Frontier Group Holdings, Inc. (ULCC) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 missed Street on revenue and EPS; total revenue was $929M vs $942M consensus and diluted EPS was $(0.31) vs $(0.28) consensus, pressured by April demand disruption and heavy ATC/weather in late May–June . Revenue miss ~$13M and EPS miss ~$0.03*.
Unit revenue was soft on a reported basis (RASM 9.01¢, down 2% YoY) but slightly up on a stage-adjusted basis; load factor improved to 79.3% (+1.2 pts YoY) as the network shifted away from off-peak days .
Costs rose on lower utilization and fewer sale-leaseback gains: CASM 9.73¢ (+8% YoY) and CASM ex-fuel 7.50¢ (+20% YoY), driving a net loss of $70M and pre-tax margin of (7.5)% .
Q3 2025 guidance: adjusted loss per share $(0.26)–$(0.42); capacity down 4–5% YoY; higher fuel assumed ($2.51/gal); management cites sequentially better competitive capacity and mid-to-high single-digit stage-adjusted RASM growth as catalysts into 2H and 2026 .
Management sees improving forward yields since mid-July and expects stage-adjusted RASM up mid-to-high single digits in Q3; cites loyalty/premiumization traction (cardholder spend up ~20% YoY) and greater competitor capacity reductions in Frontier markets as key drivers .

What Went Well and What Went Wrong

What Went Well
- Stage-adjusted RASM ticked up slightly YoY despite demand/operational headwinds; management expects mid-to-high single-digit stage-adjusted RASM growth in Q3 .
- Loyalty/premium initiatives gaining traction: co-brand/loyalty revenue per passenger up >40% YoY in Q2; cardholder spend up nearly 20% YoY; new first-class seating and expanded UpFront Plus expected to add revenue mix .
- Fleet/efficiency advantage deepening: 84% of fleet A320neo family, ASMs per gallon 106 (+2% YoY), and agreement to power 91 A321neo orders with PW1100GTF engines to extend efficiency lead .
What Went Wrong
- Revenue and EPS below consensus: $929M vs $942M; $(0.31) vs $(0.28)*; April demand disruption and ATC/weather in May–June weighed on Q2 .
- Unit costs elevated: CASM 9.73¢ (+8% YoY) and CASM ex-fuel 7.50¢ (+20% YoY), driven by 13% lower daily utilization, fleet growth and lower sale-leaseback gains .
- EBITDA inflected negative as revenue softness and higher unit costs outpaced fuel benefit; management recorded an EBITDA loss in Q2 .

Financial Results

P&L summary (chronological: oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Total operating revenues ($M)	$1,002	$912	$929
Pre-tax margin (%)	5.1%	(4.4)%	(7.5)%
Net income (loss) ($M)	$54	$(43)	$(70)
Diluted EPS ($)	$0.23	$(0.19)	$(0.31)

YoY comparison (Q2 over Q2)

Metric	Q2 2024	Q2 2025
Total operating revenues ($M)	$973	$929
Net income (loss) ($M)	$31	$(70)
Diluted EPS ($)	$0.14	$(0.31)
Pre-tax margin (%)	3.3%	(7.5)%

Unit economics and KPIs (chronological: oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
RASM (¢)	10.23	9.17	9.01
CASM (¢)	9.78	9.63	9.73
CASM ex-fuel (¢)	7.44	7.24	7.50
Load factor (%)	78.3%	74.9%	79.3%
Fuel cost per gallon ($)	2.48	2.55	2.36
ASMs per gallon	106	107	106
Total liquidity ($M)	$935	$889	$766

Operating statistics (chronological: oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
ASMs (millions)	9,798	9,949	10,313
Passengers (000s)	8,558	7,839	8,499
Avg stage length (miles)	874	925	942
Avg daily utilization (hours)	9.6	9.7	9.7

Estimates vs Actuals (Q2 2025)

Metric	Actual	Consensus	Beat/Miss
Revenue ($M)	$929	$942.4*	Miss
Diluted EPS ($)	$(0.31)	$(0.279)*	Miss
EBITDA ($M)	$(54) (company-reported)	$127.0*	Miss

*Values retrieved from S&P Global.

Context and drivers:

Revenue declined 5% YoY on 2% lower capacity, reflecting April demand disruption and significant ATC/weather delays; stage-adjusted RASM modestly up YoY .
CASM ex-fuel rose 20% YoY as 13% lower daily utilization, fleet growth and fewer sale-leaseback gains outweighed fuel tailwinds; fuel price fell to $2.36/gal .
Net loss of $70M reflects reported GAAP and adjusted (no non-GAAP pre-tax adjustments in Q2) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted diluted EPS (loss/share)	Q2 2025	$(0.23) to $(0.37) (guided May 1)	Actual $(0.31)	In line with range
Adjusted diluted EPS (loss/share)	Q3 2025	—	$(0.26) to $(0.42)	New (loss)
Capacity (YoY)	Q3 2025	—	Down 4% to 5%	New
Fuel cost assumption ($/gal)	Q3 2025	$2.38 (Q2 guide ref curve)	$2.51 (Q3), $2.41 (Q4)	Higher vs prior curve
Tax expense (guidance)	Q3 2025	$2–$5M (Q2 guide)	$2–$4M (valuation allowance)	Narrowed
Weighted avg shares (guidance)	Q3 2025	228M (Q2 guide)	228M	Maintained
Avg stage length (miles)	Q3 2025	—	~915 (call)	New disclosure

Notes: Guidance framed on stage-adjusted RASM up mid-to-high single digits in Q3 and continued capacity realignment toward peak days; higher fuel vs Q2 also embedded .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Supply/demand and capacity	Q4: disciplined capacity; record RASM on 2% lower capacity . Q1: reduced off-peak capacity; targeting 2H profitability; industry moderation supportive .	Greater competitor capacity cuts in Frontier markets (~3 pts); Frontier down Tue/Wed capacity; Q3 capacity down 4–5% .	Improving backdrop / tighter supply
Pricing/RASM	Q4: RASM +15% YoY . Q1: RASM ~flat; premium bundles gaining traction .	Reported RASM −2% YoY; stage-adjusted slightly up; forward yields up double-digits since mid-July; Q3 SLA RASM mid–high single-digit growth expected .	Improving into 2H
Loyalty/premiumization	Q1: UpFront Plus, free changes in Economy bundle; loyalty enhancements; digital/app upgrades .	Co-brand/loyalty revenue per pax +40% YoY; card spend +~20% YoY; first-class seating fleetwide by next spring; more UpFront Plus rows .	Strengthening
Digital/NDC	Q1: New apps and website planned; NDC in progress .	New iOS/Android apps launched; NDC deals (Amadeus, Fareportal, Hopper) to reduce distribution costs and enable personalization .	Executing
Fleet/engines	Q4: 82% neo; six A321neo deliveries; record fuel efficiency . Q1: added 4 A321neo; 163 aircraft .	164 aircraft; 84% neo; 3 A321neo delivered; P&W PW1100GTF selected for 91 A321neo orders .	Scale + efficiency ramp
Macro/ops	Q1: March demand shock; plan reductions .	April demand disruption; ATC/weather hit late May–June; improving forward bookings since mid-July .	Stabilizing

Management Commentary

“Our second quarter results were within our guidance range, overcoming significant weather and extensive air traffic control delays in late May and June.” (Barry Biffle, CEO) .
“We’re seeing an improvement to our forward bookings for August and beyond… expected to support mid to high single digit RASM growth in the third quarter on a stage adjusted basis.” (Biffle) .
“Co‑brand loyalty revenue per passenger [was] up over 40% YoY… cardholder spend is up nearly 20% year over year.” (Schroeter/Biffle) .
“CASM ex‑fuel increased… mainly due to a 13% reduction in average daily aircraft utilization… fleet growth and lower sale-leaseback gains.” (Mitchell, CFO) .
“We are going to match capacity to demand… flying maximum on the peak days and on the off peak days, less.” (Biffle) .

Q&A Highlights

Path to profitability: Management cited improving demand trends (forward sales up double digits since mid‑July) and multiple RASM levers (capacity right‑sizing, less immature markets, loyalty/premium seats) to drive a return to profitability in 2026, with 2H 2025 improvements expected if trends hold .
Utilization and CASM ex-fuel: Off-peak reductions create transition costs and lower utilization near-term; 11 aircraft inductions planned in Q4 weighted to A320neo; expect to dial in optimal Tue/Wed flying over next quarters .
Yield vs load factor: Current upswing led by yields (September forward yields +~15% YoY per management), with load factors also improving to high 80s/low 90s on peak days .
Guidance range width: Wider Q3 loss range reflects still‑to‑be‑sold September demand; if current yield gains persist, results could skew to the higher end of guidance .
Financing: Sale‑leaseback market remains supportive; Frontier maintains committed financing through 2026 3Q deliveries and can pivot to debt if needed; expects lowest per‑seat ownership costs regardless of financing path .

Estimates Context

Q2 2025 vs S&P Global consensus: Revenue $929M vs $942.4M (miss ~$13M); EPS $(0.31) vs $(0.279) (miss ~$0.03); EBITDA $(54)M (company) vs $127.0M consensus (significant miss)* .
Drivers of miss: April demand shock and late‑quarter ATC/weather disruptions pressured revenue; CASM ex‑fuel inflated by lower utilization and fewer sale‑leaseback gains .
Forward implications: Management expects stage‑adjusted RASM up mid‑to‑high single digits in Q3 and improving competitive capacity environment; estimates may need downward adjustment for cost trajectory near‑term but RASM revisions could trend higher if yield strength persists into fall .