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Dec 31, 2023
Frontier Q4 2023 Earnings Report
Frontier's Q4 2023 financial performance was reported, showing a decrease in total operating revenues but improved cost management.
Key Takeaways
Frontier Airlines reported a decrease in total operating revenues to $891 million, a 2% decrease compared to Q4 2022. Despite the revenue decrease, the company significantly outperformed guidance due to strong operational performance and cost execution. Pre-tax income stood at $6 million, with an adjusted pre-tax income of $7 million. The company is focusing on network simplification, revenue diversification, and cost savings initiatives to expand profitability in 2024.
Pre-tax margin was 0.7 percent, and adjusted pre-tax margin was 0.8 percent.
Total operating revenues were $891 million, a 2 percent decrease compared to the same quarter in 2022.
Cost per available seat mile (CASM) decreased by 10 percent compared to 2022.
Frontier Miles loyalty program was reimagined for 2024.
Forward Guidance
The Company continues to see sequential improvement in the revenue environment as adjusted for seasonality. The Company is focusing its growth on overpriced and underserved 'VFR' (Visiting Friends and Relatives) markets which, alongside network simplification, revenue diversification and cost savings initiatives, are expected to expand profitability in 2024.
Positive Outlook
- Capacity is anticipated to grow 5 to 7 percent compared to the 2023 quarter.
- Fuel costs are expected to be $2.85 to $2.95 per gallon based on the blended fuel curve on February 2, 2024.
- Adjusted (non-GAAP) total operating expenses (excluding fuel) are anticipated to be $645 to $660 million.
- The effective tax rate is estimated to be approximately 23 percent.
- Capacity is anticipated to grow 12 to 15 percent compared to 2023
Challenges Ahead
- Adjusted (non-GAAP) pre-tax loss margin is expected to be (4) to (7) percent (excluding special items).
- The Company is unable to reconcile these forward-looking projections to GAAP as the nature or amount of such special items cannot be determined at this time.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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