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Jun 30, 2023
Frontier Q2 2023 Earnings Report
Achieved record post-pandemic pre-tax margin and improved cost efficiency.
Key Takeaways
Frontier Airlines reported a strong second quarter in 2023, achieving a record post-pandemic pre-tax margin of 9.1% and demonstrating improved cost efficiency. The company's total operating revenues reached $967 million, a 6% increase compared to the same quarter in 2022. Frontier also took delivery of three A321neo aircraft, increasing the proportion of its fleet comprised of fuel-efficient A320neo family aircraft to 75%.
Total operating revenues reached $967 million, a 6% increase year-over-year.
Pre-tax margin reached 9.1%, the highest post-pandemic margin.
Adjusted CASM (excluding fuel) improved by 5% compared to the 2022 quarter.
Ancillary revenue per passenger was $80, a $5 increase year-over-year.
Forward Guidance
The Company expects third-quarter capacity to grow by 21 to 23 percent over the comparable 2022 quarter and full-year capacity to grow 19 to 21 percent over the prior year. Third quarter adjusted (non-GAAP) pre-tax margin (excluding special items) is expected to be 4 to 7 percent, and the full year 2023 adjusted (non-GAAP) pre-tax margin (excluding special items) is expected to be 4 to 6 percent.
Positive Outlook
- Third-quarter capacity is expected to grow by 21% to 23% compared to 2022.
- Full-year capacity is projected to increase by 19% to 21% over the prior year.
- Third quarter adjusted pre-tax margin is expected to be between 4% and 7%.
- Full year 2023 adjusted pre-tax margin is expected to be between 4% and 6%.
Challenges Ahead
- Weather-related cancellations in the third quarter are expected to have an impact.
- Slightly higher fuel cost per gallon than previous guidance is anticipated.
- A moderation in average fares is expected due to a shift in demand to competing long-haul international destinations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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