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America's largest budget airline reports 71% jump in airfare

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In short

Frontier Airlines reported a 71 percent jump in average airfare during the third quarter, raising fares to $67.82 per passenger compared to $39.74 the previous year. The country's largest budget airline stated the price increases were an effort to pass along an even larger surge in jet fuel costs. Despite the higher prices, customer demand remained strong as passenger counts increased by 18 percent to more than 9.8 million people, adding 1.5 million passengers compared to the same period last year.

Key points

  • Frontier Airlines reported a 71 percent jump in average airfare during the third quarter,…: Frontier Airlines reported a 71 percent jump in average airfare during the third quarter, raising fares to $67.82 per passenger compared to $39.74 the previous year.
  • The country's largest budget airline stated the price increases were an effort to pass al…: The country's largest budget airline stated the price increases were an effort to pass along an even larger surge in jet fuel costs.
  • Despite the higher prices, customer demand remained strong as passenger counts increased…: Despite the higher prices, customer demand remained strong as passenger counts increased by 18 percent to more than 9.8 million people, adding 1.5 million passengers compared to the same period last year.

Sources checked by our analysis pipeline: 1

Frontier Airlines reported a 71% increase in airfare in the third quarter as the country's largest budget airline tried to pass along an even bigger jump in jet fuel prices.

Frontier's fare revenue averaged $67.82 per passenger in the third quarter, compared with $39.74 last year. Including the budget airline's many fees, such as for checked and carry-on luggage, total revenue per passenger rose 30% on the year to $138.22.

Customers kept booking despite the higher prices. Frontier's passenger count rose 18% to more than 9.8 million people in the quarter. That's a difference of 1.5 million passengers from last year.

The company said demand remains strong, even at these higher prices, but Frontier still lost money. The airline widened its third-quarter loss to $104 million from a $77 million loss a year earlier. Its fuel bill soared 82% to $425 million.

Frontier forecast potential adjusted profit in the fourth quarter, saying it expects to post an adjusted loss of 15 cents per share to adjusted earnings of as much as 5 cents per share.

Carriers from Delta Air Lines to Frontier have said customers are mostly continuing to book flights despite higher fares, but that record jet fuel prices, their biggest cost after labor, are eroding profits.

Frontier shares were up about 6% in early trading Wednesday.

Frontier had eclipsed Spirit Airlines as the biggest discount carrier in the country even before that airline collapsed in May.

Original source: www.cnbc.com

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