Ultra-low-cost airlines Spirit and Frontier are predicting losses for the third quarter. Frontier said Wednesday that its expected third-quarter profit has instead turned to red ink as "sales have been trending below historical seasonality patterns" in recent weeks.
"You’ve gone from industry sales being up, to flat, to now being down versus 2019, and that’s coming at a time that capacity is going up," Frontier CEO Barry Biffle said Wednesday at a Morgan Stanley investor conference. "And then the third leg of that stool is fuel. So you’ve got fuel, capacity and demand all going the wrong direction."
American Airlines also trimmed its earnings guidance, with quarterly income of no more than 30 cents per share, 68% below the high-end target it issued in July. American cited the jump in fuel prices and the cost of its new pilot contract as factors contributing to the decline.
Jet fuel prices have risen about 30% since early July. Airlines from Southwest to JetBlue to Spirit and Frontier all have been eager to boost flying this year, and into next, to recover capacity lost from the pandemic and as a means to lower their unit costs. (More seats provide a larger base across which an airline spreads non-fuel costs.)