Feb 11 (Reuters) - Frontier Group, parent of budget carrier Frontier Airlines, on Wednesday issued a forecast that pointed to a possible profit for the year, while analysts expect a loss, as it bets on tighter cost controls.
Shares of the carrier rose 4.4% in early trading, after it also said it would terminate certain aircraft leases early and defer deliveries of some jets to trim capacity and preserve cash.
The airline forecast a 2026 range spanning a loss of 40 cents per share to a profit of 50 cents per share, on an adjusted basis, with the midpoint pointing to a 5-cent profit. Analysts on average estimated a loss of 1 cent per share, according to data compiled by LSEG.
Frontier's unusually wide forecast range lays bare just how uncertain it has become for carriers to gauge near-term demand, particularly for economy-class seats, as cost-conscious travelers pull back amid a more challenging economic backdrop.
Budget airlines are also grappling with elevated aircraft maintenance, fuel and crew costs, even as rivals with robust premium offerings capitalize on higher-margin fares.
Frontier has been betting on network changes, capacity cuts and improved product offerings to boost its earnings.
For the fourth quarter, the Denver-based airline reported an adjusted profit per share of 23 cents, while the Street estimated 12 cents.
Frontier also said it has reached an agreement with aircraft lessor AerCap to terminate leases on 24 jets currently in service that were otherwise set to expire over the next two to eight years.
At the same time, it has struck a deal with Airbus SAS to defer the induction of 69 A320neo jets, which were contractually expected to be delivered between 2027 and 2030.
Frontier ended 2025 with $874 million in total liquidity, including $220 million from a recently expanded revolving credit facility.
It even plans to roll out first-class style seating in early 2026 as part of its efforts to add higher-margin products beyond its traditional all-economy layout.
The airline has said it is aiming to double its loyalty revenue to about $6 per passenger by the end of 2026.
Reporting by Shivansh Tiwary in Bengaluru; Editing by Shilpi Majumdar
Source: Reuters