Overview
- Frontier, which on Tuesday forecast a second-quarter loss of 45 to 60 cents per share, said the outlook is wider than the 43-cent loss analysts expected.
- Jet fuel, which can be about a quarter of an airline’s costs, is now projected at about $4.25 a gallon in Q2, up from $2.88 in Q1 after Iran-linked Strait of Hormuz disruptions tightened supply.
- Management expects liquidity to end the quarter between $900 million and $950 million and has deferred 69 Airbus deliveries and ended 24 A320neo leases early, resulting in a $139 million Q1 charge.
- Spirit Airlines shut down last week under similar fuel pressure, removing Frontier’s main low-fare rival on many leisure routes and potentially reducing fare competition on overlapping markets.
- Frontier cites offsets, saying it flies 106 available seat miles per gallon and expects revenue per seat mile to rise more than 20% in Q2, which it says could help absorb higher fuel costs.