DENVER, May 2, 2024 /PRNewswire/ -- Frontier Group Holdings, Inc. (NASDAQ:ULCC), parent company of Frontier Airlines, Inc., today reported financial results for the first quarter of 2024 and issued guidance for the second quarter and full-year 2024. First Quarter 2024 Summary: Total operating revenues were $865 million, 2 percent higher than the comparable 2023 quarter, on capacity growth of 8 percent Cost per available seat mile ("CASM") was 9.49 cents, a reduction of 5 percent over the comparable 2023 quarter Adjusted CASM (excluding fuel), a non-GAAP measure, was 6.71 cents, on a 9 percent shorter average stage length; adjusted CASM (excluding fuel) on a stage-adjusted basis to 1,000 miles, a non-GAAP measure, was 3 percent lower than the comparable 2023 quarter Pre-tax loss and adjusted (non-GAAP) pre-tax loss were each $24 million; pre-tax margin and adjusted (non-GAAP) pre-tax margin were each (2.8) percent, reflecting better than expected cost and revenue performance Took delivery of six A321neo aircraft during the first quarter, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 80 percent as of March 31, 2024, the highest of all major U.S. carriers Generated 105 available seat miles ("ASM") per gallon, a 2 percent improvement compared to the corresponding 2023 quarter, reaffirming Frontier's position as "America's Greenest Airline" as measured by fuel efficiency (ASMs per fuel gallon consumed during the first quarter; compared to all other major U.S. carriers) As part of the strategy to diversify revenue and provide additional premium options, the Company launched BizFare, a new program designed to help companies save money on business travel and deliver a convenient, rewarding experience, and UpFront Plus, a new upgraded seating option with extra space and comfort in the first two rows of the aircraft Opened a 10th crew base in Cleveland, announced Frontier's largest network expansion focused on high-fare, underserved markets and continued to trend as planned toward targeted levels of scheduled out-and-back flying by peak summer 2024 Launched a reimagined Frontier Miles loyalty program which contributed to the Frontier Airlines World Mastercard being recognized by Money.com as the best airline credit card for budget travel, citing its high reward rate and the fact that every dollar spent counts toward elite status "Rigorous cost and revenue management contributed to first quarter results which exceeded expectations," commented Barry Biffle, Chief Executive Officer. "We expect results in the balance of the year to build on the revenue and network enhancements we're implementing, most notably the transition to underserved, high-fare markets, revenue diversification and cost savings, including benefits related to network simplification. I'm proud of Team Frontier for their extraordinary contributions and for their ongoing commitment to deliver Low Fares Done Right every day." First Quarter 2024 Select Financial Highlights The following is a summary of first quarter select financial results, including both GAAP and adjusted (non-GAAP) metrics. Refer to "Reconciliations of Non-GAAP Financial Information" in the appendix of this release. (unaudited, in millions, except for percentages and per share data) Three Months Ended March 31, 2024 2023 As Reported(GAAP) Adjusted (Non-GAAP) As Reported(GAAP) Adjusted (Non-GAAP) Total operating revenues $                  865 $                  865 $                  848 $                  848 Total operating expenses $                  896 $                  896 $                  873 $                  872 Pre-tax income (loss) $                   (24) $                   (24) $                   (17) $                   (16) Pre-tax margin (2.8) % (2.8) % (2.0) % (1.9) % Net income (loss) $                  (26) $                  (21) $                  (13) $                  (12) Diluted earnings (loss) per share $               (0.12) $               (0.09) $               (0.06) $               (0.06) Revenue Performance Total operating revenue for the first quarter of 2024 increased 2 percent to $865 million on capacity growth of 8 percent, both compared to the corresponding 2023 quarter, resulting in a revenue per available seat mile ("RASM") of 9.16 cents, a reduction of 5 percent compared to the corresponding 2023 quarter. Departures increased 14 percent on a 9 percent shorter average stage length, and total revenue per passenger was $123.53, down 1 percent, all compared to the corresponding 2023 quarter. The decline in RASM from 9.67 cents in the 2023 quarter was driven by a decrease in flown load factor from 83 percent to 73 percent, associated with the Company's focus on maximizing total revenue, with passenger mile yields in the first quarter of 2024 increasing to 12.6 cents compared to 11.7 cents in the corresponding 2023 quarter. Cost Performance Total operating expenses for the first quarter of 2024 were $896 million, including $263 million of fuel expenses at an average cost of $2.93 per gallon. Adjusted total operating expenses (excluding fuel), a non-GAAP measure, were $633 million, approximately 3 percent below the midpoint of guidance due primarily to better-than-expected cost performance across the organization. CASM was 9.49 cents in the first quarter of 2024, 5 percent lower than the comparable 2023 quarter. CASM (excluding fuel), a non-GAAP measure, was 6.71 cents, 1 percent higher than the 2023 quarter. Adjusted CASM (excluding fuel) stage-length adjusted to 1,000 miles, a non-GAAP measure, was 3 percent lower than the comparable 2023 quarter due primarily to three additional sale-leaseback transactions in the quarter along with aggressive cost management across the organization that helped mitigate year over year inflationary impacts. Earnings Pre-tax loss for the first quarter of 2024 was $24 million, reflecting a pre-tax margin of (2.8) percent. Net loss for the first quarter of 2024 was $26 million, inclusive of a $5 million non-cash valuation allowance against deferred tax assets largely related to the pre-tax losses generated during the quarter. This allowance is not expected to affect the Company's ability to utilize cumulative net operating losses against future potential income tax liabilities. Excluding this item, adjusted (non-GAAP) net loss was $21 million. Cash and Liquidity Unrestricted cash and cash equivalents as of March 31, 2024 was $622 million, $13 million higher than year-end 2023. Fleet As of March 31, 2024, Frontier had a fleet of 142 Airbus single-aisle aircraft, as scheduled below, all financed through operating leases that expire between 2025 and 2036. Equipment Quantity Seats A320neo 82 186 A320ceo 8 180 - 186 A321ceo 21 230 A321neo 31 240 Total fleet 142 Frontier is "America's Greenest Airline" as measured by fuel efficiency (ASMs per fuel gallon consumed during the first quarter; compared to all other major U.S. carriers). During the first quarter of 2024, Frontier generated 105 ASMs per gallon, a 2 percent improvement compared to the corresponding 2023 quarter. Frontier took delivery of six A321neo aircraft during the first quarter of 2024, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 80 percent as of March 31, 2024, the highest of all major U.S. carriers. The A321neo is expected to unlock meaningful scale efficiencies by way of fuel savings and higher average seats per departure. As of March 31, 2024, the Company had commitments for an additional 204 aircraft to be delivered through 2029, including purchase commitments for 67 A320neo aircraft and 137 A321neo aircraft, the latter of which represents 67 percent of future committed deliveries. New, Upgraded FRONTIER MILES℠ Frequent Flyer Program In January 2024, the Company officially launched its reimagined FRONTIER Miles℠ loyalty program allowing consumers to "Get It All For Less." The new program enables consumers to earn Travel Miles and Elite Status Points fast and get rewarded for each dollar spent with the Frontier Airlines World Mastercard with the highest earn rate on total eligible purchases in the industry, at up to 20 miles or points per dollar spent for completed flights. Travel Miles and Elite Status Points now accrue based on dollars spent on Frontier eligible products, including flights, bags, seat assignments, and bundles, with a standard 10x multiplier such that $1 of spend earns 10 miles. Mileage multipliers increase at every status level up to 20x. The enhancements to the credit card earned a distinction from a leading personal finance publication. In March 2024, Money.com recognized the Frontier Airlines World Mastercard as being the best airline credit card for budget travel, citing its high reward rate and the fact that every dollar spent counts toward elite status. Forward Guidance The guidance provided below is based on the Company's current estimates and is not a guarantee of future performance. This guidance is subject to significant risks and uncertainties that could cause actual results to differ materially, including the risk factors discussed in the Company's reports on file with the Securities and Exchange Commission (the "SEC"). Frontier undertakes no duty to update any forward-looking statements or estimates, except as required by applicable law. Further, this guidance excludes special items and the reconciliation of non-GAAP measures to the comparable GAAP measures because such amounts cannot be determined at this time. The Company is making significant progress to simplify its network and allocate growth to high fare and underserved "VFR" (Visiting Friends and Relatives) markets and is on track to achieve its target of over 80 percent out-and-back flying by June 2024. These efforts are supported by the expansion to 13 crew bases, with Cincinnati and Chicago expected to open in May 2024 and San Juan, Puerto Rico expected to open in June 2024. Alongside seasonality factors, revenue diversification and non-fuel cost savings initiatives, the network transition is expected to drive sequentially higher adjusted (non-GAAP) pre-tax margin in the second quarter and support the full-year 2024 adjusted (non-GAAP) pre-tax margin guide of 3 to 6 percent, despite higher fuel costs. Second Quarter 2024 Capacity is expected to grow by 12 to 14 percent over the comparable 2023 quarter. Pursuant to the shift to high-fare, underserved markets, a significant portion of scheduled capacity in the second quarter of 2024 is allocated to new markets which the Company believes will drive higher RASM as they mature. Fuel costs are expected to be $2.80 to $2.90 per gallon based on the blended fuel curve on May 1, 2024. Adjusted (non-GAAP) total operating expenses (excluding fuel) are expected to be $705 to $720 million. Adjusted (non-GAAP) pre-tax margin (excluding special items) is expected to be 3 to 6 percent, including the impact of higher fuel prices and network transition. Full Year 2024 Full-year guidance is unchanged from February 6, 2024 with the exception of fuel prices. To recap, capacity is expected to be 12 to 15 percent higher compared to 2023 and adjusted (non-GAAP) pre-tax margin is expected to be 3 to 6 percent (excluding special items). Fuel costs are now expected to be $2.80 to $2.90 per gallon based on the blended fuel curve on May 1, 2024, $0.10 per gallon higher than previous guidance. Adjusted (non-GAAP) CASM (excluding fuel), stage-length adjusted to 1,000 miles, is expected to be down 1 to 3 percent over the prior year. Pre-delivery deposits, net of refunds, are expected to be $20 to $50 million and other capital expenditures are expected to be $160 to $180 million. The current forward guidance estimates are presented in the following tables: Second Quarter 2024(a) Capacity growth (versus 2Q 2023)(b) 12 to 14 percent Adjusted (non-GAAP) total operating expenses (excluding fuel) ($ millions)(c) $705 to $720 Average fuel cost per gallon(d) $2.80 to $2.90 Effective tax rate(e) ~23 percent Adjusted (non-GAAP) pre-tax margin 3 to 6 percent Full Year 2024(a) Capacity growth (versus 2023)(b) 12 to 15 percent Average fuel cost per gallon(d) $2.80 to $2.90 Adjusted (non-GAAP) CASM (excluding fuel), stage-length adjusted to 1,000 miles(c) Down 1 to 3 percent Adjusted (non-GAAP) pre-tax margin 3 to 6 percent Pre-delivery deposits, net of refunds ($ millions) $20 to $50 Other capital expenditures ($ millions)(f) $160 to $180  _________________ (a) Includes guidance on certain non-GAAP measures, including adjusted total operating expenses (excluding fuel) and adjusted pre-tax margin, and which excludes, among other things, 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. (b) Given the dynamic nature of the current demand environment, actual capacity adjustments made by the Company may be materially different than what is currently expected. (c) Amount estimated excludes fuel expense and special items, the latter of which are not estimable at this time. The amount takes into consideration the additional expected capacity. Stage-length adjusted to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000). (d) Estimated fuel cost per gallon is based upon the blended jet fuel curve on May 1, 2024 and is inclusive of estimated fuel taxes and into-plane fuel costs. (e) The Company's second quarter actual tax rate may differ from the forecasted rate due to varying factors which may include, but are not limited to, the composition of items of income and expense recognized, including the amount of non-deductible or other similar items. (f) Other capital expenditures estimate includes capitalized heavy maintenance. Conference Call The Company will host a conference call to discuss first quarter 2024 results today, May 2, 2024, at 11:00 a.m. Eastern Time (USA). Investors may listen to a live, listen-only webcast available on the investor relations section of the Company's website at https://ir.flyfrontier.com/news-and-events/events. The call will also be archived and available for 90 days on the investor relations section of the Company's website. About Frontier Airlines Frontier Airlines, Inc., a subsidiary of Frontier Group Holdings, Inc. (NASDAQ:ULCC), is committed to "Low Fares Done Right." Headquartered in Denver, Colorado, the Company operates 142 A320 family aircraft and has the largest A320neo family fleet in the U.S. The use of these aircraft, along with Frontier's high-density seating configuration and weight-saving initiatives, have contributed to Frontier's continued ability to be the most fuel-efficient of all major U.S. carriers when measured by ASMs per fuel gallon consumed. With more than 200 new Airbus planes on order, Frontier will continue to grow to deliver on the mission of providing affordable travel across America. Cautionary Statement Regarding Forward-Looking Statements and Information Certain statements in this release should be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company's current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Words such as "expects," "will," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Actual results could differ materially from these forward-looking statements due to numerous risks and uncertainties relating to the Company's operations and business environment including, without limitation, the following: unfavorable economic and political conditions in the states where the Company operates and globally, including an inflationary environment and potential recession, and the resulting impact on cost inputs and/or consumer demand for air travel; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity; disruptions to the Company's flight operations, including due to factors beyond the Company's control, such as adverse weather events or air traffic controller staffing shortages; the Company's ability to attract and retain qualified personnel at reasonable costs; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel, including as a result of the war between Russia and Ukraine; the Company's reliance on technology and automated systems to operate its business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems; the Company's reliance on third-party service providers and the impact of any failure of these parties to perform as expected, or interruptions in the Company's relationships with these providers or their provision of services; adverse publicity and/or harm to the Company's brand or reputation; reduced travel demand and potential tort liability as a result of an accident, catastrophe or incident involving the Company, its codeshare partners or another airline; terrorist attacks, international hostilities or other security events, or the fear of terrorist attacks ...