Frontier Group Holdings (NASDAQ:ULCC), Inc., the parent company of Frontier Airlines, announced today an update to its fourth-quarter 2024 financial guidance that reflects better-than-expected results and a positive outlook for the coming year. The airline disclosed that its adjusted pre-tax margin for the fourth quarter of 2024 is now expected to be around 4%, a significant improvement from the previous guidance range of breakeven to 2%.
The update, based on a recent SEC filing, indicates that the company's revenue per available seat mile (RASM) for the same quarter is projected to be approximately 14% higher than in the fourth quarter of 2023. This increase is attributed to the success of its initiatives under 'The New Frontier' strategy, which includes network optimization and capacity growth moderation, as well as effective yield management.
Frontier's operational performance has also shown notable improvement, with a December completion factor ranking second among major U.S. carriers. This has been supported by the airline's shift towards network simplification.
The company's adjusted operating expenses, excluding fuel, for the fourth quarter are expected to range between $725 to $735 million, slightly lower than the previously issued guidance. Frontier also anticipates maintaining its cost per available seat mile (CASM), excluding fuel, with a one percent reduction when stage-length adjusted to 1,000 miles for the full year of 2024 compared to 2023.
In terms of capacity, the fourth quarter of 2024 saw a decrease of approximately 2.1% compared to the same period in 2023. The average fuel cost per gallon is expected to be between $2.45 to $2.48. The company's total liquidity at the end of 2024 is projected to be around $930 million, which includes $205 million available from its revolving credit facility.
Looking ahead, Frontier Group Holdings plans to release its year-end financial results on February 7, 2025, before the market opens, and will conduct a live webcast for analysts later that day. The company's optimism is evident as it targets a return to double-digit adjusted pre-tax margins by the summer of 2025.
The information in this article is based on a press release statement from Frontier Group Holdings, Inc., and has not been independently verified.
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