Frontier Group, the parent of budget carrier Frontier Airlines, forecast better-than-expected 2025 profit on Friday, aided by robust travel demand amid an improved pricing environment. Shares of the ultra-low-cost carrier were up nearly 15% in early trading after the airline also beat fourth-quarter profit estimates. After an oversupply of seats last summer led airlines to cut fares and sacrifice margins, the industry has adjusted its capacity to drive up prices, with the holiday month of December witnessing the sharpest increase in airfares in 21 months. Frontier's revenue per available seat miles (RASM), a proxy for pricing power, was 10.23 cents in the final quarter of the year, a 15% growth from a year earlier. It expects an adjusted profit per share of at least $1 in 2025, compared with analysts' average estimates of 58 cents per share, according to data compiled by LSEG. "Our revenue and network initiatives contributed to record fourth-quarter revenue, setting us on a trajectory for significant year-over-year RASM growth in 2025, which underpins our target of achieving double-digit adjusted pre-tax margins in the summer of 2025," CEO Barry Biffle said.<br/>
unaligned
Regional carrier SkyWest Airlines expects to approach “2019 levels” of block-hour flying this year as major US airlines boost their feeder networks. SkyWest anticipates flying about 12% more block hours this year than last, “driven primarily by improving fleet availability and ongoing strong demand for our production”, CE Chip Childs said during the company’s year-end earnings call. Company executives say that block hours will surge during upcoming summer months as it returns to service about 30 dual-class MHIRJ CRJ-family aircraft to its massive, 500-strong fleet of regional jets. SkyWest, the largest regional carrier in the USA – which contracts with all three major US network carriers as well as Alaska Airlines – last year grew its block hours by a similar figure over 2023. American Airlines, Delta Air Lines and United Airlines have all forecast a return to full utilisation of their regional fleets, which have been slow to recover from the Covid-19 pandemic due to a years-long pilot shortage. <br/>
Air Transat says it will no longer allow carry-on bags for its low-fare customers on most flights in the latest example of discount carrier tactics entering the mainstream. Starting Tuesday, passengers on the airline's Eco Budget and Eco Promo fare class will have to check their luggage for a fee of between $35 and $50 on flights within North and South America. Air Transat is also ending its policy of one free checked suitcase for its next-lowest fare class, called Eco Standard. Trips to Europe, Peru and North Africa, as well as all-inclusive packages, remain unaffected by the changes. Travellers of all fare classes will still be allowed to take a small personal item such as a purse or laptop bag on board for free. The airline said in an email the changes allow it to offer more competitive fares and align with industry practices. Air Transat's moves mark a shift toward the trend also followed by its larger rivals of charging fees for formerly bundled services such as checked bags, on-board snacks and seat selection. Canadian airline executives faced a grilling from parliamentarians over carry-on bag fees in December, while the CEOs of Air Canada and WestJet insisted the country's aviation system needs an overhaul to make travel more affordable.<br/>