Frontier Airlines Announces a 71% Year-on-Year Increase in Air Ticket Prices for the Third Quarter; America's Largest Low-Cost Airline Attempts to Pass on the Even Higher Rise in Jet Fuel Costs to Passengers.
The ticket revenue for Frontier averaged $67.82 per passenger in the third quarter, compared to $39.74 in the same period last year. If various fees charged by this low-cost airline, such as for checked baggage and carry-on luggage, are taken into account, the total revenue per passenger increased by 30% year-over-year to $138.22.
Despite the higher prices, customers continue to make reservations. The company stated that the number of passengers in the third quarter increased by 18%, exceeding 9.8 million, which is 1.5 million more than in the same period last year.
The company stated that even at these higher prices, demand remains strong, yet Frontier is still incurring losses. The airline's losses in the third quarter increased to $104 million, compared to $77 million in the same period last year. Its fuel expenses soared by 82% to $425 million.
Frontier expects to achieve adjusted profits in the fourth quarter, stating that it anticipates an adjusted loss of 15 cents per share to an adjusted profit of 5 cents per share.
From Delta Air Lines to many other airlines including Frontier, they have stated that despite higher ticket prices, most customers continue to book flights. However, record-high jet fuel costs—which are the largest expense after labor costs—are eroding profits.
On Wednesday morning, the stock price of Frontier rose by about 6%.
Before Spirit Airlines collapsed in May, Frontier had already surpassed it to become the largest discount airline in the United States.
