Frontier Airlines stated that it has been disproportionately impacted by softening travel demand, as the carriers strong focus on domestic leisure travel left it more exposed to a broader slowdown caused by macroeconomic uncertainty.
As a result, Frontier signalled that it expects capacity to be down low single digits in the second quarter of the year, with a similar reduction in the second half, based on current conditions. In addition, the airline said that it is now targeting profitability in the second half of the year, based on a stabilised demand outlook.
Frontier withdrew its full year forecast in April, with the Denver-based low-cost carrier being one of the first US carriers to announce that it would dropping its annual forecast, again citing the current economic environment.
“As we experienced changes in the demand environment, particularly in March, we reassessed our capacity deployment from May forward with the resultant reduction focused on Tuesdays, Wednesdays, and Saturdays,” said Jimmy Dempsey, Frontier's president, on the company’s first quarter earnings call.
Dempsey noted that the airline’s expectation is that this adjustment in capacity will continue for the remainder of this 2025, such that off-peak flying in summer will now be approximately half of peak day flying, with schedules for the second half now being changed.
These capacity reductions are expected to reduce costs and capital expenditures by over $300 million.
Frontier noted that its revenue per available seat mile (RASM) rose 19% during January, when compared to the same month of the previous year, signalling strong momentum at the start of the quarter. “We were on a roll,” said Barry Biffle, Frontier CEO, adding that he sees no fundamental issues with its business model or competitive position.
"First quarter results reflect softer travel demand primarily during March, with current booking trends suggesting demand for May and early summer travel has now stabilized," commented Biffle. “We are targeting a return to profitability in the second half of the year supported by moderating industry capacity, the leverage from our commercial investments and continued close management of the elements of the business we can control, including capacity optimization and aggressive cost and capital expenditure management.”
During the first quarter of the year, Frontier’s total operating revenue increased 5% versus the same quarter of the year prior to $912 million on 5% higher capacity, this in line with predictions made by the airline in April.
RASM was $0.0917 cents, roughly in line with the prior year quarter, and total revenue per passenger was $116, down 6%.
The airline reported a net loss of $43 million for the three months ending March 31, 2025, compared with a net loss of $26 million in the same period a year prior. On an adjusted basis, the net loss was also $43 million, versus $21 million a year ago.
The company reported a pre-tax loss of $40 million, widening from $24 million in the prior-year quarter, with the pre-tax margin declining to -4.4% from -2.8%.
Diluted loss per share was $0.19, compared to $0.12 a year earlier and $0.09 on an adjusted basis.
Frontier generated 107 ASMs per gallon during the quarter, just above a 1% fuel efficiency improvement over the same quarter of 2024. Adjusted non-fuel operating expenses were $720 million, or $0.0724 per available seat mile, 8% higher than the previous year. The airline cited lower average daily aircraft utilisation, an increase in station costs, fleet growth, and lower sale leaseback gains from two fewer aircraft deliveries.
Partially offsetting these impacts was a lease return benefit from extending 14 aircraft leases previously due in 2026–2027. During the quarter, Frontier added four A321neo aircraft and two spare engines to its portfolio, bringing its total fleet to 163. In the second quarter, the carrier said it expects to receive three A321neos - one fewer than planned - all backed by sale-leaseback agreements.
When asked about the mechanics of paying tariffs on these sale-leaseback transactions, Biffle stated that the airline has “no plans” to pay tariffs.
Frontier currently expects another 13 aircraft deliveries in the second half of the year, all of which also have committed sale leaseback financing, along with approximately 40% of 2026 deliveries.