Frontier Group Holdings, Inc. · NASDAQ:ULCC
Frontier — Bank of America Transportation, Airlines and Industrials Conference 2023
22 slides from Frontier's conference presentation, May 18, 2023
Slide 1: Bank of America Transportation, Airlines and Industrials Conference
Bank of America Transportation, Airlines and Industrials Conference DANIEL SHURZ, SVP, COMMERCIAL MAY 18, 2023
Slide 2: Disclaimer
Disclaimer This presentation (including the accompanying oral presentation) is being delivered on behalf of Frontier Group Holdings, Inc. ("Frontier") ("we", "our", "us", or the "Company"). Before you invest, you should read the documents that the Company has filed with the Securities and Exchange C
Slide 3: Disclaimer
Disclaimer Cautionary Statement Regarding Forward-Looking Statements and Information (continued) Actual results could differ materially from these forward-looking statements due to numerous risks and uncertainties relating to the Company's operations and business environment including, without limit
Slide 4: Frontier: Best Positioned for Profits and Growth
Frontier: Best Positioned for Profits and Growth ❑ Best growth rates ❑ Best relative RASM performance ❑ Global ancillary leader and growing ❑ Lowest total unit costs and getting better ❑ Adjusted pre-tax margin growth building to pre-pandemic levels ❑ Resilient business model ❑ Smart, aggressive and
Slide 5: Compared to Q1-2019, Frontier Has Grown More Than Any Other Carrier
Compared to Q1-2019, Frontier Has Grown More Than Any Other Carrier Q1-2023 vs. Q1-2019 ASMs 41% 34% 20% 9% 1% 1% 0% 0% -2% -3% SAVE ALGT JBLU HA ALK LUV UAL DAL AAL 5
Slide 6: Capacity in New Routes Moderating
Capacity in New Routes Moderating Share of ASMs in markets less than 12-months old 20% 18% 16% 14% 12% 10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2022 2022 2022 2023 2023E 2023E 2023E Note: based on internal data 6
Slide 7: Top-tier Revenue Growth vs 2019
Top-tier Revenue Growth vs 2019 Q1-2019 vs. Q1-2023 Total Revenue (millions) $848 $547 Q1-2019 Q1-2023 7
Slide 8: Frontier's Combination of Growing Capacity and RASM Leads the Industry
Capacity Growth vs RASM Growth vs Total Revenue Growth TTM ending 1Q23 vs FY19 Bubble size represents total revenue growth RASM Frontier’s 24% SAVE Combination of 19% Growing Revenue per 14% ALGT capacity and RASM Available Seat Mile 9% (“RASM”) and Capacity 4% JBLU Capacity Growth (1%) 14% 16% 18%
Slide 9: Frontier's Ancillary Revenue Outperforms Peers, and We're Only Getting Better
Frontier’s Ancillary Revenue Outperforms Peers, and We’re Only Getting Better Global ancillary revenue leader (per passenger) (1),(2) Targeting growth through product innovation $82 $100 $71 $73 $85 $82 $39 $41 $27 $24 $57 Ryanair Easyjet Wizz Volaris Spirit Allegiant FY 2019 Q4-2022 Q4-2023 Goal 20
Slide 10: Post-pandemic Demand Trends Favor the Peaks
Post-pandemic Demand Trends Favor the Peaks The gap between peak and off-peak RASM has grown considerably Pre-pandemic peak vs off-peak RASM Post-pandemic peak vs off-peak RASM RASM SLA 1,000 (cents) RASM SLA 1,000 (cents) Post Labor Day 2018 – Pre-President’s Day 2019 excl. 2H Nov/Dec Post Labor Da
Slide 11: Exploiting Demand by Aligning Capacity on Peak Days
Exploiting Demand by Aligning Capacity on Peak Days While leisure travel demand is increasing, we see an outsized contribution on peak days and peak periods Day-of-week optimization Overview percentage of peak day avg. ASMs ✓ Higher profitability with peak-day flying and reduced 100% underperforming
Slide 12: Even with Lower Midweek Flying, Industry Leading Asset Utilization
Even with Lower Midweek Flying, Industry Leading Asset Utilization Utilization will remain high as we see significant cash-accretive opportunities in all demand seasons Aircraft Utilization Block hours per aircraft per day in 2022 Industry leading target of 11.5 – 12 hours 11.1 10.7 10.2 Peak / 9.9
Slide 13: Frontier's Cost Advantage Widening >$70/Passenger
Frontier’s Cost Advantage Widening >$70/Passenger Pre-pandemic cost advantage1 2022 cost advantage1 Based on Adjusted CASM + net interest, FY 2019 (cents)1 Based on Adjusted CASM + net interest, FY 2022 (cents)1 Stage length adjusted to 1,000 miles Stage length adjusted to 1,000 miles $61 $71 per pa
Slide 14: Momentum Building to Pre-Pandemic Margins
Momentum Building to Pre-Pandemic Margins 1 Adjusted pre-tax margins approaching 2019 levels despite as much as 38% Y/4Y expected capacity growth Adjusted, non-GAAP pre-tax margins 16.2% 13.8% 14.4% 12.4% 10–13% 10–13% 7–10% 5.2% 5.7% 2.8% 1 1 1 Q1-22 Q1-23 Q1-19 Q2-22 Q2-23 Q2-19 Q3-22 Q3-23 Q3-19
Slide 15: Ready for Takeoff!
Ready for Takeoff! Best growth rates Best relative RASM performance Global ancillary leader and growing Lowest total unit costs and getting better Adjusted pre-tax margin growth building to pre-pandemic levels Resilient business model Smart, aggressive and nimble team 15
Slide 16: Q&A Session
Q&A Session 16
Slide 17: Appendix
APPENDIX 17
Slide 18: CASM to Adjusted CASM + Net Interest, Non-GAAP Reconciliation
CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM and Adjusted CASM + Net Interest, Non-GAAP Reconciliation The Company is providing below a reconciliation of GAAP financial information to the non-GAAP financial information provided. The non-GAAP financial information is i
Slide 19: Footnotes to Accompany CASM Non-GAAP Reconciliation
Footnotes to Accompany CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM and Adjusted CASM + Net Interest, Non-GAAP Reconciliation (a) Cost per ASM figures may not recalculate due to rounding. Figures included in this reconciliation were sourced from applicable historical
Slide 20: Footnotes to Accompany CASM Non-GAAP Reconciliation (continued)
Footnotes to Accompany CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM and Adjusted CASM + Net Interest, Non-GAAP Reconciliation (continued) (g) Represents expenses associated with an early out program agreed to in 2019 with the Company's flight attendants, payable throu
Slide 21: Net Income (Loss) to Adjusted Pre-tax Margin, Non-GAAP Reconciliation
Net Income (Loss) to Adjusted Net Income (Loss), Adjusted Pre-tax Income (Loss), and Adjusted Pre-tax Margin, Non-GAAP Reconciliation Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months E
Slide 22: Footnotes to Adjusted Net Income and Pre-tax Margin Reconciliation
Footnotes to Adjusted Net Income (Loss), Adjusted Pre-tax Income (Loss), and Adjusted Pre- tax Margin, Non-GAAP Reconciliation (a) Represents the impact of the change in value and vesting of phantom equity units pursuant to the Pilot Phantom Equity Plan. In accordance with the amended and restated p