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Thursday, 07/28/2022 11:41:42 AM

Thursday, July 28, 2022 11:41:42 AM

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Frontier Airlines Poised for Significant Growth as America’s Ultra-Low Cost Carrier

Frontier Airlines, Inc.
Wed, July 27, 2022 at 2:07 PM·13 min read

https://finance.yahoo.com/news/frontier-airlines-poised-significant-growth-200700592.html

DENVER, July 27, 2022 (GLOBE NEWSWIRE) -- Frontier Group Holdings, Inc. (“Frontier”) (NASDAQ: ULCC), parent company of Frontier Airlines, Inc., highlighted its strong foundation and the significant growth opportunities ahead as a standalone company. In addition, the Company announced an unprecedented deal for customers, offering one million passenger seats from $19.00*.

William A. Franke, the Chair of Frontier’s Board of Directors and the managing partner of Indigo Partners, Frontier’s majority shareholder, commented, “While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier Board took a disciplined approach throughout the course of its negotiations with Spirit. We were focused on offering the appropriate value for Spirit, while prioritizing consumers and the best interests of Frontier, our employees and shareholders. As we enter our next chapter, Frontier remains well-positioned to deliver significant value to our shareholders as we serve the growing demand for affordable air travel.”

“As we continue to see a rebound in leisure travel, we have never been more confident in our strategy and prospects than we are today,” said Barry Biffle, President and CEO of Frontier. “Frontier remains America’s lowest-fare, lowest-cost airline that features the industry’s youngest, most fuel-efficient fleet, a robust order book, and a strong balance sheet. With the price-sensitive segment projected to grow, we are just getting started. In fact, today we are announcing a blockbuster sale – offering one million seats from $19.00*, underscoring our commitment to delivering Low Fares Done Right. No one is as cheap as Frontier. Looking ahead, we’ll continue to expand capacity and add new routes as America’s ultra-low-cost airline, and we look forward to creating new jobs and welcoming future employees to Team Frontier.”

Frontier has a strong foundation and clear plan to drive long-term value:

Gaining share in the growing leisure segment: As an ultra-low-cost leader, Frontier is well-positioned to capitalize on leisure demand as it returns and continues to build. As compared to Frontier’s ultra-low unit cost structure, 90% of the U.S. airline industry capacity is provided by airlines burdened by a greater than 35% higher unit cost, while over half of the U.S. industry capacity has more than 70% higher unit cost than Frontier1. With JetBlue seeking to convert Spirit Airlines into a high-cost airline, Frontier will be unmatched as the ultra-low cost leader. As Frontier continues to expand, it will focus on outperforming other airlines with industry-leading unit costs, profit per plane and cash generation.


Delivering the lowest fares and lowest costs in America: Frontier will continue to be America’s lowest-fare, lowest-cost airline. In 2019, Frontier offered the lowest average fare per domestic journey of $54 compared to legacy airlines average fare of $202. As announced today, Frontier also plans to sell one million passenger seats from $19.00*, underscoring its commitment to providing ultra-low fares to consumers. In addition to the lowest fares, Frontier features the lowest cost structure in the U.S. with adjusted CASM + net interest of $7.84 in 2019. Frontier’s long-standing focus on leisure travel requires no change in fare levels to achieve profitability as leisure travel fully returns following the pandemic, and Frontier’s fares will be even more attractive following a JetBlue acquisition of Spirit, which would eliminate a large ULCC carrier.


Expanding America’s youngest, most modern fleet: Frontier flies the youngest, most modern and fuel-efficient fleet of any US carrier, and has among the largest A320neo family fleet of any airline in the country. From a fleet of more than 100 aircraft today, Frontier has a robust order book of 244 aircraft to support its continued growth. With an average fleet age of four years, Frontier burns less fuel than any of the Big Four airlines, which saves its customers money and reduces the Company’s carbon footprint.2


Offering more sustainable and more affordable air travel: Frontier will continue to be America’s Greenest Airline and set the industry standard for fuel-efficiency. Through more fuel-efficient technology, lean & green seats, flying lighter and inflight changes, Frontier is 43% more fuel-efficient than other U.S. airlines. In 2021, this resulted in approximately $245 million of fuel savings and an industry-leading 101 available seat miles per gallon compared to an industry average of 71 available seat miles per gallon.3 Further, Frontier is committed to innovating to push its high environmental standards even higher. This includes the introduction of lightweight RECARO seats, which result in a 30% reduction in weight to lower the environmental impact of every flight. Our commitment to flying green goes hand in hand with our primary mission to provide customers with unmatched low fares.


Providing greater stability for employees: Frontier is committed to retaining and expanding its workforce and will continue to expand capacity and add new routes as a standalone airline, creating additional jobs across the Company. Frontier has the best team in the industry and is focused on expanding opportunities for Team Frontier and future employees.


Maintaining a strong balance sheet and significant cash generation: Although a merger with Spirit offered a unique opportunity to create a scaled ultra-low-cost competitor to the Big Four and JetBlue, Frontier’s strong balance sheet creates a catalyst for future growth. Through a prudent capital allocation strategy during the pandemic, Frontier has emerged with a solid cash and liquidity position. Frontier will continue to focus on delivering profitability and generating cash, while maintaining the financial flexibility to capitalize on near- and long-term growth opportunities, including expanding the company’s fleet, its team and its network.

The proven and resilient ultra-low-cost model continues to provide the foundation for Frontier’s growth strategy and for long-term shareholder value creation. Even amid rising fuel prices, Frontier continues to keep costs and fares low while generating record revenues and providing reliable service – with one of the highest completion rates in the industry during this year’s summer travel season. The Company’s recent performance further validates the financial performance of the ultra-low-cost model. With demand levels increasing as pandemic-related restrictions abate, Frontier is well positioned to grow rapidly and profitably and deliver for customers, employees and other stakeholders. Frontier looks forward to sharing more details about the significant opportunities ahead as a standalone company during its upcoming second quarter earnings announcement.

Second Quarter 2022 Financial Results
The Company announced that it will now be releasing second quarter 2022 financial results after market close today, Wednesday, July 27, 2022.

Management will host a live webcast with analysts to discuss these results today at 4:30pm ET. The webcast will be available to the public on a listen-only basis. To register in advance to access the webcast, visit http://ir.flyfrontier.com.

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