Frontier Group Holdings, Inc. (Nasdaq: ULCC), parent company of
Frontier Airlines, Inc., today reported financial results for the
fourth quarter and full year 2023 and issued guidance for the first
quarter and full year 2024.
Fourth Quarter
2023 Key Highlights:
- Pre-tax margin was 0.7 percent and
adjusted (non-GAAP) pre-tax margin was 0.8 percent
- Total operating revenues were $891
million, 2 percent lower than the comparable 2022 quarter
- Cost per available seat mile
(“CASM”) was 8.93 cents, 10 percent lower than the comparable 2022
quarter, and adjusted (non-GAAP) CASM (excluding fuel) was 5.90
cents, 8 percent lower than the comparable 2022 quarter
- Achieved a 99.5 percent completion
factor during the quarter, and the highest on-time arrivals and
departures since 2015 (excluding pandemic-year 2020) in the month
of December
- Took delivery of four A321neo
aircraft during the fourth quarter, increasing the proportion of
the fleet comprised of the more fuel-efficient A320neo family
aircraft to 79 percent as of December 31, 2023, the highest of
all major U.S. carriers
- Generated 105 available seat miles
(“ASMs”) per gallon, approximately 3 percent higher than the
comparable 2022 quarter, reaffirming Frontier's position as the
most fuel-efficient of all major U.S. carriers and its ongoing
commitment to being “America's Greenest Airline” as measured by
ASMs per fuel gallon consumed
- Unveiled a reimagined Frontier
Miles loyalty program for 2024 enabling customers to “Get it All
for Less” and earn the highest rate in the industry on total
eligible purchases
- Announced new crew bases at
Cleveland Hopkins, Cincinnati/Northern Kentucky International,
Chicago O'Hare/Midway and San Juan, Puerto Rico (announced January
2024)
- Announced new routes and expanded
operations from 10 bases, consistent with the Company's strategy to
focus growth on overpriced and underserved markets
“Fourth quarter results significantly outperformed guidance on
strong operational performance and cost execution, providing a
solid foundation as we enter 2024,” commented Barry Biffle, Chief
Executive Officer. “Leveraging this momentum, we intend to expand
profitability in 2024 by executing on our network simplification
plan, focusing growth on overpriced and underserved markets,
further diversifying our revenue stream, enhancing customer
engagement, and further lowering our unit costs. I'm proud of Team
Frontier for their outstanding performance and for their commitment
to deliver Low Fares Done Right.”
Fourth Quarter and Full Year
2023 Select Financial
Highlights
The following is a summary of fourth quarter and full year 2023
select financial results, including both GAAP and adjusted
(non-GAAP) metrics. Refer to “Reconciliations of Non-GAAP Financial
Information” in the appendix of this release.
(unaudited, in
millions, except for percentages) |
|
Three Months Ended December 31, |
|
2023 |
|
2022 |
|
As Reported(GAAP) |
|
Adjusted(Non-GAAP) |
|
As Reported(GAAP) |
|
Adjusted(Non-GAAP) |
Total operating revenues |
$ |
891 |
|
|
$ |
891 |
|
|
$ |
906 |
|
|
$ |
906 |
|
Total operating expenses |
$ |
894 |
|
|
$ |
893 |
|
|
$ |
861 |
|
|
$ |
859 |
|
Pre-tax income (loss) |
$ |
6 |
|
|
$ |
7 |
|
|
$ |
50 |
|
|
$ |
52 |
|
Pre-tax income (loss)
margin |
|
0.7% |
|
|
|
0.8% |
|
|
|
5.5% |
|
|
|
5.7% |
|
Net income (loss) |
$ |
(37) |
|
|
$ |
1 |
|
|
$ |
40 |
|
|
$ |
39 |
|
Diluted earnings (loss) per
share |
$ |
(0.17) |
|
|
$ |
— |
|
|
$ |
0.18 |
|
|
$ |
0.17 |
|
(unaudited, in
millions, except for percentages) |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
As Reported(GAAP) |
|
Adjusted (Non-GAAP) |
|
As Reported(GAAP) |
|
Adjusted (Non-GAAP) |
Total operating revenues |
$ |
3,589 |
|
|
$ |
3,589 |
|
|
$ |
3,326 |
|
|
$ |
3,326 |
|
Total operating expenses |
$ |
3,592 |
|
|
$ |
3,590 |
|
|
$ |
3,371 |
|
|
$ |
3,352 |
|
Pre-tax income (loss) |
$ |
32 |
|
|
$ |
34 |
|
|
$ |
(45) |
|
|
$ |
(19) |
|
Pre-tax income (loss)
margin |
|
0.9% |
|
|
|
0.9% |
|
|
|
(1.4)% |
|
|
|
(0.6)% |
|
Net income (loss) |
$ |
(11) |
|
|
$ |
28 |
|
|
$ |
(37) |
|
|
$ |
(17) |
|
Diluted earnings (loss) per
share |
$ |
(0.05) |
|
|
$ |
0.12 |
|
|
$ |
(0.17) |
|
|
$ |
(0.08) |
|
Revenue Performance
Total operating revenue for the fourth quarter of 2023 was $891
million, reflecting a revenue per available seat mile (“RASM”) of
8.90 cents, on capacity growth of 15 percent compared to the 2022
quarter. The decrease in RASM from 10.45 cents in the 2022 quarter
was driven by a 17 percent decrease in revenue per passenger to
$110. Departures increased 20 percent compared to the 2022 quarter
on a stage length which was 8 percent shorter.
Cost Performance
Total operating expenses for the fourth quarter of 2023 were
$894 million, including $303 million of fuel expenses at an average
cost of $3.18 per gallon. Total adjusted operating expenses
(excluding fuel), a non-GAAP measure, were $590 million, including
a $36 million benefit related to the extension during the quarter
of four A320ceo aircraft leases that were otherwise scheduled to
return in 2024.
CASM was 8.93 cents in the fourth quarter, 10 percent lower than
the comparable 2022 quarter with fuel cost - comprising
approximately 34 percent of total operating expenses - roughly
in-line with the comparable 2022 quarter, and non-fuel expenses up
6 percent compared to the 2022 quarter on capacity growth of 15
percent. Fuel cost for the quarter reflects a 13 percent increase
in consumption, net of a 3 percent improvement in fuel efficiency
to 105 ASMs per gallon, offset by a 12 percent decrease in fuel
cost per gallon, each compared to the 2022 quarter.
CASM (excluding fuel), a non-GAAP measure, was 5.91 cents, 8
percent lower than the comparable 2022 quarter. Adjusted (non-GAAP)
CASM (excluding fuel) was 5.90 cents, also 8 percent lower than the
comparable 2022 quarter.
Earnings
Pre-tax income for the fourth quarter of 2023 was $6 million,
reflecting a pre-tax margin of 0.7 percent. Adjusted pre-tax
income, a non-GAAP measure, was $7 million, reflecting an adjusted
pre-tax margin of 0.8 percent.
Net loss for the fourth quarter of 2023 was $37 million,
including the recognition of a $37 million non-cash valuation
allowance against deferred tax assets. This allowance does not
affect the Company's ability to utilize cumulative net operating
losses against potential future income tax liabilities. Excluding
special items, adjusted net income, a non-GAAP measure, was $1
million. Refer to “Reconciliations of Non-GAAP Financial
Information” in the appendix of this release.
Cash and Liquidity
Unrestricted cash and cash equivalents as of December 31,
2023 was $609 million, or $139 million net of debt. The
Company also has unencumbered loyalty and brand-related assets
which it believes could generate significant additional liquidity,
if desired.
Fleet
As of December 31, 2023, Frontier had a fleet of 136 Airbus
single-aisle aircraft, as scheduled below, all financed through
operating leases that expire between 2025 and 2035.
Equipment |
Quantity |
Seats |
A320ceo |
8 |
180 or 186 |
A320neo |
82 |
186 |
A321ceo |
21 |
230 |
A321neo |
25 |
240 |
Total
fleet |
136 |
|
Frontier is “America's Greenest Airline” measured by ASMs per
fuel gallon consumed. During the fourth quarter of 2023, Frontier
generated 105 ASMs per gallon, a 3 percent improvement compared to
the 2022 quarter.
Frontier took delivery of four A321neo aircraft during the
fourth quarter of 2023, increasing the proportion of the fleet
comprised of the more fuel-efficient A320neo family aircraft to 79
percent as of December 31, 2023, the highest of all major U.S.
carriers. The A321neo is expected to unlock meaningful scale
efficiencies by way of fuel savings and higher average seats per
departure. As of December 31, 2023, the Company had
commitments for an additional 210 aircraft to be delivered through
2029, including purchase commitments for 67 A320neo aircraft and
143 A321neo aircraft, representing 68 percent of future committed
deliveries.
Forward Guidance
The guidance provided below is based on the Company's current
estimates and is not a guarantee of future performance. This
guidance is subject to significant risks and uncertainties that
could cause actual results to differ materially, including the risk
factors discussed in the Company's reports on file with the
Securities and Exchange Commission (the "SEC"). Frontier undertakes
no duty to update any forward-looking statements or estimates,
except as required by applicable law. Further, this guidance
excludes special items and the reconciliation of non-GAAP measures
to the comparable GAAP measures because such amounts cannot be
determined at this time.
The Company continues to see sequential improvement in the
revenue environment as adjusted for seasonality. The Company is
focusing its growth on overpriced and underserved "VFR" (Visiting
Friends and Relatives) markets which, alongside network
simplification, revenue diversification and cost savings
initiatives, are expected to expand profitability in 2024.
First Quarter 2024
Capacity is anticipated to grow 5 to 7 percent compared to the
2023 quarter. Fuel costs are expected to be $2.85 to $2.95 per
gallon based on the blended fuel curve on February 2, 2024.
Adjusted (non-GAAP) total operating expenses (excluding fuel) are
anticipated to be $645 to $660 million. The effective tax rate is
estimated to be approximately 23 percent. Adjusted (non-GAAP)
pre-tax loss margin is expected to be (4) to (7) percent (excluding
special items).
Full Year 2024
Capacity is anticipated to grow 12 to 15 percent compared to
2023 and adjusted (non-GAAP) pre-tax margin is expected to be 3 to
6 percent (excluding special items). Fuel costs are expected to be
$2.70 to $2.80 per gallon based on the blended fuel curve on
February 2, 2024. Adjusted (non-GAAP) CASM (excluding fuel),
stage-length adjusted to 1,000 miles, is expected to be down 1 to 3
percent over the prior year. Pre-delivery deposits, net of refunds,
are expected to be $20 to $50 million and other capital
expenditures are expected to be $160 to $180 million.
The current forward guidance estimates are presented in the
following table:
|
First Quarter |
|
2024(a) |
Capacity growth (versus 1Q
2023)(b) |
5 to 7% |
Adjusted (non-GAAP) total
operating expenses (excluding fuel) ($ millions)(c) |
$645 to $660 |
Average fuel cost per
gallon(d) |
$2.85 to $2.95 |
Effective tax rate(e) |
~23% |
Adjusted (non-GAAP) pre-tax
margin |
(4) to (7)% |
|
Full Year |
|
2024(a) |
Capacity growth (versus
2023)(b) |
12 to 15% |
Average fuel cost per
gallon(d) |
$2.70 to $2.80 |
Adjusted (non-GAAP) CASM
(excluding fuel), SLA 1,000 (¢)(c) |
Down 1 to 3% |
Adjusted (non-GAAP) pre-tax
margin |
3 to 6% |
Pre-delivery deposits, net of
refunds ($ millions) |
$20 to $50 |
Other capital expenditures ($
millions)(f) |
$160 to $180 |
_________________(a) Includes guidance on
certain non-GAAP measures, including adjusted total operating
expenses (excluding fuel) and adjusted pre-tax margin, and which
excludes, among other things, special items. The Company is unable
to reconcile these forward-looking projections to GAAP as the
nature or amount of such special items cannot be determined at this
time.
(b) Given the dynamic nature of the current
demand environment, actual capacity adjustments made by the Company
may be materially different than what is currently expected.
(c) Amount estimated excludes fuel expense and
special items, the latter of which are not estimable at this time.
The amount takes into consideration the additional expected
capacity. Stage Length Adjusted (SLA) to 1,000 miles: Adjusted CASM
(excluding fuel) * Square root (stage length / 1,000).
(d) Estimated fuel cost per gallon is based
upon the blended jet fuel curve on February 2, 2024 and is
inclusive of estimated fuel taxes and into-plane fuel costs.
(e) The Company’s first quarter actual tax rate
may differ from the forecasted rate due to varying factors which
may include, but are not limited to, the composition of items of
income and expense recognized in the first quarter, including the
amount of non-deductible or other similar items, the treatment of
deferred tax assets and related valuation allowances, and the
ultimate tax rate applicable to annual results.
(f) Other capital expenditures estimate
includes capitalized heavy maintenance.
Conference Call
The Company will host a conference call to discuss fourth
quarter 2023 results today, February 6, 2024, at 11:00 a.m.
Eastern Time (USA). Investors may listen to a live, listen-only
webcast available on the investor relations section of the
Company's website at
https://ir.flyfrontier.com/news-and-events/events. Commentary from
management will be supplemented with a brief presentation which can
be viewed on the webcast platform with a PC or smartphone, or,
alternatively, the presentation can be downloaded from the investor
relations website at the same address noted above.
The call will be archived and available for 90 days on the
investor relations section of the Company's website.
About Frontier Airlines
Frontier Airlines, Inc., a subsidiary of Frontier Group
Holdings, Inc. (Nasdaq: ULCC), is committed to “Low Fares Done
Right.” Headquartered in Denver, Colorado, the Company operates 136
A320 family aircraft and has the largest A320neo family fleet in
the U.S. The use of these aircraft, along with Frontier’s
high-density seating configuration and weight-saving initiatives,
have contributed to Frontier’s continued ability to be the most
fuel-efficient of all major U.S. carriers when measured by ASMs per
fuel gallons consumed. With 210 new Airbus planes on order,
Frontier will continue to grow to deliver on the mission of
providing affordable travel across America.
Cautionary Statement Regarding Forward-Looking
Statements and Information
Certain statements in this release should be considered
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on the Company’s current expectations and beliefs with
respect to certain current and future events and anticipated
financial and operating performance. Words such as “expects,”
“will,” “plans,” “intends,” “anticipates,” “indicates,” “remains,”
“believes,” “estimates,” “forecast,” “guidance,” “outlook,”
“goals,” “targets” and similar expressions are intended to identify
forward-looking statements. Additionally, forward-looking
statements include statements that do not relate solely to
historical facts, such as statements which identify uncertainties
or trends, discuss the possible future effects of current known
trends or uncertainties, or which indicate that the future effects
of known trends or uncertainties cannot be predicted, guaranteed or
assured. All forward-looking statements in this release are based
upon information available to the Company on the date of this
release. The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, changed circumstances or otherwise,
except as required by applicable law.
Actual results could differ materially from these
forward-looking statements due to numerous risks and uncertainties
relating to the Company's operations and business environment
including, without limitation, the following: unfavorable economic
and political conditions in the states where the Company operates
and globally, including an inflationary environment, and the
resulting impact on cost inputs and/or consumer demand for air
travel; the highly competitive nature of the global airline
industry and susceptibility of the industry to price discounting
and changes in capacity; disruptions to the Company's flight
operations, including due to factors beyond the Company's control,
such as adverse weather events or air traffic controller staffing
shortages; the Company's ability to attract and retain qualified
personnel at reasonable costs; high and/or volatile fuel prices or
significant disruptions in the supply of aircraft fuel, including
as a result of the war between Russia and Ukraine or the conflict
in the Middle East; the Company's reliance on technology and
automated systems to operate its business and the impact of any
significant failure or disruption of, or failure to effectively
integrate and implement, the technology or systems; the Company’s
reliance on third-party service providers and the impact of any
failure of these parties to perform as expected, or interruptions
in the Company's relationships with these providers or their
provision of services; adverse publicity and/or harm to the
Company's brand or reputation; reduced travel demand and potential
tort liability as a result of an accident, catastrophe or incident
involving the Company, its codeshare partners or another airline;
terrorist attacks, international hostilities or other security
events, or the fear of terrorist attacks or hostilities, even if
not made directly on the airline industry; increasing privacy and
data security obligations or a significant data breach; further
changes to the airline industry with respect to alliances and joint
business arrangements or due to consolidations; changes in the
Company's network strategy or other factors outside its control
resulting in less economic aircraft orders, costs related to
modification or termination of aircraft orders or entry into less
favorable aircraft orders; the Company's reliance on a single
supplier for its aircraft and two suppliers for its engines, and
the impact of any failure to obtain timely deliveries, additional
equipment or support from any of these suppliers; expanded
inspection programs and/or heightened maintenance requirements
imposed on the Company’s aircraft or engines; the impacts of union
disputes, employee strikes or slowdowns, and other labor-related
disruptions on the Company's operations; extended interruptions or
disruptions in service at major airports where the Company
operates; the impacts of seasonality and other factors associated
with the airline industry; the Company's failure to realize the
full value of its intangible assets or its long-lived assets,
causing the Company to record impairments; the costs of compliance
with extensive government regulation of the airline industry;
costs, liabilities and risks associated with environmental
regulation and climate change; the Company's inability to accept or
integrate new aircraft into the Company's fleet as planned; the
impacts of the Company's significant amount of financial leverage
from fixed obligations, the possibility the Company may seek
material amounts of additional financial liquidity in the
short-term and the impacts of insufficient liquidity on the
Company's financial condition and business; failure to comply with
the covenants in the Company's financing agreements or failure to
comply with financial and other covenants governing the Company's
other debt; changes in, or failure to retain, the Company's senior
management team or other key employees; current or future
litigation and regulatory actions, or failure to comply with the
terms of any settlement, order or arrangement relating to these
actions; increases in insurance costs or inadequate insurance
coverage; and other risks and uncertainties set forth from time to
time under sections captioned “Risk Factors” in the Company's
reports and other documents filed with the SEC, including the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2022, which was filed with the SEC on February 22,
2023.
Frontier Group Holdings, Inc. |
Consolidated Statements of Operations |
(unaudited, in millions, except share and per share
amounts) |
|
|
Three Months EndedDecember 31, |
|
PercentChange |
|
Year Ended December 31, |
|
PercentChange |
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
Passenger |
$ |
872 |
|
|
$ |
887 |
|
|
(2)% |
|
|
$ |
3,509 |
|
|
$ |
3,248 |
|
|
8% |
|
Other |
|
19 |
|
|
|
19 |
|
|
—% |
|
|
|
80 |
|
|
|
78 |
|
|
3% |
|
Total operating
revenues |
|
891 |
|
|
|
906 |
|
|
(2)% |
|
|
|
3,589 |
|
|
|
3,326 |
|
|
8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft fuel |
|
303 |
|
|
|
304 |
|
|
—% |
|
|
|
1,130 |
|
|
|
1,160 |
|
|
(3)% |
|
Salaries, wages and
benefits |
|
223 |
|
|
|
187 |
|
|
19% |
|
|
|
858 |
|
|
|
715 |
|
|
20% |
|
Aircraft rent |
|
125 |
|
|
|
155 |
|
|
(19)% |
|
|
|
554 |
|
|
|
556 |
|
|
—% |
|
Station operations |
|
135 |
|
|
|
96 |
|
|
41% |
|
|
|
516 |
|
|
|
422 |
|
|
22% |
|
Maintenance, materials and
repairs |
|
34 |
|
|
|
39 |
|
|
(13)% |
|
|
|
179 |
|
|
|
146 |
|
|
23% |
|
Sales and marketing |
|
39 |
|
|
|
44 |
|
|
(11)% |
|
|
|
164 |
|
|
|
164 |
|
|
—% |
|
Depreciation and
amortization |
|
14 |
|
|
|
9 |
|
|
56% |
|
|
|
50 |
|
|
|
45 |
|
|
11% |
|
Transaction and merger-related
costs, net |
|
— |
|
|
|
2 |
|
|
N/M |
|
|
|
1 |
|
|
|
10 |
|
|
(90)% |
|
Other operating |
|
21 |
|
|
|
25 |
|
|
(16)% |
|
|
|
140 |
|
|
|
153 |
|
|
(8)% |
|
Total operating
expenses |
|
894 |
|
|
|
861 |
|
|
4% |
|
|
|
3,592 |
|
|
|
3,371 |
|
|
7% |
|
Operating income
(loss) |
|
(3) |
|
|
|
45 |
|
|
N/M |
|
|
|
(3) |
|
|
|
(45) |
|
|
(93)% |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(8) |
|
|
|
(5) |
|
|
60% |
|
|
|
(29) |
|
|
|
(21) |
|
|
38% |
|
Capitalized interest |
|
9 |
|
|
|
5 |
|
|
80% |
|
|
|
28 |
|
|
|
11 |
|
|
155% |
|
Interest income and other |
|
8 |
|
|
|
5 |
|
|
60% |
|
|
|
36 |
|
|
|
10 |
|
|
260% |
|
Total other income
(expense) |
|
9 |
|
|
|
5 |
|
|
80% |
|
|
|
35 |
|
|
|
— |
|
|
N/M |
|
Income (loss) before income
taxes |
|
6 |
|
|
|
50 |
|
|
(88)% |
|
|
|
32 |
|
|
|
(45) |
|
|
N/M |
|
Income tax expense
(benefit) |
|
43 |
|
|
|
10 |
|
|
330% |
|
|
|
43 |
|
|
|
(8) |
|
|
N/M |
|
Net income
(loss) |
$ |
(37) |
|
|
$ |
40 |
|
|
N/M |
|
|
$ |
(11) |
|
|
$ |
(37) |
|
|
(70)% |
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic(a) |
$ |
(0.17) |
|
|
$ |
0.18 |
|
|
N/M |
|
|
$ |
(0.05) |
|
|
$ |
(0.17) |
|
|
(71)% |
|
Diluted(a) |
$ |
(0.17) |
|
|
$ |
0.18 |
|
|
N/M |
|
|
$ |
(0.05) |
|
|
$ |
(0.17) |
|
|
(71)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic(a) |
|
221,930,738 |
|
|
|
217,805,133 |
|
|
2% |
|
|
|
220,097,989 |
|
|
|
217,601,373 |
|
|
1% |
|
Diluted(a) |
|
221,930,738 |
|
|
|
220,040,531 |
|
|
1% |
|
|
|
220,097,989 |
|
|
|
217,601,373 |
|
|
1% |
|
__________________N/M = Not meaningful
(a) In periods of net income, the dilutive
impact of the 3.1 million warrants outstanding relating to funding
provided pursuant to the CARES Act and related legislation, any
non-participating options and unvested restricted stock units are
included in the diluted earnings per share calculations. In
addition, most of the Company's 3.0 million outstanding
options are participating securities and are therefore not expected
to be part of the Company's diluted share count under the two-class
method until they are exercised, but, in periods of net income, are
included as an adjustment to the numerator of the Company's
earnings per share calculation as they are eligible to participate
in the Company's earnings. The participating securities impact has
been subtracted from periods presented with positive net income in
the computation of basic and diluted earnings per share.
Frontier Group Holdings, Inc.Selected
Operating Statistics(unaudited) |
|
|
|
|
Three Months EndedDecember 31, |
|
PercentChange |
|
Year Ended December 31, |
|
PercentChange |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
Operating
statistics(a) |
|
|
|
|
|
|
|
|
|
|
|
|
Available seat miles (ASMs)
(millions) |
10,013 |
|
|
8,670 |
|
|
15% |
|
|
37,822 |
|
|
31,746 |
|
|
19% |
|
|
Departures |
52,094 |
|
|
43,407 |
|
|
20% |
|
|
188,841 |
|
|
165,447 |
|
|
14% |
|
|
Average stage length
(miles) |
952 |
|
|
1,032 |
|
|
(8)% |
|
|
1,007 |
|
|
991 |
|
|
2% |
|
|
Block hours |
138,311 |
|
|
121,623 |
|
|
14% |
|
|
523,440 |
|
|
451,156 |
|
|
16% |
|
|
Average aircraft in
service |
134 |
|
|
115 |
|
|
17% |
|
|
126 |
|
|
112 |
|
|
13% |
|
|
Aircraft – end of period |
136 |
|
|
120 |
|
|
13% |
|
|
136 |
|
|
120 |
|
|
13% |
|
|
Average daily aircraft
utilization (hours) |
11.3 |
|
|
11.5 |
|
|
(2)% |
|
|
11.3 |
|
|
11.1 |
|
|
2% |
|
|
Passengers (thousands) |
8,099 |
|
|
6,836 |
|
|
18% |
|
|
30,218 |
|
|
25,486 |
|
|
19% |
|
|
Average seats per
departure |
201 |
|
|
193 |
|
|
4% |
|
|
199 |
|
|
193 |
|
|
3% |
|
|
Revenue passenger miles (RPMs)
(millions) |
7,817 |
|
|
7,122 |
|
|
10% |
|
|
30,798 |
|
|
25,669 |
|
|
20% |
|
|
Load Factor |
78.1% |
|
|
82.1% |
|
|
(4.0) pts |
|
|
81.4% |
|
|
80.9% |
|
|
0.5 pts |
|
|
Fare revenue per
passenger ($) |
38.44 |
|
|
50.76 |
|
|
(24)% |
|
42.26 |
|
|
54.22 |
|
|
(22)% |
|
|
Non-fare passenger revenue per
passenger ($) |
69.16 |
|
|
78.99 |
|
|
(12)% |
|
73.85 |
|
|
73.21 |
|
|
1% |
|
|
Other revenue per
passenger ($) |
2.45 |
|
|
2.77 |
|
|
(12)% |
|
2.66 |
|
|
3.07 |
|
|
(13)% |
|
|
Total ancillary revenue
passenger ($) |
71.61 |
|
|
81.76 |
|
|
(12)% |
|
76.51 |
|
|
76.28 |
|
|
—% |
|
|
Total revenue per
passenger ($) |
110.05 |
|
|
132.52 |
|
|
(17)% |
|
|
118.77 |
|
|
130.50 |
|
|
(9)% |
|
|
Total revenue per available
seat mile (RASM) (¢) |
8.90 |
|
|
10.45 |
|
|
(15)% |
|
|
9.49 |
|
|
10.48 |
|
|
(9)% |
|
|
Cost per available seat mile
(CASM) (¢) |
8.93 |
|
|
9.93 |
|
|
(10)% |
|
|
9.50 |
|
|
10.62 |
|
|
(11)% |
|
|
CASM (excluding fuel) (¢) |
5.91 |
|
|
6.43 |
|
|
(8)% |
|
|
6.51 |
|
|
6.96 |
|
|
(6)% |
|
|
CASM + net interest (¢) |
8.85 |
|
|
9.87 |
|
|
(10)% |
|
|
9.40 |
|
|
10.62 |
|
|
(11)% |
|
|
Adjusted CASM (¢) |
8.92 |
|
|
9.91 |
|
|
(10)% |
|
|
9.49 |
|
|
10.56 |
|
|
(10)% |
|
|
Adjusted CASM (excluding fuel)
(¢) |
5.90 |
|
|
6.40 |
|
|
(8)% |
|
|
6.50 |
|
|
6.90 |
|
|
(6)% |
|
|
Adjusted CASM (excluding
fuel), SLA 1,000 (¢)(b) |
5.76 |
|
|
6.50 |
|
|
(11)% |
|
|
6.52 |
|
|
6.87 |
|
|
(5)% |
|
|
Adjusted CASM + net interest
(¢) |
8.84 |
|
|
9.85 |
|
|
(10)% |
|
|
9.40 |
|
|
10.54 |
|
|
(11)% |
|
|
Fuel cost per gallon ($) |
3.18 |
|
|
3.60 |
|
|
(12)% |
|
|
3.10 |
|
|
3.72 |
|
|
(17)% |
|
|
Fuel gallons consumed
(thousands) |
95,181 |
|
|
84,556 |
|
|
13% |
|
|
364,606 |
|
|
312,115 |
|
|
17% |
|
|
Full-time equivalent
employees |
7,214 |
|
|
6,450 |
|
|
12% |
|
|
7,214 |
|
|
6,450 |
|
|
12% |
|
|
__________________(a) Figures may not
recalculate due to rounding.
(b) Stage Length Adjusted (SLA) to 1,000 miles:
Adjusted CASM (excluding fuel) * Square root (stage length /
1,000)
Reconciliations of Non-GAAP Financial
Information
The Company is providing below a reconciliation of GAAP
financial information to the non-GAAP financial information
provided. The non-GAAP financial information is included to provide
supplemental disclosures because the Company believes they are
useful additional indicators of, among other things, its operating
and cost performance. These non-GAAP financial measures have
limitations as analytical tools. Because of these limitations,
determinations of the Company’s operating performance or CASM
excluding unrealized gains and losses, special items or other items
should not be considered in isolation or as a substitute for
performance measures calculated in accordance with GAAP. These
non-GAAP financial measures may be presented on a different basis
than other companies using similarly titled non-GAAP financial
measures.
Reconciliation of Net Income (Loss) to Adjusted Net
Income (Loss) and Pre-Tax Income (Loss) to Adjusted Pre-Tax Income
(Loss)($ in millions) (unaudited)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income (loss), as reported |
$ |
(37 |
) |
|
$ |
40 |
|
|
$ |
(11 |
) |
|
$ |
(37 |
) |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
Salaries, wages and
benefits |
|
|
|
|
|
|
|
Collective bargaining contract ratification(a) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Depreciation and
amortization |
|
|
|
|
|
|
|
Asset impairment(b) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
Other operating
expenses |
|
|
|
|
|
|
|
Transaction and merger-related costs, net(c) |
|
— |
|
|
|
2 |
|
|
|
1 |
|
|
|
10 |
|
Other operating costs - legal fees(d) |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Interest
expense |
|
|
|
|
|
|
|
CARES Act – write-off of deferred financing costs due to paydown of
loan(e) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
Pre-tax
impact |
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
26 |
|
Tax benefit (expense), related to non-GAAP adjustments(f) |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(6 |
) |
Valuation allowance(g) |
|
37 |
|
|
|
— |
|
|
|
37 |
|
|
|
— |
|
Net income (loss)
impact |
|
38 |
|
|
|
(1 |
) |
|
|
39 |
|
|
|
20 |
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)(h) |
$ |
1 |
|
|
$ |
39 |
|
|
$ |
28 |
|
|
$ |
(17 |
) |
|
|
|
|
|
|
|
|
Income (loss) before
income taxes, as reported |
$ |
6 |
|
|
$ |
50 |
|
|
$ |
32 |
|
|
$ |
(45 |
) |
Pre-tax impact |
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
|
26 |
|
Adjusted pre-tax
income (loss)(h) |
$ |
7 |
|
|
$ |
52 |
|
|
$ |
34 |
|
|
$ |
(19 |
) |
__________________(a) Represents costs related
to a one-time incentive bonus and related payroll adjustments
resulting from the May 2022 contract ratification with the union
representing the Company's aircraft technicians.
(b) Represents a write-off of capitalized
software development costs as a result of a termination of a vendor
arrangement.
(c) Adjustments for the three months ended
December 31, 2022 and the year ended December 31, 2023
primarily represent employee retention costs incurred in connection
with the terminated merger with Spirit Airlines, Inc. ("Spirit").
For the year ended December 31, 2022, adjustments represent $19
million in employee retention costs and $16 million in transaction
costs, including banking, legal and accounting fees, incurred in
connection with the terminated merger with Spirit, partially offset
by $25 million received from Spirit for the reimbursement of
incurred merger-related expenses.
(d) Represents $1 million of legal fees
incurred due to the U.S. Department of Justice’s requests for
information and deposition testimony from the Company related to
the contemplated merger of Spirit and JetBlue Airways.
(e) On February 2, 2022, the Company repaid the
loan under its facility with the U.S. Department of the Treasury,
which resulted in a one-time write-off of the remaining $7 million
in unamortized deferred financing costs. This amount is a component
of interest expense.
(f) Represents the tax impact of the non-GAAP
adjustments. The tax impact reflected for the fourth quarter of
each year includes the impact of the update to the effective tax
rate for the full year on the first, second and third quarter
underlying results.
(g) In December 2023, the Company recorded a
$37 million non-cash valuation allowance against its U.S.
federal and state net operating loss deferred tax assets, which
largely don't expire, mainly as a result of being in a three-year
cumulative pre-tax loss position, which has no impact on cash taxes
and is not reflective of the Company's effective tax rate for
deductible net operating losses generated or actual cash tax
obligations created.
(h) Adjusted net income (loss) and adjusted
pre-tax income (loss) are included as a supplemental disclosure
because the Company believes they are useful indicators of its
operating performance. Derivations of net income and pre-tax income
are well-recognized performance measurements in the airline
industry that are frequently used by the Company's management, as
well as by investors, securities analysts and other interested
parties, in comparing the operating performance of companies in the
airline industry.
Adjusted net income (loss) and adjusted pre-tax income (loss)
have limitations as analytical tools. Adjusted net income (loss)
and adjusted pre-tax income (loss) do not reflect the impact of
certain cash charges resulting from matters the Company considers
not to be indicative of the Company's ongoing operations and do not
reflect the Company's cash expenditures, or future requirements,
for capital expenditures or contractual commitments, and other
companies in the industry may calculate adjusted net income (loss)
and adjusted pre-tax income (loss) differently than the Company
does, limiting their usefulness as comparative measures. Because of
these limitations, adjusted net income (loss) and adjusted pre-tax
income (loss) should not be considered in isolation from or as a
substitute for performance measures calculated in accordance with
GAAP. In addition, because derivations of adjusted net income
(loss) and adjusted pre-tax income (loss), including adjusted
pre-tax margin, are not determined in accordance with GAAP, such
measures are susceptible to varying calculations and not all
companies calculate the measures in the same manner. As a result,
derivations of net income, including adjusted net income (loss) and
adjusted pre-tax income (loss), as presented may not be directly
comparable to similarly titled measures presented by other
companies. For the foregoing reasons, adjusted net income (loss)
and adjusted pre-tax income (loss) have significant limitations
which affect their use as indicators of the Company's
profitability. Accordingly, you are cautioned not to place undue
reliance on this information.
Reconciliation of Total Operating Expenses to Total
Operating Expenses (excluding fuel), Adjusted Total Operating
Expenses and Adjusted Total Operating Expenses (excluding
fuel)($ in millions) (unaudited)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Total operating expenses, as
reported(a) |
$ |
894 |
|
|
$ |
861 |
|
|
$ |
3,592 |
|
|
$ |
3,371 |
|
Transaction and merger-related
costs, net |
|
— |
|
|
|
(2) |
|
|
|
(1) |
|
|
|
(10) |
|
Other operating costs - legal
fees |
|
(1) |
|
|
|
— |
|
|
|
(1) |
|
|
|
— |
|
Asset impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7) |
|
Collective bargaining contract
ratification |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2) |
|
Adjusted total
operating expenses(b) |
$ |
893 |
|
|
$ |
859 |
|
|
$ |
3,590 |
|
|
$ |
3,352 |
|
Aircraft fuel |
|
(303) |
|
|
|
(304) |
|
|
|
(1,130) |
|
|
|
(1,160) |
|
Adjusted total
operating expenses (excluding
fuel)(b) |
$ |
590 |
|
|
$ |
555 |
|
|
$ |
2,460 |
|
|
$ |
2,192 |
|
|
|
|
|
|
|
|
|
Total operating
expenses, as reported |
$ |
894 |
|
|
$ |
861 |
|
|
$ |
3,592 |
|
|
$ |
3,371 |
|
Aircraft fuel |
|
(303) |
|
|
|
(304) |
|
|
|
(1,130) |
|
|
|
(1,160) |
|
Total operating
expenses (excluding fuel)(b) |
$ |
591 |
|
|
$ |
557 |
|
|
$ |
2,462 |
|
|
$ |
2,211 |
|
__________________(a) See “Reconciliation of
Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax Income
(Loss) to Adjusted Pre-Tax Income (Loss)” above for discussion on
adjusting items.
(b) Total operating expenses (excluding fuel),
adjusted total operating expenses and adjusted total operating
expenses (excluding fuel) are included as supplemental disclosures
because the Company believes they are useful indicators of its
operating performance. Derivations of total operating expenses are
well-recognized performance measurements in the airline industry
that are frequently used by the Company's management, as well as by
investors, securities analysts and other interested parties, in
comparing the operating performance of companies in the airline
industry.
Total operating expenses (excluding fuel), adjusted total
operating expenses and adjusted total operating expenses (excluding
fuel) have limitations as analytical tools and other companies in
the industry may calculate total operating expenses (excluding
fuel), adjusted total operating expenses and adjusted total
operating expenses (excluding fuel) differently than the Company
does, limiting their usefulness as comparative measures. Because of
these limitations, total operating expenses (excluding fuel),
adjusted total operating expenses and adjusted total operating
expenses (excluding fuel) should not be considered in isolation
from or as a substitute for performance measures calculated in
accordance with GAAP. In addition, because derivations of total
operating expenses (excluding fuel), adjusted total operating
expenses and adjusted total operating expenses (excluding fuel) are
not determined in accordance with GAAP, such measures are
susceptible to varying calculations and not all companies calculate
the measures in the same manner. As a result, derivations of total
operating expenses, including total operating expenses (excluding
fuel), adjusted total operating expenses and adjusted total
operating expenses (excluding fuel) as presented may not be
directly comparable to similarly titled measures presented by other
companies. For the foregoing reasons, total operating expenses
(excluding fuel), adjusted total operating expenses and adjusted
total operating expenses (excluding fuel) have significant
limitations which affect their use as an indicator of the Company's
profitability. Accordingly, you are cautioned not to place undue
reliance on this information.
Reconciliation of Net Income (Loss) to EBITDA and
EBITDAR and to Adjusted EBITDA and Adjusted
EBITDAR($ in millions) (unaudited)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income (loss) |
$ |
(37) |
|
|
$ |
40 |
|
|
$ |
(11) |
|
|
$ |
(37) |
|
Plus (minus): |
|
|
|
|
|
|
|
Interest expense |
|
8 |
|
|
|
5 |
|
|
|
29 |
|
|
|
21 |
|
Capitalized interest |
|
(9) |
|
|
|
(5) |
|
|
|
(28) |
|
|
|
(11) |
|
Interest income and other |
|
(8) |
|
|
|
(5) |
|
|
|
(36) |
|
|
|
(10) |
|
Income tax expense (benefit) |
|
43 |
|
|
|
10 |
|
|
|
43 |
|
|
|
(8) |
|
Depreciation and amortization |
|
14 |
|
|
|
9 |
|
|
|
50 |
|
|
|
45 |
|
EBITDA(a) |
|
11 |
|
|
|
54 |
|
|
|
47 |
|
|
|
— |
|
Plus: Aircraft rent |
|
125 |
|
|
|
155 |
|
|
|
554 |
|
|
|
556 |
|
EBITDAR(b) |
$ |
136 |
|
|
$ |
209 |
|
|
$ |
601 |
|
|
$ |
556 |
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
11 |
|
|
$ |
54 |
|
|
$ |
47 |
|
|
$ |
— |
|
Plus (minus)(c): |
|
|
|
|
|
|
|
Transaction and merger-related costs, net |
|
— |
|
|
|
2 |
|
|
|
1 |
|
|
|
10 |
|
Other operating costs - legal fees |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Collective bargaining contract ratification |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Adjusted
EBITDA(a) |
|
12 |
|
|
|
56 |
|
|
|
49 |
|
|
|
12 |
|
Plus: Aircraft rent |
|
125 |
|
|
|
155 |
|
|
|
554 |
|
|
|
556 |
|
Adjusted
EBITDAR(b) |
$ |
137 |
|
|
$ |
211 |
|
|
$ |
603 |
|
|
$ |
568 |
|
__________________(a) EBITDA and adjusted
EBITDA are included as supplemental disclosures because the Company
believes they are useful indicators of its operating performance.
Derivations of EBITDA are well-recognized performance measurements
in the airline industry that are frequently used by the Company's
management, as well as by investors, securities analysts and other
interested parties, in comparing the operating performance of
companies in the industry.
EBITDA and adjusted EBITDA do not reflect the impact of certain
cash charges resulting from matters the Company considers not to be
indicative of its ongoing operations; the Company's cash
expenditures, or future requirements, for capital expenditures or
contractual commitments; changes in, or cash requirements for, the
Company's working capital needs; or the interest expense, or the
cash requirements necessary to service interest or principal
payments, on the Company's indebtedness or possible cash
requirements related to its warrants. Further, although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in
the future, and EBITDA and adjusted EBITDA do not reflect any cash
requirements for such replacements. Other companies in the airline
industry may calculate EBITDA and adjusted EBITDA differently than
the Company does, limiting their usefulness as comparative
measures. Because of these limitations, EBITDA and adjusted EBITDA
should not be considered in isolation from or as a substitute for
performance measures calculated in accordance with GAAP. In
addition, because derivations of EBITDA and adjusted EBITDA are not
determined in accordance with GAAP, such measures are susceptible
to varying calculations and not all companies calculate the
measures in the same manner. As a result, derivations of EBITDA,
including adjusted EBITDA, as presented may not be directly
comparable to similarly titled measures presented by other
companies.
For the foregoing reasons, each of EBITDA and adjusted EBITDA
have significant limitations which affect its use as an indicator
of the Company's profitability. Accordingly, you are cautioned not
to place undue reliance on this information.
(b) EBITDAR and adjusted EBITDAR are included
as supplemental disclosures because the Company believes they are
useful solely as valuation metrics for airlines as their
calculations isolate the effects of financing in general, the
accounting effects of capital spending and acquisitions (primarily
aircraft, which may be acquired directly, directly subject to
acquisition debt, by capital lease or by operating lease, each of
which is presented differently for accounting purposes), and income
taxes, which may vary significantly between periods and for
different airlines for reasons unrelated to the underlying value of
a particular airline. However, EBITDAR and adjusted EBITDAR are not
determined in accordance with GAAP, are susceptible to varying
calculations and not all companies calculate the measures in the
same manner. As a result, EBITDAR and adjusted EBITDAR, as
presented, may not be directly comparable to similarly titled
measures presented by other companies. In addition, EBITDAR and
adjusted EBITDAR should not be viewed as a measure of overall
performance since they exclude aircraft rent, which is a normal,
recurring cash operating expense that is necessary to operate the
business. Accordingly, you are cautioned not to place undue
reliance on this information.
(c) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted
Pre-Tax Income (Loss)” above for discussion on adjusting items.
Reconciliation of CASM to CASM (excluding fuel),
Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM
including net interest and CASM including net interest
(unaudited)
|
Three Months Ended December 31, |
|
2023 |
|
2022 |
|
($ in millions) |
|
Per ASM (¢) |
|
($ in millions) |
|
Per ASM (¢) |
CASM(a)(b) |
|
|
8.93 |
|
|
|
|
9.93 |
|
Aircraft fuel |
(303) |
|
|
(3.02) |
|
|
(304) |
|
|
(3.50) |
|
CASM (excluding
fuel)(c) |
|
|
5.91 |
|
|
|
|
6.43 |
|
Transaction and merger-related
costs, net |
— |
|
|
— |
|
|
(2) |
|
|
(0.03) |
|
Other operating costs - legal
fees |
(1) |
|
|
(0.01) |
|
|
— |
|
|
— |
|
Collective bargaining contract
ratification |
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted CASM
(excluding fuel)(c) |
|
|
5.90 |
|
|
|
|
6.40 |
|
Aircraft fuel |
303 |
|
|
3.02 |
|
|
304 |
|
|
3.51 |
|
Adjusted
CASM(d) |
|
|
8.92 |
|
|
|
|
9.91 |
|
Net interest expense
(income) |
(9) |
|
|
(0.08) |
|
|
(5) |
|
|
(0.06) |
|
Adjusted CASM + net
interest(e) |
|
|
8.84 |
|
|
|
|
9.85 |
|
|
|
|
|
|
|
|
|
CASM |
|
|
8.93 |
|
|
|
|
9.93 |
|
Net interest expense
(income) |
(9) |
|
|
(0.08) |
|
|
(5) |
|
|
(0.06) |
|
CASM + net
interest(e) |
|
|
8.85 |
|
|
|
|
9.87 |
|
__________________(a) Cost per ASM figures may
not recalculate due to rounding.
(b) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted
Pre-Tax Income (Loss)” above for discussion on adjusting items.
(c) CASM (excluding fuel) and adjusted CASM
(excluding fuel) are included as supplemental disclosures because
the Company believes that excluding aircraft fuel is useful to
investors as it provides an additional measure of management’s
performance excluding the effects of a significant cost item over
which management has limited influence. The price of fuel, over
which the Company has limited control, impacts the comparability of
period-to-period financial performance, and excluding allows
management an additional tool to understand and analyze the
Company's non-fuel costs and core operating performance, and
increases comparability with other airlines that also provide a
similar metric. CASM (excluding fuel) and adjusted CASM (excluding
fuel) are not determined in accordance with GAAP and should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP.
(d) Adjusted CASM is included as supplemental
disclosure because the Company believes it is a useful metric to
properly compare the Company’s cost management and performance to
other peers, as derivations of adjusted CASM are well-recognized
performance measurements in the airline industry that are
frequently used by the Company's management, as well as by
investors, securities analysts and other interested parties in
comparing the operating performance of companies in the airline
industry. Additionally, the Company believes this metric is useful
because it removes certain items that may not be indicative of base
operating performance or future results. Adjusted CASM is not
determined in accordance with GAAP, may not be comparable across
all carriers and should not be considered in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
(e) Adjusted CASM including net interest and
CASM including net interest are included as supplemental
disclosures because the Company believes they are useful metrics to
properly compare its cost management and performance to other peers
that may have different capital structures and financing
strategies, particularly as it relates to financing primary
operating assets such as aircraft and engines. Additionally, the
Company believes these metrics are useful because they remove
certain items that may not be indicative of base operating
performance or future results. Adjusted CASM including net interest
and CASM including net interest are not determined in accordance
with GAAP, may not be comparable across all carriers and should not
be considered in isolation or as a substitute for performance
measures calculated in accordance with GAAP.
Reconciliation of CASM to CASM (excluding fuel),
Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM
including net interest and CASM including net interest
(unaudited)
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
($ in millions) |
|
Per ASM (¢) |
|
($ in millions) |
|
Per ASM (¢) |
CASM(a)(b) |
|
|
9.50 |
|
|
|
|
10.62 |
|
Aircraft fuel |
(1,130) |
|
|
(2.99) |
|
|
(1,160) |
|
|
(3.66) |
|
CASM (excluding
fuel)(c) |
|
|
6.51 |
|
|
|
|
6.96 |
|
Transaction and merger-related
costs, net |
(1) |
|
|
(0.01) |
|
|
(10) |
|
|
(0.03) |
|
Other operating costs - legal
fees |
(1) |
|
|
— |
|
|
— |
|
|
— |
|
Asset impairment |
— |
|
|
— |
|
|
(7) |
|
|
(0.02) |
|
Collective bargaining contract
ratification |
— |
|
|
— |
|
|
(2) |
|
|
(0.01) |
|
Adjusted CASM
(excluding fuel)(c) |
|
|
6.50 |
|
|
|
|
6.90 |
|
Aircraft fuel |
1,130 |
|
|
2.99 |
|
|
1,160 |
|
|
3.66 |
|
Adjusted
CASM(d) |
|
|
9.49 |
|
|
|
|
10.56 |
|
Net interest expense
(income) |
(35) |
|
|
(0.09) |
|
|
— |
|
|
— |
|
CARES Act – write-off of
deferred financing costs due to paydown of loan |
— |
|
|
— |
|
|
(7) |
|
|
(0.02) |
|
Adjusted CASM + net
interest(e) |
|
|
9.40 |
|
|
|
|
10.54 |
|
|
|
|
|
|
|
|
|
CASM |
|
|
9.50 |
|
|
|
|
10.62 |
|
Net interest expense
(income) |
(35) |
|
|
(0.10) |
|
|
— |
|
|
— |
|
CASM + net
interest(e) |
|
|
9.40 |
|
|
|
|
10.62 |
|
__________________(a) Cost per ASM figures may
not recalculate due to rounding.
(b) See “Reconciliation of Net Income (Loss) to
Adjusted Net Income (Loss) and Pre-Tax Income (Loss) to Adjusted
Pre-Tax Income (Loss)” above for discussion on adjusting items.
(c) CASM (excluding fuel) and adjusted CASM
(excluding fuel) are included as supplemental disclosures because
the Company believes that excluding aircraft fuel is useful to
investors as it provides an additional measure of management’s
performance excluding the effects of a significant cost item over
which management has limited influence. The price of fuel, over
which the Company has limited control, impacts the comparability of
period-to-period financial performance, and excluding allows
management an additional tool to understand and analyze the
Company's non-fuel costs and core operating performance, and
increases comparability with other airlines that also provide a
similar metric. CASM (excluding fuel) and adjusted CASM (excluding
fuel) are not determined in accordance with GAAP and should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP.
(d) Adjusted CASM is included as supplemental
disclosure because the Company believes it is a useful metric to
properly compare the Company’s cost management and performance to
other peers, as derivations of adjusted CASM are well-recognized
performance measurements in the airline industry that are
frequently used by the Company's management, as well as by
investors, securities analysts and other interested parties in
comparing the operating performance of companies in the airline
industry. Additionally, the Company believes this metric is useful
because it removes certain items that may not be indicative of base
operating performance or future results. Adjusted CASM is not
determined in accordance with GAAP, may not be comparable across
all carriers and should not be considered in isolation or as a
substitute for performance measures calculated in accordance with
GAAP.
(e) Adjusted CASM including net interest and
CASM including net interest are included as supplemental
disclosures because the Company believes they are useful metrics to
properly compare its cost management and performance to other peers
that may have different capital structures and financing
strategies, particularly as it relates to financing primary
operating assets such as aircraft and engines. Additionally, the
Company believes these metrics are useful because they remove
certain items that may not be indicative of base operating
performance or future results. Adjusted CASM including net interest
and CASM including net interest are not determined in accordance
with GAAP, may not be comparable across all carriers and should not
be considered in isolation or as a substitute for performance
measures calculated in accordance with GAAP.
Reconciliation of Net Income (Loss) per Share to
Adjusted Net Income (Loss) per
Share(unaudited)
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income (loss) per share, diluted, as
reported(a)(b) |
$ |
(0.17) |
|
|
$ |
0.18 |
|
|
$ |
(0.05) |
|
|
$ |
(0.17) |
|
Transaction and merger-related costs, net |
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.05 |
|
Other operating costs - legal fees |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Asset Impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.03 |
|
Collective bargaining contract ratification |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
CARES Act — write-off of deferred financing costs due to paydown of
loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.03 |
|
Tax benefit (expense), related to non-GAAP adjustments |
|
— |
|
|
|
(0.02) |
|
|
|
— |
|
|
|
(0.03) |
|
Valuation allowance |
|
0.17 |
|
|
|
— |
|
|
|
0.17 |
|
|
|
— |
|
Adjusted net income
(loss) per share, diluted(c) |
$ |
— |
|
|
$ |
0.17 |
|
|
$ |
0.12 |
|
|
$ |
(0.08) |
|
______________________(a) See “Reconciliation
of Net Income (Loss) to Adjusted Net Income (Loss) and Pre-Tax
Income (Loss) to Adjusted Pre-Tax Income (Loss)” above for
discussion on adjusting items.
(b) Cost per share figures may not recalculate
due to rounding.
(c) Adjusted net income (loss) per share is
included as a supplemental disclosure because the Company believes
it is a useful indicator of operating performance. Derivations of
net income are well-recognized performance measurements in the
airline industry that are frequently used by management, as well as
by investors, securities analysts and other interested parties in
comparing the operating performance of companies in the
industry.
Adjusted net income (loss) per share has limitations as an
analytical tool. Adjusted net income (loss) per share does not
reflect the impact of certain cash charges resulting from matters
the Company considers not to be indicative of ongoing operations
and does not reflect the cash expenditures, or future requirements,
for capital expenditures or contractual commitments, and other
companies in the industry may calculate Adjusted net income (loss)
per share differently than the Company does, limiting its
usefulness as a comparative measure. Because of these limitations,
Adjusted net income (loss) per share should not be considered in
isolation from or as a substitute for performance measures
calculated in accordance with GAAP. In addition, because
derivations of adjusted net income are not determined in accordance
with GAAP, such measures are susceptible to varying calculations
and not all companies calculate the measures in the same manner. As
a result, derivations of net income, including Adjusted net income
(loss) per share, as presented may not be directly comparable to
similarly titled measures presented by other companies. For the
foregoing reasons, Adjusted net income (loss) per share has
significant limitations which affect its use as an indicator of
profitability. Accordingly, you are cautioned not to place undue
reliance on this information.
Contacts:
Jennifer F. de la Cruz
Corporate Communications
Email: JenniferF.DeLaCruz@flyfrontier.com
Phone: 720.374.4207
David Erdman
Investor Relations
Email: David.Erdman@flyfrontier.com
Phone: 720.798.5886
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