Frontier Group Holdings, Inc. · NASDAQ:ULCC
Frontier — Q4 2023 Earnings Presentation
18 slides from Frontier's earnings presentation, Feb 6, 2024
Slide 1: Fourth quarter & FY2023 Financial Update
Fourth quarter & FY2023 Financial Update February 6, 2024
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: Barry Biffle, Chief Executive Officer
Barry Biffle, Chief Executive Officer
Slide 5: Industry Oversupply in Leisure Markets Negatively Impacting ULCC and LCC RASMs
Industry Oversupply in Leisure Markets Negatively Impacting ULCC and LCC RASMs Industry ASMs FY23 vs FY19 20% Total U.S. domestic ASMs grew 4.4% in 2023 compared to 2019, but LAS and MCO capacity increased ~5x faster over the same period and continues to grow 4.4% Las Vegas & Total U.S. Orlando dome
Slide 6: Frontier Aggressively Pivoting Away from Oversupply
Frontier Aggressively Pivoting Away from Oversupply LAS + LAS + MCO MCO 23% 34% LAS/MCO ASMs expected to decline 11ppt June 2023 June 2024 6
Slide 7: 2024 Network Focused on Higher-fare Markets and Increasing Revenue Pool >50%
2024 Network Focused on Higher-fare Markets and Increasing Revenue Pool >50% Higher Average Industry Total Ticket Fares in Underserved Markets Revenue Pool $89 MM $165 $157 $59 MM Industry Industry Summer Summer Avg Fare Avg Fare 2023 2024E Ticket Revenue Summer Summer 2023 2024E We need a smaller s
Slide 8: Network Simplification Expected to Mitigate Elevated Air Traffic Control Ground-delay Programs
Network Simplification Expected to Mitigate Elevated Air Traffic Control Ground-delay Programs Momentum going into March 2024 schedule, which is at ~2/3rd out-and-back, up from ~1/3rd in Summer 2023 Expansion of crew base footprint - Cleveland, Cincinnati, Chicago (ORD/MDW) and San Juan On track to
Slide 9: Cost Advantage Widening
Cost Advantage Widening 2019 1 2023 1 2024+ 16.01 We expect to maintain or widen our 39% 41% cost advantage relative to the industry Adj. CASM + Net Interest (SLA 1,000)2 LOWER vs LOWER vs • $200 million expected annual run 12.79 rate cost benefit to be implemented industry avg industry avg by the e
Slide 10: Diverse Revenue Initiatives Designed to Drive Significant RASM Growth by 2025
Diverse Revenue Initiatives Designed to Drive Significant RASM Growth by 2025 1 NETWORK Growth is focused on higher-fare VFR-markets Reducing exposure in oversupplied leisure markets Improving reliability and recoverability through network simplification Lower share of much larger revenue pool neede
Slide 11: Network, Revenue and Cost Initiatives Designed to Drive Profitability
Network, Revenue and Cost Initiatives Designed to Drive Profitability GUIDANCE Q1-2024 FY2024 Adj. Pre-tax Adj. Pre-tax Margin1 (non-GAAP) (4) - (7) % Margin1 (non-GAAP) 3 - 6% Capacity Growth (y/y) 5-7% Capacity Growth (y/y) 12 - 15 % Fuel Cost (per gallon)2 $2.85 - $2.95 Fuel Cost (per gallon)2 $2
Slide 12: Full-year 2025 Target
Full-year 2025 Target FY2025 TARGET Based on the current operating environment, we are targeting margin expansion in 2025 as we realize a full year of benefits from 10 - 14 % network, revenue and cost initiatives Adj. Pre-tax Margin1 (non-GAAP) 1 Adjusted pre-tax margin excludes, among other things,
Slide 13: Jimmy Dempsey, President
=RONTIER Jimmy Dempsey, President
Slide 14: Mark Mitchell, SVP & CFO
=RONTIER Mark Mitchell, SVP & CFO
Slide 15: Analyst Q&A
=RONTIER Analyst Q&A
Slide 16: Appendix
Appendix
Slide 17: CASM to CASM (excluding fuel), Adjusted CASM and Adjusted CASM Including Net Interest, Non-GAAP Reconciliation
CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM and Adjusted CASM Including 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 informat
Slide 18: Footnotes to Accompany CASM Non-GAAP Reconciliation
Footnotes to Accompany CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM and Adjusted CASM Including Net Interest, Non-GAAP Reconciliation 16
Frontier Group Holdings — Q4 2023 Earnings Presentation on 6ix