Frontier Airlines Forecasts Strong 2025 Profit, Boosted by Travel Demand
DENVER (Reuters) -- Frontier Group, the parent of budget airline Frontier Airlines, anticipates surpassing profit expectations for 2025. The projection is driven by resilient travel demand and an advantageous pricing environment.
Frontier's shares surged 6.2% in premarket trading following the release of its fourth-quarter earnings report, which also exceeded analyst estimates.
The airline industry has recently shifted toward capacity reductions to increase fares after an oversupply of seats last summer forced airlines to slash prices. This strategy has yielded results, with December witnessing the steepest airfare increase in 21 months.
Frontier's revenue per available seat miles (RASM), an indicator of pricing power, rose by 15% year-over-year to 10.23 cents in the final quarter. The company projects an adjusted profit per share of at least $1 in 2025, significantly higher than the analyst consensus of 58 cents per share, according to LSEG data.
"Our revenue and network initiatives propelled record fourth-quarter revenue, paving the way for substantial year-over-year RASM growth in 2025. This underpins our objective to attain double-digit adjusted pre-tax margins in summer 2025," said CEO Barry Biffle.
Frontier reported adjusted earnings per share of 23 cents for the quarter ending December 31, exceeding analyst expectations of 12 cents per share. Total operating revenue reached $1 billion, surpassing Wall Street's projection of $984 million.