Frontier Group Holdings, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total operating revenue for Q3 2026 reached $1.355 billion, a 53% increase year-over-year compared to $886 million in Q3 2025.
• Year-to-date (nine months ended September 30, 2026) total operating revenue was $3.626 billion, up 33% from $2.727 billion in the prior year period.
• Revenue per available seat mile (RASM) increased 30% to 11.87 cents in Q3 2026 from 9.14 cents in Q3 2025; year-to-date RASM was 11.22 cents versus 9.10 cents.
• GAAP net loss for Q3 2026 was $104 million ($0.45 per diluted share), compared to a $77 million loss ($0.34 per share) in Q3 2025.
• Adjusted (non-GAAP) net income for Q3 2026 was $40 million ($0.18 per diluted share), compared to a $77 million loss in Q3 2025.
• Year-to-date adjusted net loss was $50 million ($0.22 per share), compared to a $190 million loss in the prior year.
• Adjusted operating expenses for Q3 2026 were $1.321 billion (11.56 cents per ASM), compared to $963 million in Q3 2025.
• Adjusted operating expenses excluding fuel for Q3 2026 were $896 million (7.40 cents per ASM, stage-adjusted to 1,000 miles).
• Fuel expense in Q3 2026 was $425 million at an average cost of $3.96 per gallon, a 56% increase from $2.54 per gallon in Q3 2025.
• Total liquidity ended Q3 2026 at $1.18 billion.

Guidance and Future Outlook:

• Q4 2026 adjusted diluted earnings per share is estimated between $(0.15) and $0.05.
• Q4 2026 capacity growth is expected to increase 5% to 6% compared to Q4 2025.
• Q4 2026 RASM is forecast to be up over 20% compared to the corresponding 2025 quarter.
• Q4 2026 average fuel cost is estimated at $4.75 per gallon.
• Full-year 2026 pre-delivery deposits are estimated between $(170) million and $(195) million.
• Full-year 2026 other capital expenditures are estimated between $170 million and $195 million.

Business Segments and Product Lines:

• The airline operates a fleet of 164 Airbus single-aisle aircraft as of September 30, 2026.
• Fleet composition includes 68 A320neo, 69 A321neo, 6 A320ceo, and 21 A321ceo aircraft.
• The company executed agreements to early return 13 A320neo leases in the second half of 2026.
• Capacity will be replaced by the direct lease of 10 A321neo aircraft, with five scheduled for delivery in Q4 2026 and the remaining five in Q1 2027.
• Frontier took delivery of one A320neo and three A321neo aircraft during Q3 2026.
• The company reported 107 available seat miles (ASMs) per gallon in Q3 2026, representing a fuel efficiency advantage of over 40% compared to major U.S. carriers.
• Average stage length in Q3 2026 was 891 miles.
• Flown load factor in Q3 2026 was 79%.

Market and Competitive Landscape:

• Strong travel demand drove record revenue and RASM growth significantly above guidance.
• The company maintains a cost discipline strategy despite elevated fuel prices.
• The airline positions itself as "America's Greenest Airline" due to its fuel efficiency metrics.

Risks and Challenges:

• Elevated fuel prices remain a significant cost headwind, with Q3 fuel costs 56% higher than the prior year.
• Forward guidance is subject to risks including volatile fuel prices, unfavorable economic conditions, inflation, and potential recession.
• Operational risks include disruptions from weather, air traffic controller staffing shortages, and infrastructure constraints.
• The company faces risks related to labor disputes, union negotiations, and employee retention.
• Reliance on a single aircraft supplier (Airbus) and two engine suppliers presents supply chain risks.
• Regulatory risks include environmental regulations, climate change compliance, and government oversight.

Management Commentary and Tone:

• CEO Jimmy Dempsey stated that revenue execution in a higher-than-expected fuel environment resulted in an adjusted profit meaningfully above guidance and Wall Street estimates.
• Management expressed confidence in translating current momentum into sustainable profitability, citing the successful progression of strategic initiatives.
• The tone emphasized strong demand, continued execution of commercial strategy, and maintained cost discipline.

Other Key Points:

• Non-GAAP adjustments in Q3 2026 included $134 million for a Second Early Return Agreement, $6 million for Collective Bargaining Contract Ratification, and $3 million for the Early Return Agreement.
• A $73 million TSA Reserve charge related to unused travel remittance was recorded in the nine-month period ended September 30, 2026.
• The company has a fleet of 164 aircraft, all financed through operating leases expiring between 2026 and 2038.
• Full-time equivalent employees stood at 8,187.
• The company hosts a conference call to discuss results, available via webcast on its investor relations website.