Frontier's Stock Drops 19.7% After Financial Report

By Bobby Samwell • Tuesday, October 29 10:30 • Permanent Link

Frontier Group Holdings, Inc. has recently released its 10-Q report, providing insights into its financial performance and operational updates. The company, headquartered in Denver, Colorado, offers low-fare passenger airline services to leisure travelers in the United States and Latin America. As of December 31, 2023, it operated a fleet of 136 Airbus single-aisle aircraft.

In the 10-Q report, Frontier detailed several key developments. Notably, the company entered into various financing transactions in September 2024, including a revolving line of credit and increased capacity for financing facilities to fund aircraft pre-delivery payments. Additionally, Frontier experienced delays in Airbus aircraft deliveries, leading to amendments in the aircraft delivery schedule. The company also addressed potential impacts from Pratt & Whitney's engine inspection requirements and announced a legal settlement, resulting in $40 million in damages during the three months ended September 30, 2024.

Financially, Frontier reported total operating revenues of $935 million for the three months ended September 30, 2024, representing a 6% increase compared to the same period in 2023. This growth was primarily driven by a 4% increase in capacity, measured by available seat miles (ASMs), and a 2% increase in revenue per available seat mile (RASM). However, total operating expenses decreased to $916 million during the same period, resulting in a cost per available seat mile (CASM) of 9.10¢, a 6% decrease compared to 2023.

Frontier's net income for the three months ended September 30, 2024, was $26 million, a significant improvement from the net loss of $32 million in the corresponding period in 2023. Adjusted net income for the same period was $11 million. As of September 30, 2024, the company's total available liquidity stood at $576 million, comprising cash and cash equivalents, with $205 million available to be drawn under its revolving loan facility.

Following these announcements, the company's shares moved -19.7%, and are now trading at a price of $5.83. Check out the company's full 10-Q submission here.

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