Frontier loses $13m in Q1, shifts strategy to peak travel periods

Frontier Airlines reports a loss of $13m in Q1 2023, compared with a $121m loss during the same period last year. The Denver-based ultra-low-cost carrier (ULCC) posted a company-record $848m in revenue during Q1, up from $605m in 2022, Frontier said during its 3 May earnings call. ”The results are reflective of the seasonality of the business, with the seasonally weak first half of the quarter substantially offset by a strong spring break period,” says James Dempsey, Frontier’s CFO. The airline’s expenses were $873m, a 15% increase over last year’s Q1 costs of $758m. Frontier’s load factor for the three months ending 31 March was 82.8%, compared with 74.2% last year. Frontier is tweaking its network strategy to focus more on peak periods for leisure travel and “reducing under-performing flying” during low-demand periods. ”We conducted a full review of profitability over the past several quarters and observed a clear change in consumer demand patterns,” says Daniel Shurz, Frontier’s senior vice-president of commercial. ”While overall leisure travel is increasing, the breadth is disproportionately landing on peak days and in peak travel periods.” The strategy of flying more on days people want to travel – and less on days they do not – is a key principle for US competitors Allegiant Air and Sun Country Airlines, which have traditionally operated more variable schedules than Frontier and Spirit Airlines. Frontier plans to roll out an adjusted peak-trough strategy in time for the busy summer air travel season in the northern hemisphere. ”Having analysed this new customer behaviour – and until the peak and off-peak demand relationship normalises – we are reshaping our capacity beginning in the second quarter to exploit this dynamic, and expect the changes to be fully deployed in the second half of 2023,” says Barry Biffle, Frontier’s CE. <br/>