US carrier Frontier Airlines reported record first quarter 2023 revenue of $848 million but a loss for the period of $13 million.
Revenue was up 40% year-on-year and resulted in a 19% increase in revenue per available seat mile RASM, with capacity 18% higher. Ancillary revenue came to $80 per passenger, $11 more than in 2022.
The RASM increase was driven by a nine percentage-point year-on-year increase in load factor to 82.8% and an 11% increase in revenue per passenger to $124.
The airline reported a pre-tax margin of negative 2%, or and 1.9% on an adjusted basis, as it ended the quarter "in a strong liquidity position", with $790 million unrestricted cash and cash equivalents.
Operating expenses were $873 million, including $1 million in employee retention costs associated with the company's terminated combination with Spirit Airlines and$292 million of fuel expenses at an average cost of $3.45 per gallon.
“Post-pandemic demand has increased due, in part, to work from home arrangements and flexible working schedules. We also see a change in passenger behaviour with outsized demand on peak days and peak periods," said president and chief executive Barry Biffle.
During the period Frontier added six A321neo aircraft to its fleet of 125 aircraft, a move it said increased the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 74%.
The airline claimed itself to be "the most fuel-efficient of all major US carriers" after generating 104 available seat miles (ASM) per gallon during the first three months of 2023, when it launched eight new routes, including five from Phoenix, and announced 22 summer route additions to come.
"We are excited about our planned network revisions and believe it will both reduce our execution risk through slightly lower total utilisation while maximising revenue and profits," Biffle said.