By Shivansh Tiwary and Doyinsola Oladipo (Reuters) -Frontier Group, parent of discount carrier Frontier Airlines, forecast a bigger-than-expected loss for the third quarter on Tuesday, as soft domestic travel demand weighs on fares, causing its shares to slump 13% in afternoon trading. Several major U.S. carriers, including Frontier, scrapped their financial forecasts in April, citing […]
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Frontier Group forecasts bigger-than-expected Q3 loss on soft domestic demand
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By Shivansh Tiwary and Doyinsola Oladipo
(Reuters) -Frontier Group, parent of discount carrier Frontier Airlines, forecast a bigger-than-expected loss for the third quarter on Tuesday, as soft domestic travel demand weighs on fares, causing its shares to slump 13% in afternoon trading.
Several major U.S. carriers, including Frontier, scrapped their financial forecasts in April, citing uncertainty linked to President Donald Trump’s broad tariff measures and government spending cuts, which pressured consumers to scale back travel plans.
Since then, while airline executives and analysts have said there are early signs of stability in demand, budget-conscious travelers remain cautious amid tighter household finances.
The summer season, traditionally the industry’s most profitable period, is underperforming this year, with weak demand for standard economy seats, forcing airlines to slash fares.
“We believe that the entire industry is not making money” on domestic fares in the domestic market, CEO Barry Biffle said on a post-earnings call.
The carrier expects its third-quarter adjusted loss per share to be between 26 cents and 42 cents, compared with analysts’ estimate of an 11-cent loss, according to data compiled by LSEG.
Executives are betting that capacity cuts through this year will help firm up airfare and improve pricing power.
Frontier expects its third-quarter capacity to fall 3% to 5% from a year earlier, while fourth-quarter capacity to be flat.
It reported a net loss of 31 cents per share for the quarter through June, compared with a 14-cent-per-share profit a year earlier. Analysts estimated a loss of 27 cents.
Total revenue fell 4.5% to $929 million, compared with Wall Street expectations of $946.12 million.
“The airline is at the mercy of the price-sensitive leisure revenue environment, and non-fuel costs look likely to come under pressure in the quarters ahead,” TD Cowen’s Tom Fitzgerald wrote in a note.
(Reporting by Shivansh Tiwary in Bengaluru and Doyinsola Oladipo in New York; Additional reporting by Aatreyee Dasgupta in Bengaluru; Editing by Shilpi Majumdar)