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Jun 30, 2024
Frontier Q2 2024 Earnings Report
Frontier reported a slight increase in total operating revenues and achieved significant cost savings.
Key Takeaways
Frontier Airlines reported a 1% increase in total operating revenues to $973 million for Q2 2024. The company achieved over $100 million in annual run rate cost savings and saw a reduction in CASM. Pre-tax income and net income were $32 million and $31 million, respectively.
Total operating revenues increased by 1% compared to Q2 2023, reaching $973 million.
Achieved annual run rate cost savings of more than $100 million from the cost savings program launched in Q3 2023.
CASM decreased by 6% compared to Q2 2023, while adjusted CASM (excluding fuel) decreased by 10%.
Pre-tax income and adjusted pre-tax income were both $32 million, with a pre-tax margin of 3.3%.
Revenue by Segment
Forward Guidance
Frontier anticipates capacity growth of 4-6% for Q3 2024 and expects adjusted pre-tax margin to be between (3) to (6) percent. Full year capacity growth is projected at 5-7% with adjusted pre-tax margin between (1.5) to 1.5 percent.
Positive Outlook
- Significant portion of scheduled capacity in the third quarter of 2024 is allocated to new markets.
- New markets expected to drive higher RASM as they mature.
- Industry capacity is expected to better align with demand.
- Average selling fares for September 2024 have inflected positively compared to the prior year.
- Company continues to make significant progress in allocating capacity growth to high-fare and underserved VFR markets.
Challenges Ahead
- Fare pressure caused by excess domestic capacity growth.
- Weather, including Hurricane Debby, is expected to have an estimated 4 percentage point impact on adjusted pre-tax margin.
- July Microsoft/CrowdStrike outage is expected to have an estimated 4 percentage point impact on adjusted pre-tax margin.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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