ULCC - Earnings call transcript Q3 2024 | Frontier Group Holdings, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the 2024 third quarter Frontier Group Holdings earnings call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd like to hand the conference over to your first speaker today, David Erdman, Senior Director, Investor Relations. Please go ahead.

David Erdman

Yes. morning, good and you, everyone. Thank third Welcome earnings XXXX to our call. quarter

Officer; morning call President; Biffle, Financial but Chief before with the prepared the I'll safe deliver are Officer. Each Mark Bobby will Commercial me Chief they Dempsey, On remarks, Jimmy harbor this Barry provisions. brief Schroeter, Officer; Chief Mitchell, recite do, and customary Executive

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

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

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

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

Barry Biffle

and David, morning, Thanks, good everyone.

network domestic excess is of through time domestic COVID RASM excluding progress loyalty our to and in lowest needed carriers headwinds in enhancements. revenue shoots capacity, with its product items just higher now quarter made the and Frontier initiatives trailing fact, capacity as And helped its post overcome platform, years. September New was midway capacity saw X%, rate in first growth we Bobby own. optimize while Domestic the green other the and to these from Helene for program by we're pandemic. excluding approximately slow lower Our and their a we cuts And seeing on continued years, inflected impact. will capacity XX factor, gross moment. a our expand sales

challenging Helene in our X.X% Southeast was States. struck guidance the loss quarter third Our despite the at of Hurricane margin midpoint pre-tax the United as quarter of conclusion a adjusted

the network across hurricane the our and CrowdStrike during improvements strong strategy, our adjusted in years. from metric. operation Difficulty] impact fuel X the which operation CASM lowest quarter. Improvements every helping on [Technical validation a the X% to contributed operational This had delivered of basis a simplification also our ex reduction in we've adjusted year-over-year the nearly drive is in outage, to Excluding stage our Microsoft rate complaint

the maturity supported network in initiatives growth. fourth our headwinds the and to the and Milton, by from the RASM expect Hurricane of moderating We revenue quarter, inflection strengthen capacity including

In Helene. to of of extend demand nearly end significantly over closest with period of the in addition, schedule effects and our X-day forced competitors by all the from to bases. Milton XX% of top expected like including overlap recent scheduled nearly employees our impacted many lingering Frontier who across quarter on endured our of caused I'd our to fourth them. own flights brunt cancellation softness is crew of and areas XXXX the to the the for thoughts travel lower those affected hurricanes,

Frontier safely As overview. safely well, operation. I'll I'm and the team valued commercial grateful member now for these navigating to the recover challenges diligently for call and working the to Jimmy quickly over Jimmy? turn to

James Dempsey

quarter. prior take XX% effect down reductions, $XXX, 'XX by through was growth of quarter, the revenue good X% capacity quarter, on average a capacity recapping versus prior year resulting X%, domestic Barry, million $XXX our oversupplied began in to quarterly increased RASM largely per Thanks, shorter to slowest which total Departures the rate, versus of XX% increased X% the operating stage. Total everyone. post-pandemic and seats driven broad morning, passenger $X.XXXX. midway Briefly to the on revenue industry

attractiveness across our August as a result we As to stage higher grow small September shaping capacity pool adding saw albeit the proving of and constructive XXX enhance X% our progressed a addition and in the adjustment resulting be own by adjusted direct ASM increased XX%. increasing stage as Port production strategy traffic we Barry flows, week XX deployed VFR quarter, to miles by on and revenue will leisure third and flying, into industry. We during length new to demand to through removed to of This in our with whilst stations continue markets. whereby we X year-over-year. We the California XX% is Bridgetown, inflection business mentioned, and which days on capacity new X% deployed by a year-over-year the adjustments to off-peak a launched seats the shorter traffic. Seat successful reducing capacity, RASM adjustments of routes, new Barbados, X.X%, in our Spain, fourth Trinidad capacity of quarter the Jose, opened San in

continue of expand launched from Burlington, the fourth Dulles. Vermont Palm Vail/Eagle, Springs, markets in network Washington the We quarter, addition including our to XX new and

Saturdays markets XXXX is moderate our Wednesdays, the in red-eye with Hurricane the our we back end Helene in QX flows across capacity our and redeployed traffic QX experiencing seen of bounce a that performance, a maturing Tuesdays, of that results our it Milton remain the August on shift September. Off-peak is end bookings have late dented network in at and and performance, now XXXX overcapacity to with in continue from throughout trajectory XXXX on were challenging underperforming we expectation early significant focus flying and and Although XX-base RASM we improving footprint. flying and line a strong early

stage to XXXX in We miles. an on the approximately digits average expect XXX of capacity length be growth mid-single in

for our merchandising to performance of with improve back we Puerto on with maturing to go to diligently experience loyalty enters and hand from Juan, bases customers. I'll and enhancements XXXX, Tampa, of as into Bobby program. our Cincinnati, New San our the these through commercial with out XXXX some Cleveland, a through progress launched simplified together it its premium been second perspective. Throughout and year enhanced travel launch of an our with newly some over in Rico Frontier update customer our product day together the and working our Chicago, Our new to operation QX XXXX operational network we've of

Robert "Bobby" Schroeter

and good morning, Jimmy, Thanks, everyone.

some advancements we've and key significant are experience customer made I'm to showing highlight the recently. excited revenue Our initiatives of and momentum

We improving experience to customer prioritize continue through the technology.

we and their at travel overall bag documents app of verify use easy Frontier end the enhanced significantly customer will travelers the customers To of end, self-service the delivering airport day fast check-in, arriving to the experience. toward mobile the app experience document greatly international XX% travel boarding, this we easily quarter, which This has year, airport. verification our Over which better before new from that now and drop, for provide the mobile introduced allowing in a on will be a today. app, of

and new peak during capacity efficiency periods. our Denver, Additionally, in ground gates on at travel front, the we expanding loading opened home airport base our improving

Frontier bundles have business their significant allowing flyfrontier.com, but continue and This options customers we're customers the this the bundles, a enabled New year. The for new booking, MVC time who also mid-September, of early to the their cost and The ability track app trip. in revenue, to success third well next has of economy, to understand platforms rates the choose check-in. clear before at bundles, total travel not functionality appreciate extend preferred added of existing to to and attracting these and easily simplicity resonated the with only driver at party on us retain launch. to has to bundle This ones. transparency and multistage well attachment premium customers to we mobile to positions on Turning Due bundle success been since growth their increased offering of pricing and

premium generating more load phase, products, XX% BizFare UpFront with to performer the premium XX% is Paid XXX its than over a also is UpFront previous basic revenue basis XX%, quarter utilization passenger Plus stretch and the seating. Similarly, BizFare very and has perform higher ancillary to fares. strong second which have higher Plus, approaching continued the maturity Our the compared a in also for points well. been in factor to per third nearly compared revenue rate still

and fare booking into As like products search tools we we to incremental next this driving Flights expand in revenue. and KAYAK engines further these into corporate expect QX year, continue Google

more our and and competitive financial Our has us free remarks, and we key drive in increasing we will helped that up in is made well. pursuing there The and crew status the X heavily a the my up for results believe check year-over-year XX% appealing, These applications highest revenue particularly to card to markets bases. gold with large for in of be on by update. opportunity elite it more and I'll yielding over X%, for the customers in cobrand for Mark May even third strong introduction as And cobranded have partnership enhancements quarter revenue card concludes turn cardholders future. That for the bags untapped record. credit August instant XX% is spending

Mark Mitchell

the ex this than from program, from transactions $XXX days to The than from $XXX to fuel received the the of off XXXX these everyone. similar from cost $X inception flown the is with the cost and was in Bobby, recapping Briefly fees costs higher $X.XXXX non-GAAP driven $XX X% brought Thanks, consumption and delivered quarter growth million or departures the in an were last offsetting average demand of partially stage litigation fuel fuel a our the trends. revenue costs adjusted in decrease our excluding non-fuel $X.XXXX decision by October. Adjusted incurred in earnings of X% annual for to million, of within in rate. Adjusted lower XX% million savings million September quarter we settlement settlement expense reduce were $XXX quarter, former to prices, related the stage was not aircraft related lower per on good than which run lower related expense the gallon. to operating settlement adjusted an higher has lower align morning, this million, basis, were benefit Approximately since increase legal expenses legal million year peak capacity at to the quarter. Fuel greater in was early higher higher third CASM due cost XX% tied $X.XX additional XXXX higher and by $XXX leaseback rate average was Proceeds fleet on offset were sale quarter, better to than XXXX our the X% and driven by presentation. total quarter. Partially resulting items X a ASMs most against benefit savings thus of aircraft guidance, and reached lessor.

X.X% to adjusted loss million a primarily loss was the pre-tax quarter net pre-tax while $XX $XX nonrecurring margin, income difference while was income just I million. related mentioned. Net Third $XX the legal million $XX was was settlement adjusted million yielding loss

than line to close our to net loss greater our breakeven. We our year-to-date adjusted nondeductible the to impact of equivalents comprised $XXX of liquidity pre-tax tax is adjusted unrestricted as quarter $XXX our quarter-to-date and and loss the cash was end. and resulting that is total under particularly due of revolving largely tax Our in credit rate, of adjusted million loss million million pre-tax quarter availability at with $XXX cash undrawn impact ended items closed new of and the September of

to brand be our assets. secured We're million. expansion subject passu commitments, terms, new to revolving that brand increased our enter also previously our to desired significant the into related additional may by revolver indebtedness disclosed, As loyalty $XXX provide capabilities, secured conditions, indebtedness which to is related It of which able assets, and liquidity lending the additional as facility. and and certain pari extent for to such features may credit by incremental loyalty is

by and a covers XXXX. We the fleet facility in at with X X deliveries capacity transactions. facilities PDP XXX sale revolver, aircraft existing quarter delivery in financing the through our aircraft XXXX PDP new after all updated we aggregate As of establishing which PDP deliveries million part and a AXXXneo additional our a leaseback also during expands September, secured financing our in taking $XXX and end of quarter, financed in scheduled had aircraft certain

engines leaseback AXXXneos sale to financed year of expect We be exit aircraft. transactions spare fourth aircraft of take quarter, which and are the X and in the with planned XXX delivery to all X with

disclosed of towards Our year. fleet half schedule the plan amended last of weighted the for deliveries with the XXXX with XXXX quarter pace consistent delivery remains back in we the

which market leasing the leaseback the with along and first We X approximately aircraft take expect through are X/X quarter. The in is secured half, XXXX all commitments we've leaseback of deliveries year, XX sale AXXXneos are half the with heavily and of of expected X towards strong deliveries. in half, second delivery AXXXneos expected next XXXX AXXXneos and deliveries of aircraft second weighted the fourth financing for XX financed sale to are X today which

resulting lease related an fourth million announcement was and related including be Recapping bear CASM fuel reduction significant are published in X issued guidance to capacity X the guidance months quarter X% $XX for range the year a in to year the we hurricane-related Also margin excess in $X.XX range guide. The costs of curve quarter at as off-peak expected fourth nonfuel basis, Barry down stage Our the as impact modestly year gallon we fuel cost weather, impacts $XX of to $XXX last to despite above. With remarks. highlights, estimated this prior key in return tied morning. percentage approximately of quarter versus to of I'll for end for the just is the included turn week that, ex $X.XX $XXX year that break-even per Adjusted a in an back of in low million million estimate quarter to expected October be expect average wasn't to to the to capacity expected pre-tax XXXX of the which on day XX. operating an million margin fourth X year pre-tax expected point benefit mind, full contemplated earnings from we the the expenses be of aircraft. On fuel to inefficiencies in to initially leases includes extended reductions. adjusted crew break-even call on prior approximately the of temporary prior in related full the closing adjusted price X%, is our based to be

Barry Biffle

improving I'm proud executing operational customer and our and has progress Thanks, cost while initiatives, made experience. performance the also Mark. in revenue Frontier team of our

this our and getting progress in for back to into summer on initiatives RASM a continued further XXXX stage fourth these again combined cost We to which advantage is to adjusted the of support inflection expect margins us basis, double-digit objective and of significant XXXX. Thanks maturation quarter the our drive joining of by with expected morning. the

commenting not to M&A begin we to be will flag I industry. begin any want on the Q&A, our Before that potential in we Q&A. ready we're Operator,

Operator

from comes of Ravi question of Shanker first Our Morgan Instructions] [Operator Stanley. the line

Ravi Shanker

kind given So just the initiatives now of 'XX grow offset ASM like some of can off do digits? guidance be there? on looks given only think like, what a little you revenue maybe you trajectory mid-single do of, that new year, of RASM like, kind there next Like, just to kick think the you for think can for bit the

Barry Biffle

Yes.

revenue loyalty path got, the point maturing this to continued double-digit the we the this. of the margins I Frontier being initiatives, network very as in we've industry products at backdrop it's the got, whether think to and is general, accretive So New the of maturing, look back at plus the driven premium by to the programs the just all we've that maturation

you back have can draw several quarter, you you if margin line made So have a bullish much out I especially this there, see can here we're why points Milton, quarter. think pretty we'd and about getting from wouldn't we in consider really if fourth Hurricane

Ravi Shanker

that just a Just to follow-up point.

margin digit summer getting of double of I guidance to think at your 'XX.

below street that versus it do getting? what the the potential that not number, right? street need we Or I RASM? close is think for the Is are where -- think So what's you converting expectations? the just to gap half

Barry Biffle

growth a Well, just X/X by back that the I all network got our initiatives maturation mean year. now probably we pool did to at we bucket you over think the sub look go looking revenue this the biggest and is grew of you're that and I new year-over-year XX%.

So But flying that very pool. much immature. revenue bigger was yet

got we've worth very year-overXyear Frontier. the things bucks. And as of This traction beginnings street coming of paid what to mean, as the as RASM. Then well. X% X% new your in We're in with of So XX% well UpFront multiplied premium of to success has mature, seeing kind the think to out That's capacity. just Plus the Frontier I get when that's factor that's load a a XX% have is I one maturation the you accretive XX% got, which and merchandising. NDC range in that's you've New the in app in the been real industry seen now to have couple lap New we're across seeing XX% simplest times we're we increase of for products. where we our then real that getting

things for I margins. is So think tank than of the got perspective going lot and to probably a RASM. overall we've now continue we're And anyone people which they're and cutting a get industry more are seeing their before capacity, in they until backdrop of just cutting tailwind you target think what on that's I hit to the

in the years. backdrop probably I XX So to in I that's best that we've X probably had think think

Operator

Our Brandon Barclays. comes of line of next question from the Oglenski

John Dorsett

Dorsett year, little costs? sale able to to line With affect the capacity bit up how Brandon. is talk your just and about a year? then control are come, And with can next for over This digits also on next mid the expected John should rent how rent signal you you this all leasebacks

Barry Biffle

Yes, sure, ahead. go

Mark Mitchell

I year. Yes, specific mean so next to Yes.

with drive annual perspective adjustments the And end run stand from in to program rate are the to better margin of a capacity, that moderated investments capacity we $XXX look savings now to as overall help we achieve year expecting to commercial RASM those our So to have year. benefit are expected this mentioned incremental XXXneos year cost to would page amount expect similar on leaseback as and XXXX, next then and you and deliveries sale tied similar are of the XX we a that. And those turn as XXXneos we we're financed X so we as what target so highlighted then those before, the million from gains we've balance I by next a the with of outcome.

that's think I the overview. So

Barry Biffle

mentioned I we're that the cost reduce not simplification everything that just the so And becoming to got costs, in you most that including is In the in ULCC. network latest to forth. Mark that's at on industry But I not of true managing everything order lowest across add kind in think look DNA. misunderstood and too, is the we think really it, you of but and think cost about convergence capacity, the the our of just space. highlighted. premier even of what we've the seen would It's the have I Frontier. I fact the We're case do if

the we'll into and roll we are seeing guidance We on we're XX% to QX in based 'XX. even like cost over maintain it as advantage that over XX% looks that continue

Operator

comes Raymond question of next Savi Our line from Syth of James.

Savanthi Syth

Just that on to of question, unit us year? think basis? us the year-over-year least could next for on better parts you Or help follow-up at of think so like last cost mid-single next digits pressure kind that seeing year, be about like should it a through again moving help or kind

Mark Mitchell

that Savi, we're yes, Yes. million run $XXX year. next of on year. target what is to next focused getting our cost savings still guiding this right mean annual working for point, not guide at the we're But through program. as part rate now I we're

this guiding we're at not So point.

Savanthi Syth

this, in progress the lot this maturity that and what maturing. so like ASMs Could looks through that I could you maybe a color you little you on, are in you of bit did of give talk Barry, were wonder of about and markets to put And year? other alluded you kind that more next if you a what a but markets year like, do as capacity lot under

Barry Biffle

question. Yes, sure. It's great a

Florida, little we Las and several of a redeployment our we year did that out new mainly bit across from So Vegas moved a look, of of significant bases. last

of worked. I hitting averages normal in saw historical routes large part caught we X/X those think

some but good large and the curve of actually you're area out think we're universally New I issues local come to We there, hit didn't was just the to and and Orleans. New Orleans. see by work disappointing expect maturity early, think We results there's really averages. early that historical we seeing going anything only really through

XXXX. are think a have wrap was our that what's bump outsized think I mentioned on capacity into you're first XX% of maturity understanding question misunderstood. as don't I to I redeployment XX% why that's going So we XX% most and people the to in

we don't there's out have I think the tailwinds that's anyone got there that on side. revenue So the

Savanthi Syth

'XX, of normal you kind versus new do back of get starting your of markets? So to mix kind mature

Barry Biffle

Yes, down. I to think it's come going

bit think we're our buy going markets. markets a probably got to to mix I'd sometime And summer spring, still of new. your kind you of going I July new tied have to growth of kind the that rate say a yes, of opportunities normal of kind really interested. -- time, largely We've I you'll growth. you'll have over little back I You're lingering, of But couple is get think to a new -- few think part probably by yes, you're

Operator

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

Shannon Doherty

is Shannon Mike. Doherty This for on

program? more $XXX So provide cost us with the can you year's of detail drivers on this savings million

Mark Mitchell

Yes.

the a yes, program cost simplification cost metrics that standpoint, -- business, are addition, really place network standpoint So about per well management business talked we by various XX% initiatives to million and of that as run crew-based and from number rate a footprint the across level us annual put that and that getting over getting out in to the we've as collectively crew the aggressive a, in $XXX target. from savings across the back, high headcount aircraft automation footprint other

Shannon Doherty

bullish to basically, initiatives Or we've going XX% I know one revenue side, but revenue have said most on. like lot is your extensively, contributor the of to the pre-tax which XX% are hitting a talked And what on you going margin you Barry, be to initiative guide? differently And them largest on? about

Barry Biffle

I and largest it to contributor happen. took math, it's network a the Well, bucket just It's think right? maturity, the if is single going

done because but the and credit of history, yet we're -- initiatives applications highest seeing that all this right? now we're perspective, huge probably we're the as in is right So credit excited the one in growth situation card card low what in We're relatively year. in a about from the seeing a over the jumped year year actually example. we've an fall, been our they're from we've a most perspective think doing our premium and massively uptake I loyalty with

several is to I the So think next gets you that revenue maturity loyalty industry should below there us, flow think years if be. through a dollars small loyalty. the the I are you out, don't over passenger compared we where take in we if you massive mean, the steps. get the And little several I that

through it changes. while to But mature. for that big takes some there a get You

So we changes. a again, I we've a of come. get because plus think we're excited look probably if bucks at But made that lot about the industry, we're got a and We've those more you in the per $XX one area think to they couple up is loyalty in passenger, teens most of passenger. this is something the

So this opportunity. is huge a

Operator

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

Andrew Didora

by Barry, Or next margins we on summer build forward? rate just comment run a double-digit to over true is is that summer? off that the that just a clarify, figure can on of kind margins of year, the going of

Barry Biffle

No. Run rate.

Andrew Didora

Was the the this moves Got about made it in was something to time differently you the some trends over markets at think your it. quarter, additional terms facility now or liquidity? And of that business made you why in the just, credit of point that right there time? raise in credit

Mark Mitchell

we're us, that a a mean I going assets liquidity. cost-efficient have increase to very of Yes, at a establishing collateral ways overall optimize And with to revolver sheet. our always loyalty for our very think look us I base gave as attractive the we to and balance way

expand successful a fleet was and growth in of given it prepared we our remarks. made from had sense. that perspective, just had highlighted outcome And the looking forward, a it in facility, with lot the the financing right a as so PDP interest significant as that just well And opportunity then so to

Operator

Wolfe. from the Group Our next line of question of comes Scott

Scott Group

or think half to you 'XX love first any And just that for questions, on deal don't to be hypothetically, think hypothetical to you does if know deal that but then capacity? and Barry, someone? want likely deal, how standalone have have So you Spirit I than with on capacity? lower digit if sure mid-single I'm higher and someone it's color that you're about waiting a you your a change approval about how with more You talk

Barry Biffle

on mid-single let not ask for try, Nice to going the we're another But quarter. commenting answer since yes, capacity actually it. But look, you out and putting not by plan that's growth we're question We're targeting Scott. for year. I'll M&A. digits I'm the not it

James Dempsey

bit this next network you progress to of of little But year, give adjusted as you to color, second year. through that into half has we obviously Scott, the lap a the

And so slower year year. normalizes first miles XXX half the plus of growth. next you the so, have will as or through around minus obviously or progress Stage

year. the So the ASM but next shape back the the business. business down to But in year of see some through first growth the you're come actual kind into of of months as going see year, you will half how flow growth effect Wednesday X lower of next that's seat next in the taking year Tuesdays, capacity predominantly

Scott Group

I we is there's What order like, CASM when right? not... of QX, But cost at ex, look magnitude there. guidance hurricane -- $X.XXX it's your some think in guess for what then of And something I

Mark Mitchell

Yes, I mean...

Scott Group

goes does Sustainable lower that CASM there? Like from what goes to what ex level? grow from there? -- Or

Mark Mitchell

right, you up look some and year-over-year million when all, mind, in lease you've because first the extensions XX% as back, step benefit got you from to had right, is last I -- did. the stage. year all, at mean, lower first a we growth $XX so fleet this mean, of year, And I of got you you for at number keep then look of Right.

well. up You've as got that's growth departure

of tied tied some some to fleet, a is rates with along larger with items the that drive those the so maintenance increase. we're and year-over-year just -- just in of some what right, to mix And combined the that station

for is per what full be on mean, over year the overall look passenger down. versus we're the to as consistent the the remains still basis down projecting a been rest beginning year. of or an stage CASM perspective, it adjusted it from be was, ex from you have when mean, that the mentioned industry. so Barry was going X% earlier And of XX% I And as advantage I our year And to we cost well, our

Barry Biffle

need Yes, I at to think Scott, look stage. optically, the you

look won't it So at big amount. adjusted, this if stage you see you

Scott Group

I'm run CASM No, to sort get the just the of increase. rate out year-over-year absolute I the right be $X.XXX. to Is going figure about forward? that trying thinking

Barry Biffle

That's -- adjusting not Scott. stage it, you're

Mark Mitchell

get a closer mentioned adjusted I year number, mean, Yes, that and to other down off-peak on the mean, capacity X%. you quarter, for I but the tied I right, there I days that stage you're think items are still the to full $X.XX. there items are And basis, within on to lower in fourth the

Operator

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

Jamie Baker

know try fuel let year. by gains of the leaseback headwind next to On couple I want headwind a feels CASM contribute could worked tailwind a competitors CASM, leaseback year a up give sale like So next earlier loaded to year for on from admittedly have But this turn inspired full just me strategy you year-on-year? it questions, Savi Thanks year fully guide. to a ex and XXXX could this asking. don't it is a you indeed call. what my sale

Mark Mitchell

given network next you're than more mean, going simplification And that the isolating number manage other we're our next the we that. of continue you a just look enough costs. to that got items, have the But looking mitigate the lower tailwinds of there's drive benefit, would I full aggressively believe sale we've as year, year to at to on gains. right, and to certainly year, sale leaseback mean the and mix I I gains mean Yes. aircraft, leaseback number

Jamie Baker

And question you comment on to backward looking. then not M&A. wholly is future is asking My Barry, this

It's been, don't So let XX, me strategy. XX I months. try know, that

not rearview that's level? the still just looking the original what might everything comment, happened original, the percentage Spirit at asking forward. Frontier looking apply industry in So of mirror, the you rationale to So given

Barry Biffle

really you I but the can't that. Jamie, on ULCC. excited comment we're you, know Look, being I love Premier about

I that we advantage. the We've have think expand we that we proven have that lowest proven cost. our can cost

kind We think, going all together. side excess we're capacity. revenue premiumization, forth. I on that better for of so loyalty, executed have I coming these the initiatives, everything's And probably, the for think to deployed And network and buck

our excited we're future happens. And see So about now. right what

Jamie Baker

just... Could another I in, squeeze one

Barry Biffle

variety. same as as have long it's you let I'll not the one

Jamie Baker

you've quarter. on I guide but it, I the quarter let's the comments in quarter margins the the outcome, the compare to already to just were, flattish your Notwithstanding second want yourself, if don't second call repeat made fourth call, Okay. you

You're business, understand better in is tighter to explain totally And second mean, is than guiding domestic that quarter, help much seasonality? it the the Fuel identify your today. ] is why something but quarter. has [ the or airline I guide capacity fourth isn't would just completely you headwinds in margin I so seasonality what lower. for ballpark $X.XX

Barry Biffle

well was as know don't are Tampa climbing, but then impact wants Central we on with year area, this underestimate think Florida side to on it having cost in have had revenue and climbing mean, base of that would we and hit to how would good that brag didn't seasonality, think not impact. was We that its look, a that about. very But on get sales have we great I I your the We that we Well, have hurricanes, Florida kept know closer it. but Mark we back-to-back -- our base. -- gotten good It's And don't helpful, not been. plus disappointed great. you climbing, X that had I hurricanes. much when just the single-digits, It's had not Orlando but X the and them

of is right got lot of a brand now. issue new the maturity just other we've markets The

we I I so will of trying lot cheap. is as the you in had low, never July. September I were wanted healthy it fares mean, next of season. that think cheap pretty were been seats, there Jamie, normalize And go you that. move only that we're taking not a in other July, a factor drag one fares if there's to mean, kind this from into And the definitely But summer.

So anybody that wanted peak to to. during time the was travel able

off the reeling so And bomb -- still on kind the world, we're in from and that. capacity of that and went

time, season, we think we're optimistic mean, growth lower the first have to move change. in now I is I going capacity as the time. to GDP actually to going winter we're than a long for that this

don't industry we to not And to do to bring for how you've what but so been I reps. that's need up know you underestimate, going think around, long

Operator

comes Our Citi. Trent line of the of Stephen from next question

Stephen Trent

answered, my one if but questions expectations could about ask I of have growth. Most around been future your

sort attrition your for on growth your passenger example, guys' view flow, versus carriers So with of Volaris? to when about going any your come level Mexico's think organic that's from from you of versus high much other how alliance

Barry Biffle

probably organic I Look, extent on day, a end the leaves someone or the going than faster to questions. But can at think think we're about talk nimble some costs an I can business and in opportunity, we're higher the the market to with opportunity great That's focus and probably makes folks start will that and we it jump someone that it growth. Bobby But on anybody. the think network. know I of most I

Robert "Bobby" Schroeter

here. think to -- the and I nimble we're I Look, did speaks and did network -- And we what history that we modified we the Yes. mean, there.

the a it's but You've maturation which bit this heard during this. word this this quite real, conversation, of is

talk up a as access things lower year, continue maturation that at in our and provide the have could network of necessarily some These things natural are go wanted we're that we -- things. then, cost the to. us product other a ago, and is we cost, we a variety So able we'll get have through itself. And providing had but be months into else of set and than we'll lowest there about of premiumization customers growth anybody the the of that haven't of build this, we it next and terms to course, is and

we've us in as helps still as this customer So and trying maturation we're got. to phase retain both that's grow and well, base who our

as there into So of the we opportunity move future. lots

Operator

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

Duane Pfennigwerth

month Was pushed deliveries was the Can to that Or December of react the bit to getting specifically? schedule you talk you little a that about else? to? or recent had aircraft changes something that

James Dempsey

Yes. the deliveries. been half months, Wednesday, for is manage adjusting down. Look, the that taking adjusting obviously, Saturday the been some just our number month, to of last first to Duane, flying change recent of we've And Tuesday, the aircraft we've over network movement in

to nothing our that it's us as so And closer network other significant month. finalizing to get really the we than

Duane Pfennigwerth

And if of Not saying future contracts you're sell leasebacks, sounds if XXXX could actually for on But that allow delivery. saying to sale your contractually, X%, sale book take I for your delivery for in value not your outright it's doing plan monetize you you're XX in future baked in follow-up, sale then like which leaseback book? to X%? it's Understand but but but do need XXXX, just aircraft assume would the it Or hit going your you front. my grow the this, in positions were, let's say the through sale. that's some if to to you not, plan outright interested

Barry Biffle

our exists. commercial it out. -- I time it, into that lot deferred And guess, schedule lumpy. get spent on them it the terms kind a and, a I bunch it we've got, But know I can't delivery we confidential to about this right of think of and with with had work to Airbus summer good of and kind smooth profile a comfortable very of we're as we of deals. of recently opportunity now the lot So feel fleet very

fix chains, the their able it and it that from from took deferrals all supply kind we were those of created kind with their And out. the various challenges they of, were to really so we smooth and problems deferrals had

very about Duane. feel profile, we good So the

Operator

comes Our of the Christopher from Stathoulopoulos of next line question SFG.

Christopher Stathoulopoulos

here. question, keep So, X Barry, it but to X parts just I'm going to

for we Just should to want XXXX. think how understand, the better about network

question of when mix the earlier or mix question, us give mature the think new was remind capacity, versus new that longer to also relates then it was if standing, there of versus markets. you you that maturity could a a criteria of that And So there. kind evaluating I consider

your just of still segment? And routes? profitability looking year think non it that for perhaps want regions to we origination, contextualize how or as base about insofar crew should B, So then so by it's crew at placement shape, or but whether breadth taking flight schedule is versus selling cash profit next by you capacity,

Barry Biffle

Okay.

there. So of there's couple in parts a

the if So over that by growth specific, X/X what time I of had of get of happened we redeployment this you And the months, is said year what flying routes, hope very kind will. flying of kind year amount mid was our to to have. new in a that be closely new we next the I is we we with mirrors were

another said we we in if have might were XX%, XX% So new markets. way, growing

that. I'm double-digit think sorry, routes. within our footprint for we make likely time, of margins. some probably our -- density if see we'll at on other grow Look, criteria for your solid new than we your rather the existing. we for for we'll opportunities, look So outside But that parts things several will digit years, -- look

production say And costs, I estimates. think the we Every so now we surprised accurate get rate be, our got look cost about on at on -- revenue hit probably I'd costs. on we revenue to we're good and when what or X/X is XX%, don't to the structure a going XX% bad then relative we've know, we and

opportunities. the largely, to to than booking market probably curve I benefit like There say. mentioned, second the the we tend guess We of closer regions of stimulate. don't we didn't most sometimes, but why didn't dynamics industry. question is last why, be some materialize. then think, Orleans wait, I interesting it's sure hard what New We're And It could happen, so not just have in didn't. And

at opportunities. we so look And the

what's opportunity by to be an summer, it So X. everybody or doing going could next open up

We have long a list.

kind first go on we're of And market nodding jump themselves, to of to driven really rolling have someone X And actually And what -- be if cuts I'm Planning opportunities [ ] We be bunch ones head. it. our his X to present but to after a Head it. going plan. the a we'll who's year going that's staring --

Operator

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

Conor Cunningham

you that segment following ULCC a made about this And as segment whole. come? structural change talked being the enough you do to has that margin within comment further just maybe the Maybe on needs further you that, come the supply to point? at Or could to premier think out? you up your you rationalization question. comment, then expect Barry, capacity so within double-digit is Do ULCC, do there --

Barry Biffle

fantastic. that ULCC think validated is look, we so model the have Well, I

that international, the by and domestically And of include down. we domestic carriers at only basis margin we're that look in flying best their we are tier on States, far if hands domestic think you if loyalty, revenues only we one and think probably from out huge I United the the on margins. subsidy half flying a have parse top performing business a

similar And our body narrow so the happened and routes. in those there's been we in type And to too tend capacity capacity. we to fly much have model. What's simply the validated much there's been just think particular too United States,

are seeing a We their that target to that. pull continue until will the way you're going from capacity capacity happen. market push people you're And long I reach margins. argue would out, The forces see away to industry think I and

positive do we so expect to And and to We've seen carriers continue do they'll to momentum. it. that tough other ourselves. see the history shows continue We've made decisions

ULCC in model pretty that will come remain the highest will the back So shape confident and I margin space. in that domestic be domestic will capacity size and the margins right the you U.S. in that the

Conor Cunningham

about you why the scale at to lot. then you that Can a Okay. sustained why Frontier and That's point talk talked matters helpful. past, about the bit cash this a flows And matters perspective long-term? over earnings could little just maybe about in just from we've a talk

Barry Biffle

Yes, sure.

while single we passenger million the And the if scale. XX ago, you think low $XXX is upper we're it that the passengers, a biggest is opportunity could about to excited on I actually digits is benefited the get side. from and the loyalty. most single benefit thing that million year, math. you about a think to do if exists, digits, can that's revenue scale mentioned actually the on I a that from $X

the of and And have. loyalty top is, they card usability your so the your more you the and more more so currency mind have, scale

from of of one we we've I buying some guess the, power, the is cost would that argue, at the but scale. I benefit benefits the of believe biggest of kind our DNA without some those. kind oftentimes overcome So that carriers

So mainly it's on revenue side. the

Operator

Our Cowen. the question from of Tom comes next TD Fitzgerald, line

Thomas Fitzgerald

years, Is here. from something that other with North or per that's the like going timeline? year you couple revenue said next towards? think you're to of like that about a comment I handful just bucks the $X sticking passenger What your Star that going over you're Just of working is next expecting

Barry Biffle

Yes.

couple I think a like it years. of looks

to laid of $X guess, believe the a coming out very in get yet. several the range to we haven't over it's realistic that a, I target $X years. kind We But next

Thomas Fitzgerald

a really efficiency And per helpful. even housekeeping just taking you're in, lot of been quarter fuel It pretty of ASMs still last That's year-on-year though a and just Okay. then that's quarter one. gallons, neos. kind looks like muted this

Just wondering if I'm missing on any anything or comment there that.

Barry Biffle

Yes.

of the factor. a stage a that's kind little while talked We So about bit ago. a

You have to look at the fuel burn by stage.

stayed pulled and And efficiency and that the the the stage. still the same we is you time taxi when especially stayed get hour. industry it's stage, so But down miles at an same, XXX cruise the climb leading you're where it when running

Operator

Barry back further I'm at for questions time. this to turn it now I'll no closing Biffle remarks. showing

Barry Biffle

want I excited we We'll you in tailwinds XXXX. to we're XXXX. believe the ULCC got are everybody you going year. premier into about and today. talking joining We that forward really next We talk to in to to look the for thank we've

Operator

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

disconnect. now may You

Frontier (ULCC) 29 Oct 242024 Q3 Earnings call transcript