The parent of ultra-low-cost carrier Frontier Airlines expects to be loss-making in its first-quarter earnings, as it cuts its full-year earnings forecast amid an “uncertain environment” of weakened demand and revenue growth.
Frontier Group points to fare competition and sluggish economic sentiment – amid the Trump administration’s ongoing trade war – for the revised earnings forecast, which it issued on 10 April.
The Denver-based company it expects revenue growth in the first quarter to be around 5% on capacity growth of around the same levels.
“Revenue growth is anticipated to be lower than expected due to weakened demand in March, resulting in fare discounting and promotions across the industry, amplified by the close-in nature of Frontier’s bookings,” Frontier states.
The airline will also be trimming capacity for the April-June quarter - “down low single digits” compared the same period a year ago - with cuts to be focused on “off-peak days of the week”.
Frontier adds that it will be closely monitoring the “demand environment and make further adjustments” where needed.
Frontier adds that it will “unable to reaffirm” its full-year forecast - first issued in February - of an adjusted profit of $1 per share.
Airline Business data shows Frontier was loss-making in the first quarter of 2024, posting a net loss of $26 million. However, the airline was in the black for the full-year, with a net profit of $85 million.
“Given the uncertainty in the current environment, the company is focused on maximising its liquidity through diligent management of the controllable elements of the business, including, but not limited to, optimisation of capacity and related costs, and discretionary capital spending,” states Frontier.
Frontier Group is the second US operator in recent days to cut its financial forecasts, as mounting economic concerns rattle global markets.
On 9 April, Delta Air Lines – the first major carrier to report its earnings – said it would be slashing passenger capacity and curbing fleet and workforce growth, in response to slowing demand.
Frontier will release its first-quarter earnings on 1 May.
