Frontier Group Holdings, Inc. (ULCC) Q4 2024 Earnings Summary

Executive Summary

Record quarterly revenue and a cleaner P&L: Q4 revenue reached $1.002B (+12% YoY) with GAAP pre-tax margin 5.1% and net income $54M ($0.23 diluted EPS), aided by disciplined capacity deployment and fuel at $2.48/gal .
Unit revenue inflected strongly: RASM rose 15% YoY to 10.23¢ on lower capacity (-2% YoY) as Frontier focused flying on peak days and matured its base network; total revenue per passenger rose 6% to $117 .
Cost and efficiency: CASM was 9.78¢ (vs 8.93¢ LY) with adjusted CASM ex-fuel SLA 1,000 at 6.95¢ (+21% YoY), reflecting deliberately lower utilization (-15%) and higher airport costs, partly offset by cost-savings; fuel efficiency hit a company record 106 ASMs/gal .
Guidance reset and catalysts: 2025 adjusted diluted EPS guided to at least $1.00; Q1 2025 guided to breakeven to $0.07 on assumed fuel of ~$2.60/gal. Management targets double‑digit adjusted pre‑tax margins in summer 2025; CFO narrowed guidance to EPS, capex and PDP—an investor-friendly simplification. Street consensus (S&P Global) was unavailable to benchmark Q4; however, Q4 pre‑tax margin materially exceeded prior Q4 guidance of 0–2% (given on 10/29/24) .
Stock setup: An analyst noted “good to see the stock up today” on the call; key near-term stock catalysts include the at least $1.00 FY25 EPS target, summer double‑digit margin aspiration, and loyalty/premium initiatives ramping through 2025 .

What Went Well and What Went Wrong

What Went Well

Material unit revenue improvement: RASM +15% YoY to 10.23¢ on reduced capacity and peak-day focus—management said changes “set us on a trajectory for significant year-over-year RASM growth in 2025” .
Operational reliability and efficiency: 99.4% completion factor in December; record fuel efficiency of 106 ASMs/gal supports the “America’s Greenest Airline” positioning .
Strategic revenue levers gaining traction: UpFront Plus achieved >70% sold load factors in Q4; premium first-class product and app/loyalty upgrades expected to bolster mix and engagement in 2025–2026 .

What Went Wrong

Higher non-fuel unit costs: Adjusted CASM ex‑fuel SLA 1,000 rose 21% YoY to 6.95¢ on lower utilization (–15%) and higher airport costs; management argues the trade‑off improved margins by avoiding money‑losing off‑peak flying .
Load factor remains pressured by day‑of‑week dynamics: Flown LF was ~78% amid structurally weaker Tue/Wed/Sat demand; management is concentrating capacity on peak days until mid‑week demand normalizes .
Estimates benchmarking unavailable: S&P Global consensus (EPS/revenue) could not be retrieved in this session, limiting beat/miss assessment vs Street; however, ULCC clearly beat its own prior Q4 pre‑tax margin guidance (0–2% guided vs 5.1% actual) .

Financial Results

Income Statement and Unit Economics

Metric	Q4 2023	Q3 2024	Q4 2024
Total Operating Revenues ($B)	$0.891	$0.935	$1.002
Pre-tax Income ($M)	$6	$27	$51
Pre-tax Margin (%)	0.7%	2.9%	5.1%
Net Income ($M)	$(37)	$26	$54
Diluted EPS ($)	$(0.17)	$0.11	$0.23
RASM (¢)	8.90	9.28	10.23
CASM (¢)	8.93	9.10	9.78
Adj. CASM ex‑fuel, SLA 1,000 (¢)	5.76	6.37	6.95

Notes: SLA=Stage Length Adjusted to 1,000 miles.

Revenue Mix

Metric	Q4 2023	Q3 2024	Q4 2024
Passenger Revenue ($M)	$872	$910	$978
Other Revenue ($M)	$19	$25	$24
Total Operating Revenues ($M)	$891	$935	$1,002

KPIs and Operating Stats

KPI	Q4 2023	Q3 2024	Q4 2024
ASMs (millions)	10,013	10,075	9,798
RPMs (millions)	7,817	7,855	7,668
Load Factor (%)	78.1%	78.0%	78.3%
Avg Stage Length (miles)	952	856	874
Avg Daily Utilization (hours)	11.3	10.2	9.6
Fuel Cost per Gallon ($)	3.18	2.67	2.48
Fuel Gallons (thousands)	95,181	97,767	92,330
Passengers (thousands)	8,099	8,834	8,558
ASMs per Gallon	—	103	106

Non-GAAP and reconciliations provided in press release/8‑K .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted (non‑GAAP) diluted EPS	Q1 2025	N/A	Breakeven to $0.07	New
Adjusted (non‑GAAP) diluted EPS	FY 2025	N/A	At least $1.00	New
Fuel assumption ($/gal)	Q1 2025	N/A	~$2.60	New
Fuel assumption ($/gal)	FY 2025	N/A	~$2.55	New
Weighted avg diluted shares	Q1/FY 2025	N/A	~230M	New
Pre‑delivery deposits (net, $M)	FY 2025	N/A	$10–$45	New
Other capex ($M, incl. heavy maintenance)	FY 2025	N/A	$175–$235	New
Adjusted pre‑tax margin	Q4 2024	0–2% (10/29/24 guide)	Actual 5.1%	Raised vs guide (actual beat)
Adj. CASM ex‑fuel, SLA 1,000 (YoY)	FY 2024	~–1% (guide)	–1.2% actual	Slightly better than guide

Management narrowed guidance to EPS, PDP and capex for 2025 to “align expectations with our focus on delivering bottom line results” .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Network simplification & capacity discipline	Shift toward peak days; decelerating growth; expect RASM to inflect positive in 4Q	Peak-day focus drove +15% YoY RASM; capacity down 2% YoY; bases maturing	Improving
Premium product & loyalty	Launched “The New Frontier,” removed many fees, added bundles; set up premium seating/loyalty rev	UpFront Plus >70% sold LF; first-class in late 2025; app/loyalty upgrades; co-brand acquisition +35% and spend +11% YoY in 4Q	Expanding
Cost advantage	>$100M run-rate savings; adjusted CASM ex‑fuel SLA down in Q3	48% cost advantage vs industry in 2024; plan >40% in 2025; record fuel efficiency	Stable/strong
Demand & day-of-week mix	Post‑pandemic pattern hurting Tue/Wed; focusing on peaks	Tue/Wed still weak; LF to improve with shaping; Easter drags Q1 by ~1–2 pts	Mixed but manageable
Macro/ATC/regulatory	Weather/hurricane impacts in Q3	ATC staffing reform could add efficiency; potential age extension discussed	Watch policy
Legal settlement	$40M settlement; $38M non‑recurring credit in Q3	Non‑recurring item behind; liquidity aided	One‑time, done

Management Commentary

“Our revenue and network initiatives contributed to record fourth quarter revenue, setting us on a trajectory for significant year-over-year RASM growth in 2025 which underpins our target of achieving double-digit adjusted pre-tax margins in the summer of 2025.” — Barry Biffle, CEO .
“We made the decision this quarter to narrow our guidance metrics to EPS, CapEx and PDP in order to more closely align expectations with our focus on delivering bottom line results.” — Mark Mitchell, CFO .
“UpFront Plus…achieved over 70% sold load factors in the fourth quarter…customers…are willing to pay for a new product and we’re excited to deliver it.” — Barry Biffle, CEO .
“Co‑brand card acquisitions are up 35% and spend per cardholder increased 11% year over year in fourth quarter…Loyalty remains a significant financial opportunity.” — Bobby Schroeter, CCO .

Q&A Highlights

Revenue trajectory and drivers: Management expects seasonality plus maturing network and revenue initiatives to bridge to double‑digit margins by summer; emphasized clear revenue tailwinds from the 2024 network reset .
Premium traction: UpFront Plus sold >70% in Q4; first-class rollout late 2025 should be accretive given Frontier’s lower cost to deliver premium .
Capacity flexibility: Frontier will keep first‑half growth minimal, dynamically adjust second‑half depending on RASM; focus remains on peak days (Thu/Fri/Sun/Mon) .
Easter/calendar effects: Q1 margin hit of ~1–2 pts from Easter timing; stronger March expected; net positive for 1H when including Q2 .
Taxes/NOLs: ~$19M valuation allowance remaining; additional ~$30M cash tax opportunity—NOL benefits expected to be utilized in 2025 but not multi‑year .
ATC reform: Extending controller retirement age and modernization could cut 18–22 minutes per flight in studies, improving utilization and customer experience .
Spirit combination: CEO reiterated proposal offers more value than Spirit’s standalone plan; focus of this call remained on results/guidance .

Estimates Context

We attempted to retrieve S&P Global (Capital IQ) consensus for Q4 2024 EPS, revenue, and EBITDA, but the request was not fulfilled in this session due to a provider rate limit. As a result, we cannot quantify beat/miss versus Street for Q4 2024 in this report (S&P Global consensus unavailable at time of analysis).
However, versus company-issued Q4 guidance (10/29/24), pre‑tax margin materially outperformed: guided 0–2% vs actual 5.1% in Q4 2024, indicating a significant internal “beat” on profitability drivers .

Key Takeaways for Investors

Frontier delivered record quarterly revenue and a 5.1% pre‑tax margin amid deliberate capacity discipline—evidence its network/merchandising reset is working and should continue to aid 2025 unit revenue expansion .
The 2025 setup is attractive: adjusted diluted EPS guided to at least $1.00, with management aiming for double‑digit adjusted pre‑tax margins in summer—watch for sustained RASM strength and continued off‑peak capacity restraint as confirms .
Premium and loyalty levers are real and early-stage: >70% sold LF for UpFront Plus, first-class product late 2025, and stronger co‑brand engagement; these should diversify revenue and lift mix over time .
Cost leadership remains a core edge (48% cost advantage vs industry in 2024) alongside best‑in‑class fuel efficiency; management reiterates >40% advantage in 2025 even with potential labor progress .
Near‑term risks: non‑fuel unit cost inflation from lower utilization and airport costs, calendar headwinds (Easter), and mid‑week demand softness; Frontier is mitigating via peak‑day concentration and capacity flexibility .
Liquidity is solid ($935M; ~25% of TTM revenue), with sale‑leaseback financing in place for planned near‑term deliveries—supports execution through 2025 .
Trading lens: Absent Street estimates this quarter, the internal beat versus prior Q4 margin guidance plus FY25 EPS “at least $1” are the headline catalysts; monitor monthly bookings for evidence of sustained RASM strength and the cadence of loyalty/premium monetization .