(Reuters) – Frontier Group, the parent of budget carrier Frontier Airlines, forecast better-than-expected 2025 profit on Friday, aided by robust travel demand amid an improved pricing environment.
Shares of the ultra-low-cost carrier were up 6.2% in premarket trading after the airline also beat fourth-quarter profit estimates.
After an oversupply of seats last summer led airlines to cut fares and sacrifice margins, the industry has adjusted its capacity to drive up prices, with the holiday month of December witnessing the sharpest increase in airfares in 21 months.
Frontier’s revenue per available seat miles (RASM), a proxy for pricing power, was 10.23 cents in the final quarter of the year, a 15% growth from a year earlier.
It expects an adjusted profit per share of at least $1 in 2025, compared with analysts’ average estimates of 58 cents per share, according to data compiled by LSEG.
“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,” CEO Barry Biffle said.
Frontier reported an adjusted profit of 23 cents per share for the quarter ended Dec. 31, compared with analysts’ estimates of 12 cents per share.
It reported a total operating revenue of $1 billion, compared with Wall Street expectations of $984 million.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Vijay Kishore)
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