Frontier Airlines posts 71% airfare increase

Frontier Airlines reported a 71% increase in airfare in the third quarter, pushing fare revenue to an average of $67.82 per passenger compared to $39.74 last year. These major ticket price hikes were designed to balance out soaring jet fuel expenses that put earnings at risk for the country’s top low-cost carrier, which had already surpassed Spirit Airlines as the nation’s leading discount airline prior to that carrier’s May collapse.

Passenger Growth Amid Surging Fuel Bills

Factoring in the budget airline’s many fees, including levies for bags placed overhead or checked, overall passenger revenue climbed 30% annually to reach $138.22. Despite the higher prices, customers kept booking flights. Frontier’s passenger count rose 18% to more than 9.8 million people in the quarter, marking a difference of 1.5 million passengers from last year. The company stated that demand remains strong even at these elevated prices.

However, the carrier still incurred financial losses as its fuel bill soared 82% to $425 million. Frontier widened its third-quarter loss to $104 million from a $77 million loss a year earlier. Carriers ranging from Delta Air Lines to Frontier have noted that record jet fuel prices—representing their biggest cost after labor—are actively eroding profits despite customers continuing to book flights.

Frontier Shares Rise as Company Forecasts Fourth Quarter Profit

Looking ahead, Frontier forecast the possibility of an adjusted fourth-quarter profit, stating that its anticipated results range from an adjusted loss of 15 cents per share up to adjusted earnings of 5 cents per share. Following the quarterly disclosures, company shares were up more than 9% in afternoon trading Wednesday, building on earlier morning gains.