that going forward. those reduce industry to sense makes that the rate run us, can't a changes. for will I so And And

capacity come capacity several routes of that to I think the needs the them high-cost I up just I We XX% XXXX. capacity. carriers And least think than the high-cost of overall there's not out. just for and over think are doubled there's probably more carrier more that at hundred routes probably there's capacity midweek, versus has or see that XXX

the a forward. suspect lose lot things losing There's And going doing Best to look that. stop more stop we So to is come to capacity that that money money. I and out. way respond to industry

Operator

from Our Scott with coming next Wolfe question Research. Group

Scott Group

How fourth bit you think sale-leaseback on I some should capacity about implies in to deferring down a a think where now And the maybe guidance world capacity to any year-over-year. about we forward? guys are now So flat aircraft, even quarter in 'XX? think how little gains going color

Barry Biffle

now, of Yes. they future what as last we capacity we the far finalized to lumpy. over for upper-single-digits, Airbus was delays you so if kind it announced What we kind Look, digits, I haven't but sale-leaseback gains, yet, 'XX, far be on effectively. capacity. the expect these what very maybe as years, already operating was mid- the been year to this upper-single-digits 'XX of of in over mean works. made couple kept as as unfortunately, single under, in today And happened But got aircraft. been that we've deferring but a when stream had will, all years, has

next And so that that lower. be to to control and capacity at or this also in smooth out the enabled us case, slightly year's XX%

next have but don't we as have expectations, aircraft we roughly of So amount I from example. year major sale-leaseback see as year mean, as an we it gains. this -- a -- impact same our

Scott Group

more a and talking you're -- get peak about to less want more I off-peak. lot Okay.

to this for Your of to it where like we about need approach? is the much that last our year, was a model how utilization new to was over utilization, much has so and back utilization been headwind get --

Barry Biffle

do line to about can math, an so go aircraft Yes. you And at and rent. But hour. the rent to and but bottom of RASM, somewhere to goes impact is cost, does at that that a rough you it's math, in can several and that the headwind think the In range that, our million in we straight what we're the look $XX than more slight points line. CASM, overcome looking

year-over-year, our which the is implied several reiterate this worth said accretive. this We very look our in we're balance and I'll that while of think where we fares for ago, at points trend So a we to year. what for guide as up margin, we the you kind continue. and And seeing expect September RASM now is see again, of

Scott Group

ask more. one And if I can just

are were Is and premium. sort So know that? reluctant are are time into any to now the you premium you the I to fly that you that any understand that, past ask, of I'm "Hey, others data you says, what if here trying new first Frontier", part like you have with leaning plan the in of that on have flying now that customers in to don't there for but people again, data a

Barry Biffle

I very been think out pretty the Yes, to that mainly it. it's been I But website, enabling it's new is pleased be there. of with BizFare into you're really those very all the and existing of customers our reach on understand success. to are the our channels good been whether us our put Plus what and new, It's and we've Frontier it's to be us, introducing new. BizFare and kind seeing. people a these third-party And through we've brand. the Look, really upsells pleased, it accretive we've although We're products been UpFront whether premium stuff that it launched,

those these in, next and just over now things on of we're XX there'll the be products. XX a getting dialed to maturity all lot So months

find to But we've has travel the making ourselves in will when management it's on So been of out us the those people slow channels. I mature. over book us think time, that a because corporation available companies

Robert "Bobby" Schroeter

pre post. the side. that Yes. have on the versus And I thing just add would on seat we One that,

we rate with transformation the the time take of And preferred. premium Plus yield. has increased the sort of UpFront with and along after So a made period

phase. did rate before. that's you in that at a much that engaging maturity on with people are higher the its products premium it And that tells just So they product seating

on the that even some to the tools be more going we're using. yield with up pricing future that So we merchandising being of to anticipate actually able in

Operator

the James. is question coming Savi Syth of Our with next from line Raymond

Savanthi Syth

to up the If even have extension of you the necessarily non-fuel I your of benefit? capacity up earlier that next lease about from there? step-up not on on just Or question I curious don't Mike's a still was kind stepping XQ, what's just XQ we can follow is cost days, year, then OpEx. on though Is it's growth early should slow but know kind trajectory? I unit And happening you of as how think color function any

Mark Mitchell

the to to as portion to I specific, that adjustment move, mean timing. the lease go the And you in that lease But QX, Yes. a $XXX also the as a bit million. think transition. versus and at of is mean day, you're mean, Savi, QX I look main tied little the so those capacity, through benefit extensions. when going you certainly, right? had through guide some you I is the bit when at that costs, of think QX stickiness little it the drivers maintenance of I end we the in about of there a There's right, are

Savanthi Syth

about, helpful. That's we the color to year? XX%, as but growth kind on think I think, high-teens I term, you again next maybe to, of how now your on longer think, high-single-digits can Any maybe slow even should like

Mark Mitchell

targeting as widened back to And our keep if that we the you so plan, forward, mind Yes. initiatives year has at we savings had we Barry I And have, mentioned, we look QX, the that XX%. The that to the next it where be plan plan remainder mean, look that you and portion I Savi, by cost track. of savings traded rate the component, into we're sustain I at advantage then The annual terms on of utilization able year. benefit. leverage cost advantage. cost a in mean, of so so put utilization the the end on is the RASM that's mean, of and run when to the to put million, $XXX of right, we million being that expect in well, right, as ties other cost that to $XXX as sit for hit

Savanthi Syth

Makes How X-point weather on sense. And the CrowdStrike? can the CrowdStrike and was clarify -- from impact CrowdStrike? I much

Barry Biffle

be for before everything. clear, which cruel actually -- p.m. Microsoft X:XX outage, operations Azure a Microsoft haven't had from we pretty -- before, impacted day unfortunately. CrowdStrike the which got onward. finalized To was But much our we an the So sales by afternoon coincidence, hit outage, I'm sorry, and the

hundred had so just had the CrowdStrike that. so And is we took midnight several when from Denver and We that that from around cancellations recovered place. time, or hit

still and the $XX sorting Microsoft. X which in to CrowdStrike, in which million-plus it's part So we're went goes parts But to degradation. roughly range out points margin

Operator

Our next question Pfennigwerth coming Duane from the Evercore with ISI. line of

Duane Pfennigwerth

Maybe it pick up right there. just to

So going that $XX recover? million, is look that to you're something to

Barry Biffle

yet, look We but of things would we don't discuss every expect those you types will to recover penny.

Duane Pfennigwerth

the thinking fares selling total a about And ancillary? for now bundled on you Is I fares? how your unbundled new level product, we're is same target you And base of versus that the there what how then I selling you're evolution you guess just risk given were the fare changes are making at base price all guess, previously the ancillary? fares

Barry Biffle

environment. We moving so us we're RASM comes and passenger think went revenue margins. that That's to ancillary, more about. looking to we've we several think get gets more removed to we I that the from you of we fare improvements of back low-fare and total much. especially whether the we technology got as fares to be mentioned that target, or We've a is are a of some of the a seen the structurally our of what believe to it double-digit see weeks. seen, too fares this per from we the to over a up. last is Look, We've all promotional fare recently, it And to dial And in. kind give control industry risk, going seen dialing we out X this can with that increase too up merchandise out across I It going But trends tell this marketplace. the fare lot we've kind weeks. us we've that's with in side. accretive a being But we significant make is right? the more that us in comes updates give And the right, move think next seen and back far obviously

of you field. So at you Frontier. our product only compare them. more to a compare look be because difference overall with for And is you think because improves, of the going you get can to bags, you go And Frontier I can value will fact, in example, the you And and a and announced lot to as in compare exciting difference. the make simple kind think quickly the I an versus big I that change it that offer. with you a people Frontier, couple go options playing very that other seating to when as assignment carrier get point. this and Frontier that is think price it see of that kind New this with our The options This just the superior is can on seat the carriers New there's X in we And leveling environment far really

Duane Pfennigwerth

And that at that speak, to in to can tighter? you to just Jimmy, speak decision guess, defer? the market getting stable, the structure lastly, you Is And marketplace thoughts? the getting then did relate the or maybe looser, them? Any market, for way to sale-leasebacks you that all I

Mark Mitchell

Yes.

So Duane, this Mark. is

look when continues for terms, I into the not those the step you into I on mean, have back, and us financing prepared a mentioned 'XX. remarks, of but we to details mean And be as get healthy forward. going we remain to range as to market we So the we're

issues on front. So we see that any don't

Barry Biffle

with an with And with aircraft, got know to this you created story world just continued look year, us Frontier. about pile I to was And costs. and community, leasing us airplane, committing mean and had smooth up I was with you their challenges whole not year they that short there's about people and tell be to Airbus' years -- Duane. and investors and and are we very and companies in kind But what I of spots, what in the to add them, term. they they It have in there kind of their I sort a anything But I lot see this X, them around certain leasing XX personally what lot it's and lease when is lumpy, delay of met say repeated, convergence. gone the have a I've those out. about you a not of financing. to is delays converting would do do of enabled to and they lot too, are didn't this would talking cost just This excited kind of last we to shown if these us. And interest been they're in an actually of

look things if Our bigger. widening. that in got at structural schedule, And you the come to more done we've regard. cost It's is advantage getting we've to

addressed that's more that and that So man Frontier. we all. advantage United oversupply anything, will kind they're they haven't cost will do win low what on one the see we U.S. than see last companies marketplace the And of interested be as low If again But us I'd they the term there's people before cost change is move as we they there forward. say an And why standing being oversupply leasing in at in understand the And seen was betting us matter. because and that that, There's will in is. know long cost real. what States.

Operator

Our with next the of Stephen question Trent coming from Citi. line

Stephen Trent

said I was route intrigued you about by new what launches.

you some but tolerance And up pull that then decide how what competitors? them? from see perform these bases, performing of differ said from you before to back you start view have of possibly what sort think routes for you you on new high-level time might when routes to they from pulling XXX I XX don't crew any end the them your

James Dempsey

seen We've flights, on Yes. launches. peak Stephen, the that the of Obviously, we the X/X of seasonal the And off-peak look, did routes, we that the into you seasonal seen can launch see promptly, time there's particularly move part last of we of year into We've you I think see periods into the months. routes, the address was that like not out new period route and launch coming couple you beyond bookings see and after. into we perform. with X them actual them periods. performance then of as it some of in XXX what do over pretty the is

may for then fall to mature come continuing performance. and those months. And XX those work routes into keeping, up routes obviously but of months take the to year, being it going will the back about to we next system-level and to back of those those winter see we Some removed we're mature. and that ones see performing And we X/X

ensuring in months. And XX system-level next those over get investing the the so and we're that performance routes they

Stephen Trent

some about Appreciate follow-up, these transparent what noise all and and seeing the What's you there these about I know decree the wanting and fees my industry DoJ you. on out that have on been the and that, are Y of what X, to extent be are concerning? Jimmy. of the more Department disclosures Z have Transportation to guys as latest And there's

Barry Biffle

The everything and to on speak But -- Look, we clearly. see upfront believe can a want they're I very you you're all digging and make with what able going what can't government the New decision with you to Frontier, into. the

We don't upfront. however, that capabilities is with sure partner everything to we third communicated that are that worried, parties make the that are have there

there. for of The think with of So not looking way with. are complying I think with been some they're I the -- this think than not is much But of Frontier. spirit the these that easily there's rules we believe that complied we And what they're we have it, New constructed, more

hope I at DoT I competition. though, want do think what that they look follows on honestly, they've the to said that up

this see use in with to gates continue common country. challenges We

create see not to working to nor safely continue airports way. carriers growth that environments challenges their of allow with relevant they We us and do with to airlines kind conducive fortress grow good are reliably operating a local in to

seeing the are anti-competitive. So we DoT its digging forward commitment place beyond this investigation we with because feel and thorough following to it's getting through practices that taking the into into look a to

Operator

of coming from line question the next Our Conor Cunningham with Melius Research.

Conor Cunningham

factor Just a function understand relative came stimulated a really that I peak would points. on quarter, would But decline a oversupply. is thought I X have down of to second there in have lower load just where bit. today? little quite demand it the off-peak that fares Fares is the is bit.

Barry Biffle

truly I out, last I to that ago called think grief called gotten Tuesday, gotten help there's much we a we $X-plus Wednesday, a all for taxes years to And have tells to we and But found Yes. the mean, -- just and not we're a pull, have was, not that Look, demand. it. on change was this And of the I return we've demand there there is. where $X.XX years lot mitigate I there you we point fares which and out. we fees got to of and hope mean, I that going office think consistently this this. X.X lot into that it that Day Labor some now pattern travel was think, this several sold

work on flexible that become And just so work the us. just clear to on us demand. And stream dates is the they're on to with a an it that it or common and of Tuesday, not environment pushing stop the of is to there's from travel in where kind and caused patterns with we're a because clear office not have the it's the us going Wednesday, a week, X has couple home this most days

traffic your at you airport, that in still travel airport. the I your to mean, can You you'll TSA for and go can XX%. to the can go you the a -- go -- not fact function of And look see and there's is XX% down also patterns the numbers, leisure look this just is the if people, favorite stroll business at just the it. through but

be change. to And semi-permanent a so we see this

to organizing pilots. We many too have we around recognize our business we're so going And it. stop

think the even that attendants have too reset in reality the they hard third if But can it for is don't to -- have and is problem many near-free. kind it's those of and the place. new if costs norm. we the bit term, them this fare is of They off, near those their fourth a kind everything of until and we're we into days little the the We travel flight in until is carrying takes quarter grow this

Conor Cunningham

not in out One, you to was And lot since XX% laid in continuing to how to pretax to, the I'm you cost out about expect then. plan February, get Obviously, then thinking you XXXX. that product that changed that you're think has I fact you're in too XX% target ago. margins all target are a just making changes a it given the long on the curious savings? just laid that

Barry Biffle

that anything, we're target. confidence in think I if more getting

demand. that going people I bit X- industry And is responding to This think stop start X-quarter or get is universally, the with to not different. the But most they pretty their history oversupply. thing. that is is I this it's this to much the once until you I've right capacity moved the margins. a little target shows seen they're imbalance a thing encouraging And because think cutting, that to of

of a to there, we think there's out with carriers be -- lot see and So we a going lot see we still more of capacity coming. several a lot excess that

has become us it's quarter this may it back than said mean than And but take target we had, better I a clear we times, sustainable. we into at time, see it about further no, the or we February it's this it's we yes, continuing become we've the feel X we but -- clear And So in ever. and our cost cost to now get when expand. too. debunked real, several that is convergence XXXX, thing advantage look that durable,

winter. think fall through there the cuts capacity why the that will we get with all more and that's so industry we expect the that we than And over

Operator

of Tom question from next TD with line Our Cowen. Fitzgerald coming the

Thomas Fitzgerald

length, of on less like your the but stage seems the wrong that it there it the Just cabin, I'm stage down, is going way? really could the could to about of be? just opportunity view thinking length the the curious premium be appetite up kind large with the shorter how pay

Barry Biffle

role thanks -- there. on congratulations new first, Well, the

hours, hour seat. better So doesn't good hours, to some like Yes. aisle window that. slightly change some X Whether hour you. on or people near you're have so like plane people an of you're the day, a X because plane the the the bathroom. an Look, and to want or end sitting for for at people a be want in they whether It an that

them it propensity to a it it. more, they doesn't for mean So while value don't value there's

on but have been And the oversupply, to of we're acute on that But what could with mean, we're seeing just ever know we yes, I seeing have I the been it we're again, because in longer know the so stage not what good more going it's from longer may don't our actually that rate. rates seen we've stage hauls. take perspective, some ever good take it.

Thomas Fitzgerald

to it's any the more? the seems the And like either but scenario further starts it some less do have sometimes just best or guess macro because issues, deferring whether or if other flexibility planes solution you play I out, is downside Airbus then with orders cancel

Barry Biffle

Yes. I days. can we Look, where we're believe peak we that at, be mean on profitable the

week a issue issue. and not count of more a shell probably a it's day season more So It's issue.

in everyone, Costco, lowest in any and carriers is of that in we've count, and business. we're then Walmart, advantage in think recessionary a win need the need mean. for see demonstrated We is to And the our remind might we also that widening. can a would shell don't recessions. have. adjust that, And cost going flexibility environment, we cost we already the think that we're revert kind low-cost capacity. back scenario, I I But I the that from So that that provider, that to And

Operator

coming the America. question with next Our from Didora Andrew line of Bank of

Andrew Didora

next and load Barry, the growth cut the And there? right you've why years? at tapped next pushing on guess, Why of maybe deliveries you few all not over point, the the the demand few level? out do years like I feel is in capacity factor keep XX% kind

Barry Biffle

issue is it off-peak the that days. primarily the Well, was

overall an situation, not it's more off-peak. it's So

We of in we the also kind the also had routes. in hit stuff. were of We middle so -- were the -- We quarter. new a of still oversupply fourth launching lot the

new So many a oversupplied of you routes. routes, also of of we the and still kind lot had had

is revenue the you continue By fourth -- XX% up the we're overall year-over-year to pool, the the the quarter, look to grow demand our time get all we we're total as XX%. pool when O&Ds up we So is in. at

already a we and the being there recover, going forward. load challenge. a it we're up recover, fare from on ago. see moving while fares mentioned So just seeing don't up, and The September I We're we see that the seeing is as factors

Andrew Didora

of Should down? the in the $XX just when perspective, $XX continue about changed there? next And that length then or length an are the year, you so model year one, terms book we in maybe, XX coming X we stage to gain quick guide that recent questions. change, what adjusted And say, just can come think from rate using -- are you in of, get -- will we planes stage order in from to million CASM the Mark, factoring this modeling adjusted anything then plane, a sale-leaseback you actual CASM number million just to per gave?

Mark Mitchell

Yes.

things. X So

be then from to versus about roughly XXXs. aircraft to would So deliveries year, stage when that have all going we look you nuance year, this do next of XX perspective, year, only year the stage next at were this $XXX next to year is the XXX a And look those we're the target. X/X when roughly million they you be

Andrew Didora

So rate per a lower plane?

Mark Mitchell

Yes.

So lower at XXX. a the yes, the a XXX is coming bit in rate of than

nuance. mixed factor So that thing that, you to I Outside of have just think only the that's in.

Operator

with line JPMorgan the from of Securities. coming next question Our Baker Jamie

Unknown Analyst

have [ This James the is of Most on for asked. been questions Jamie. ]

down? Is pressures of you system there you about geographic talked pulling Is or any America that, thinking Latin way versus in the out of about markets driver off-peak. of that can or you're been the the in out that's There's of types there other there are quarters. second capacity the taken the half peak that prior from? that been break markets Just year,

Barry Biffle

only averages. it I network, New did When the hit universally market we did at of just the think think we're -- of I drag stimulate. things in Look, not completely understand actually there, We think New it don't really we but I the down. look disappointed the rest but that was Orleans. And kind or -- Orleans city what happened

Unknown Analyst

rules new for that just or X-hour the you rebooking? mandate refund seeking a seeing high-level that? you thoughts. are Is delay, that around they compensation, And plus that Are do domestic passengers that a stick take for think then a

Barry Biffle

there's the on delay, reality that change we we a We even I'm a generally is looking same they're that. noticed measurable. disappointing. is no has that anything -- troublesome. -- But more haven't It's big delay because haven't I room, seen that. mean measurable X-hour and delay, everyone weather-related. not else the it's around mean, I uncomfortable so when in the oftentimes, have

Unknown Analyst

I questions. appreciate the

Operator

any turn that, over to call with closing. Biffle back And Barry will I for the

Barry Biffle

And it to good thank like for bottom disappointed to everybody is today. green in. looks us news environment. shoots with seeing joining we're Again, is But in the that. the want wanted I reiterate the I we're

I to the coming the of as about excited cost capacity side. the that all see the as into and the rationalization self-help going think we through months side further tailwinds the you're on got we've taken winter. move kind well we're really revenue and of And we've as that

to the look success joining. updating we So quarter forward on to talking with and that. Thanks you for you next

Operator

Thank conference participation. your that and Ladies does for the conclude you today. gentlemen, for

You may disconnect. now

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