Dive Brief:
- Frontier Airlines is positioning itself for sustained growth with the forthcoming addition of first-class fares, Starlink Wi-Fi and investments in loyalty, executives said on a Q3 2026 earnings call Wednesday.
- The airline reported loyalty revenue growth of 37% year over year and overall revenue growth of 53% year over year, amounting to record overall revenue of about $1.4 billion, according to an earnings report.
- “We see further opportunities to increase revenue per passenger and build loyalty while maintaining the cost discipline that supports our low fares,” Chief Commercial Officer Bobby Schroeter said on the call. “The enhancement of premium products into the business will only improve the performance in the loyalty program.”
Dive Insight:
Despite Frontier’s revenue growth, the airline faced elevated fuel prices in the third quarter and widened its net loss from a year prior. It’s investing in premium offerings and loyalty to boost revenue and contribute to sustainable growth.
“These programs give customers more reason to choose Frontier and return more often, and they provide recurring revenue streams that diversify our revenue mix and support more resilient earnings,” Schroeter said.
Customer demand remains stable, even as fare revenue per passenger increased 71% year over year, and revenue per available seat mile increased 30% year over year. Fare increases still weren't enough to offset fuel prices, which increased 56% year over year, and Frontier reported a net loss of $104 million.
Schroeter sees the loyalty program over the next three to five years “creating a more stable, diversified revenue base for the airline,” Schroeter said.
In the third quarter, loyalty program revenue growth was supported by growth in co-brand card and membership programs, as well as higher engagement and spending.
To improve loyalty, the company is adding premium experiences and improving reliability. The airline is installing first-class seats this quarter and toward the end of the first quarter, the carrier will begin selling first-class fares. Starlink Wi-Fi installation begins in the first quarter.
At the beginning of the year, Frontier set about addressing operational roadblocks in the airline to create more reliability.
The goal is to “create that reliability in the customer's eyes, and that then will drive real loyalty into the business going forward, allied to the premium products that we're bringing in,” Schroeter said.
Despite the hit from higher fuel prices, Frontier is reaping the benefits of Spirit’s bankruptcy and subsequent shuttering. About 30% of the airline’s business overlapped with Spirit earlier this year.
“We positioned the airline very effectively earlier this year, to take advantage of continued reductions in capacity by Spirit Airlines,” Frontier CEO and President Jimmy Dempsey said on the earnings call. “We see supply-demand dynamics really positive across the business at the moment, both in ex-Spirit markets and just across the entire environment.”
