Frontier Group Holdings, Inc.: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8. “Financial Statements and Supplementary Data” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 18, 2025 (the “2024 Annual Report”).

Recent Developments

Macroeconomic Conditions. The Trump Administration is in the process of expanding the scope of tariffs, which has significantly increased the rates on goods imported into the United States. In response, foreign governments have imposed, and are expected to impose, retaliatory measures against the United States. These or additional changes in U.S. or international trade policies, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry, which may adversely impact our operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among other impacts.

Effective September 2025, the United States and European Union reached a trade agreement. The agreement, among other changes, included an exemption on tariffs for aircrafts and aircraft parts. We continue to monitor the situation and the related impacts to our business.

In July 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. We will continue to monitor the situation but do not believe this legislation will have a material impact on our income tax expense or materially change our effective income tax rate for 2025. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Beginning October 1, 2025, the most recent federal government shutdown began. The government shutdown is not expected to impede the eventual operation of our incoming aircraft, however there could be unforeseen delays as a result. Further, the shutdown may cause operational issues at airports resulting from lower attendance by air traffic controllers and Transportation Security Administration officers. We continue to monitor the situation and the related impacts to our business.

Labor. We are currently in negotiations with the unions which represent our pilots, flight attendants, material specialists, aircraft technicians and maintenance controllers regarding their next labor contracts. Please refer to “Notes to Condensed Consolidated Financial Statements — 8. Commitments and Contingencies” for additional information.

Pratt & Whitney. Since 2022, we have introduced aircraft into our fleet that use the Pratt & Whitney PW1100 Geared Turbo Fan (“GTF”) engine, and we have selected this engine for our planned future deliveries. During 2023, Pratt & Whitney announced the requirement, mandated by the U.S. Federal Aviation Administration, that certain engines be removed for inspection due to a possible condition in the powdered metal used to manufacture certain engine parts. This will require accelerated inspection of the PW1100 GTF engine, which we use for certain of our A320neo family aircraft, and could result in lengthy turnaround times to perform these inspections, including any resulting repairs or other modifications that may be identified. Although our operations have not been materially impacted as of September 30, 2025, this inspection program may have an adverse impact on our operations, particularly when we are required to temporarily take aircraft out of service. We continue to assess the impact on our future capacity plans.

Overview

The following table provides select financial and operational information for the three and nine months ended September 30, 2025 and 2024 (in millions, except for per share data):

Revenues

Total operating revenues for the three months ended September 30, 2025 totaled $886 million, a decrease of 5% compared to the three months ended September 30, 2024. This was primarily due to a 4% moderation in capacity, as measured by ASMs, as part of our disciplined capacity deployment, and a 2% decrease in revenue per available seat mile (“RASM”) for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The RASM decrease was driven by a 7% higher average stage length supported by 12% fewer departures, which also contributed to the 6% decrease in passenger enplanements, partly offset by the 2.7-point increase in load factor and 1% increase in total revenue per passenger, as compared to the corresponding prior year period.

Total operating revenues for the nine months ended September 30, 2025 totaled $2,727 million, a decrease of 2% compared to the nine months ended September 30, 2024. This was primarily due to a decrease in RASM of 1% driven by a 1% decrease in total revenue per passenger, as compared to the corresponding prior year period.

Operating Expenses

Total operating expenses during the three months ended September 30, 2025 increased to $963 million, resulting in a cost per available seat mile (“CASM”) of 9.95¢, an increase of 9%, as compared to the three months ended September 30, 2024. Fuel expense for the three months ended September 30, 2025 was $27 million lower than the corresponding prior year period. The 10% decrease in fuel expense for the three months ended September 30, 2025 was primarily driven by the 6% decrease in fuel gallons consumed as a result of our 4% capacity reduction, as well as the 5% decrease in fuel cost per gallon.

Our non-fuel expenses increased by 11% during the three months ended September 30, 2025, as compared to the corresponding prior year period, driven primarily by the benefit from a legal settlement in the prior period, higher employee benefit and incentive costs, and increased station costs due to station mix and rate inflation, partly offset by decreased operations from fewer departures and passengers. CASM (excluding fuel), a non-GAAP measure, increased 16% to 7.53¢, on a 4% decrease in capacity for the three months ended September 30, 2025, as compared to the corresponding prior year period based on the aforementioned factors.

Adjusted CASM (excluding fuel), a non-GAAP measure, increased from 6.89¢ for the three months ended September 30, 2024 to 7.53¢ for the three months ended September 30, 2025. There were no adjustments for the three months ended September 30, 2025. For the three months ended September 30, 2024, this excludes the impact of $38 million relating to the legal settlement.

Total operating expenses during the nine months ended September 30, 2025 increased to $2,925 million, resulting in a CASM of 9.77¢, an increase of 6% compared to the nine months ended September 30, 2024. Fuel expense for the nine months ended September 30, 2025 was $110 million lower than the corresponding prior year period. The 14% decrease in fuel expense for the nine months ended September 30, 2025 was driven by the 12% decrease in fuel cost per gallon and a 2% decrease in fuel gallons consumed.

Our non-fuel expenses increased 14% during the nine months ended September 30, 2025, as compared to the corresponding prior year period, driven primarily by increased aircraft rent due to a larger fleet, increased station costs due to station mix and rate inflation, a decrease in sale-leaseback transactions, increased employee costs, as well as the benefit from a legal settlement in the prior period, partly offset by lower lease return costs during the same period. CASM (excluding fuel), a non-GAAP measure, increased 15% to 7.42¢, while capacity remained consistent for the nine months ended September 30, 2025, as compared to the corresponding prior year based on the aforementioned factors.

Adjusted CASM (excluding fuel), a non-GAAP measure, increased from 6.60¢ for the nine months ended September 30, 2024 to 7.42¢ for the nine months ended September 30, 2025. There were no adjustments for the nine months ended September 30, 2025. For the nine months ended September 30, 2024, this excludes the impact of the $38 million relating to the legal settlement.

Net Income (Loss)

We generated a net loss of $77 million during the three months ended September 30, 2025, compared to net income of $26 million for the three months ended September 30, 2024. There were no non-GAAP adjustments for the three months ended September 30, 2025. Considering the aforementioned non-GAAP adjustments, as well as the write-off of $1 million in unamortized deferred financing costs, our adjusted net loss, a non-GAAP measure, was $11 million for the three months ended September 30, 2024.

We generated a net loss of $190 million during the nine months ended September 30, 2025, compared to net income of $31 million for the nine months ended September 30, 2024. There were no non-GAAP adjustments for the nine months ended September 30, 2025. Considering the aforementioned non-GAAP adjustments, as well as the $5 million valuation allowance and the write-off of $1 million in unamortized deferred financing costs, our adjusted net loss, a non-GAAP measure, was $1 million for the nine months ended September 30, 2024.

For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Results of Operations — Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” and “Results of Operations — Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR.”

Liquidity

As of September 30, 2025, our total available liquidity was $691 million, consisting of $561 million of unrestricted cash and cash equivalents and availability under our revolving line of credit (the “Revolving Loan Facility”).

Results of Operations

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Operating Revenues

Total operating revenue decreased $49 million, or 5%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily driven by 4% lower capacity, as measured by ASMs, and a 2% decrease to RASM. Strategic initiatives to stabilize pricing resulted in a moderation of capacity, which was driven by a 15% decrease in average daily aircraft utilization during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, partially offset by the 9% increase in average aircraft in service. The decrease in RASM was driven by 7% higher average stage length, supported by 12% fewer departures, partially offset by the 2.7-point increase in load factor and a 1% increase in total revenue per passenger, as compared to the corresponding prior year period.

Operating Expenses

N/M = Not meaningful

(a) Cost per ASM figures may not recalculate due to rounding.

(b) This metric is not calculated in accordance with GAAP. For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest.”

Aircraft Fuel. Aircraft fuel expense decreased by $27 million, or 10%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to the 6% decrease in fuel gallons consumed, driven by lower capacity, as well as a 5% decrease in fuel cost per gallon.

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $15 million, or 6%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was primarily due to higher employee benefit and incentive costs, as compared to the corresponding prior year period.

Aircraft Rent. Aircraft rent expense increased by $4 million, or 2%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs.

Station Operations. Station operations expense increased by $9 million, or 5%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to an increase in station mix and rate inflation, partially offset by a 6% decrease in passengers and 12% decrease in departures.

Maintenance, Materials and Repairs. Maintenance, materials and repair expense decreased by $1 million, or 2%, during the three months ended September 30, 2025, as compared to the three months ended September 30,

2024. This decrease was primarily due to lower engine repair costs from recognition of vendor credits, partially offset by the increase in aircraft repairs and materials costs, driven by the 9% increase to average aircraft in service.

Sales and Marketing. Sales and marketing expense decreased by $8 million or 17%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to a decrease in third-party distribution channel fees and a decrease in call center operation fees. The following table presents our distribution channel mix:

Depreciation and Amortization. Depreciation and amortization expense increased by $5 million, or 26%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily due to an increase in capital maintenance depreciation driven by our growing fleet.

Other Operating. Other operating resulted in an expense of $10 million during the three months ended September 30, 2025, compared to a net gain of $40 million during the three months ended September 30, 2024. This movement was primarily driven by a legal settlement gain of $40 million in the corresponding prior year period.

Other Income (Expense). Other income decreased by $7 million, or 88%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt and decreased interest income from lower balances in interest-bearing cash accounts, partially offset by greater capitalized interest.

Income Taxes. Our effective tax rate for the three months ended September 30, 2025 was an expense of 1.3% on a pre-tax loss, compared to an expense of 3.7% on pre-tax income for the three months ended September 30, 2024. The primary difference between the effective tax rate and the federal statutory rate was related to an increase in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Results of Operations

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Operating Revenues

Total operating revenue decreased $46 million or 2% during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Revenue was unfavorably impacted by the 1% decrease in RASM, driven by 3% higher average stage length, supported by 5% fewer departures, and a 1% decrease in total revenue per passenger, partially offset by the 1.9-point increase in load factor as compared to the corresponding prior year period. Capacity, as measured by ASMs, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, remained consistent due to the 10% increase in average aircraft in service, offset by an 11% decrease in average daily aircraft utilization.

Operating Expenses

N/M = Not meaningful

(a) Cost per ASM figures may not recalculate due to rounding.

(b) These metrics are not calculated in accordance with GAAP. For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest.”

Aircraft Fuel. Aircraft fuel expense decreased by $110 million, or 14%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily due to the 12% decrease in fuel cost per gallon, as well as a 2% decrease in fuel gallons consumed.

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $41 million, or 6%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was primarily due to higher crew and employee benefit and incentive costs, as compared to the corresponding prior year period.

Aircraft Rent. Aircraft rent expense increased by $53 million, or 11%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs.

Station Operations. Station operations expense increased by $67 million, or 14%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to an increase in station mix and rate inflation.

Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $6 million, or 4%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.

This increase was primarily due to the 10% increase in average aircraft in service, which resulted in higher aircraft repair and materials costs, partially offset by lower engine repair costs from recognition of vendor credits.

Sales and Marketing. Sales and marketing expense decreased by $15 million, or 11%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to the decrease in third-party distribution channel fees, call center operation fees, credit card fees and media advertising. The following table presents our distribution channel mix:

Depreciation and Amortization. Depreciation and amortization expense increased by $12 million, or 23%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to an increase in capital maintenance depreciation driven by our growing fleet.

Other Operating. Other operating resulted in an expense of $69 million during the nine months ended September 30, 2025, compared to a net gain of $42 million during the nine months ended September 30, 2024. This movement was primarily driven by the decrease in sale-leaseback gains, as a result of 9 aircraft inductions and 8 engine inductions subject to sale-leaseback transactions in the current period, compared to 17 aircraft inductions and 3 engine inductions subject to sale-leaseback transactions in the corresponding prior year period, as well as a legal settlement gain of $40 million during the nine months ended September 30, 2024.

Other Income (Expense). Other income decreased by $10 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt and decreased interest income from lower balances in interest-bearing cash accounts, partially offset by greater capitalized interest.

Income Taxes. Our effective tax rate for the nine months ended September 30, 2025 was an expense of 2.2%, compared to an expense of 11.4% for the nine months ended September 30, 2024, on pre-tax loss and pre-tax income for each of the respective periods. The primary difference between the effective tax rate and the federal statutory rate for the nine months ended September 30, 2025 was related to an increase in our valuation allowance relating to federal and state net operating losses. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest

($ in millions)

($ in millions)

(a) Cost per ASM figures may not recalculate due to rounding.

(b) CASM (excluding fuel) and Adjusted CASM (excluding fuel) are included as supplemental disclosures because we believe 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 we have limited control, impacts the comparability of period-to-period financial performance, and excluding the price of fuel allows management an additional tool to understand and analyze our 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.

(c) We reached a legal settlement with a former lessor for breach of contract for a total of $40 million. $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.

(d) Adjusted CASM is included as supplemental disclosure because we believe it is a useful metric to properly compare our 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 our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, we believe this metric is useful because it removes certain items that may not be indicative of our 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) In 2024, we reduced the capacity of the PDP Financing Facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs. This amount is a component of interest expense within our condensed consolidated statements of operations.

(f) Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our 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, we believe Adjusted CASM including net interest is useful because it removes certain items that may not be indicative of our 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

($ in millions)

($ in millions)

(a) Cost per ASM figures may not recalculate due to rounding.

(b) CASM (excluding fuel) and Adjusted CASM (excluding fuel) are included as supplemental disclosures because we believe 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 we have limited control, impacts the comparability of period-to-period financial performance, and excluding the price of fuel allows management an additional tool to understand and analyze our 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.

(c) We reached a legal settlement with a former lessor for breach of contract for a total of $40 million. $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.

(d) Adjusted CASM is included as supplemental disclosure because we believe it is a useful metric to properly compare our 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 our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, we believe this metric is useful because it removes certain items that may not be indicative of our 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) In 2024, we reduced the capacity of the PDP Financing Facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs. This amount is a component of interest expense within our condensed consolidated statements of operations.

(f) Adjusted CASM including net interest and CASM including net interest are included as supplemental disclosures because we believe they are useful metrics to properly compare our 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, we believe Adjusted CASM including net interest is useful because it removes certain items that may not be indicative of our 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) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR

(in millions)

(in millions)

(a) Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of pre-tax income (loss), net income (loss) and EBITDA are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry.

Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA have limitations as analytical tools. Some of the limitations applicable to these measures include: adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA, and adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness or possible cash requirements related to our warrants; 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; and other companies in our industry may calculate adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. Because of these limitations, adjusted pre-tax income (loss), adjusted net income (loss), 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 adjusted pre-tax income (loss), adjusted net income (loss), 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 pre-tax income (loss), net income (loss) and EBITDA, including adjusted pre-tax income (loss), adjusted net income (loss) and adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies.

For the foregoing reasons, each of adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA has significant limitations which affect its use as an indicator of our profitability. Accordingly, you are cautioned not to place undue reliance on this information.

(b) EBITDAR and adjusted EBITDAR are included as supplemental disclosures because we believe them to be 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 measure 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 measures of overall performance since they exclude aircraft rent, which is a normal, recurring cash operating expense that is necessary to operate our business. Accordingly, you are cautioned not to place undue reliance on this information.

(in millions)

(in millions)

(a) See “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” above for discussion of adjusting items.

(b) During the nine months ended September 30, 2024, we recorded a $5 million non-cash valuation allowance against our U.S. federal and state net operating loss deferred tax assets, which largely do not expire, mainly as a result of being in a three-year historical cumulative pre-tax loss position and due to the loss generated during the three months ended March 31, 2024, which has no impact on cash taxes and is not reflective of our effective tax rate for deductible net operating losses generated or actual cash tax obligations created. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Comparative Operating Statistics

The following table sets forth our operating statistics for the three and nine months ended September 30, 2025 and 2024. These operating statistics are provided because they are commonly used in the airline industry and, as such, allow readers to compare our performance against our results for the corresponding prior year period, as well as against the performance of our peers.

(a) Figures may not recalculate due to rounding. See “Glossary of Airline Terms” for definitions of terms used in this table.

(b) These metrics are not calculated in accordance with GAAP. For the reconciliation to corresponding GAAP measures, see “Results of Operations—Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest.”

(c) Stage-Length Adjusted (SLA) to 1,000 miles: Applicable Operating Statistic * Square root (stage length / 1,000).

Liquidity and Capital Resources

Overview

As of September 30, 2025, our total available liquidity was $691 million, consisting of $561 million of unrestricted cash and cash equivalents and funds available to be drawn under our Revolving Loan Facility. We had $668 million of total debt, net, of which $363 million is short-term and consists primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net is comprised of $419 million outstanding under our Pre-delivery Credit Facilities, $101 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), $75 million in outstanding borrowings under the Revolving Loan Facility in order to manage the timing of fleet deliveries heavily weighted to the fourth quarter of 2025 and timing of maintenance expenditures, $66 million in 10-year notes (collectively, the “PSP Promissory Notes”) from the U.S. Department of the Treasury (the “Treasury”) and $12 million in secured indebtedness for our headquarters building, partially offset by $5 million in deferred debt acquisition costs.

In connection with the term loan facility entered into with the Treasury in September 2020, which was repaid in full in February 2022, and the PSP Promissory Notes, we issued warrants (the “Warrants”) to purchase 3,117,940 shares of FGHI common stock at a weighted-average price of $6.95 per share. In June 2024, the Treasury sold all such Warrants to a financial institution. During the nine months ended September 30, 2025, 1,244,608 Warrants were exercised. We settled the exercises through a net share settlement of 248,893 shares of FGHI common stock and cash of less than $1 million. During the nine months ended September 30, 2025, 1,636,058 Warrants expired. As of September 30, 2025, Warrants to purchase 237,274 shares of FGHI common stock were outstanding and set to expire during 2026.

During the nine months ended September 30, 2024, we reached an agreement with one of our aircraft lessors which eliminated requirements to pay maintenance reserves held as collateral in advance of our required performance of major maintenance activities on our aircraft leases. As a result of the agreement, the lessor disbursed back to us previously paid aircraft maintenance deposits of approximately $104 million. As a result, we no longer have any aircraft maintenance deposits with any of our lessors.

We continue to monitor our covenant compliance with various parties, including, but not limited to, our lenders and credit card processors. As of the date of this report, we are in compliance with all of our covenants.

The following table presents the major indicators of our financial condition and liquidity as of:

($ in millions)

Use of Cash and Future Obligations

We expect to meet our cash requirements for the next twelve months through use of our available cash and cash equivalents, our debt facilities, cash flows from operating activities and sale-leaseback financing. We expect to meet our long-term cash requirements with cash flows from operating and financing activities, including, but not limited to, potential future borrowings under the Pre-delivery Credit Facilities, our Revolving Loan Facility and/or potential issuances of debt or equity. The Revolving Loan Facility also permits us to enter into additional indebtedness secured by our loyalty program and brand-related assets, to the extent such indebtedness is pari passu to that of the Revolving Loan Facility. Our primary uses of cash are for working capital, aircraft PDPs, debt repayments, and capital expenditures.

Our single largest capital commitment relates to the acquisition of aircraft. As of September 30, 2025, we operated all of our 166 aircraft under operating leases. PDPs relating to future deliveries under our agreement with Airbus are required at various times prior to each aircraft’s delivery date. As of September 30, 2025, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $476 million, had $419 million outstanding. As of September 30, 2025, we had $509 million of PDPs held by Airbus which have been partially financed by our Pre-delivery Credit Facilities.

As of September 30, 2025, we had a firm obligation to purchase 178 A320neo family aircraft and 31 additional spare engines to be delivered by 2031. Of our aircraft commitments, 30 had committed operating leases for deliveries occurring between 2025 and 2026. We intend to evaluate financing options for the remaining aircraft.

The following table summarizes current and long-term material cash requirements as of September 30, 2025, which we expect to fund primarily with operating and financing cash flows (in millions):

(a) Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of September 30, 2025, our Revolving Loan Facility’s outstanding borrowings maturing in 2027, our affinity card unsecured debt due through 2029, our building notes due through 2031, and the PSP Promissory Notes due through 2031. See “Notes to Condensed Consolidated Financial Statements — 5. Debt.”

(b) Represents interest and commitment fees on debt obligations and our Revolving Loan Facility.

(c) Represents gross cash payments related to our operating fixed lease obligations that are not subject to discount as compared to the obligations measured on our condensed consolidated balance sheets. See “Notes to Condensed Consolidated Financial Statements — 6. Operating Leases.”

(d) Represents purchase commitments for aircraft and engines. See “Notes to Condensed Consolidated Financial Statements — 8. Commitments and Contingencies.”

Cash Flows

The following table presents information regarding our cash flows in the nine months ended September 30, 2025 and 2024 (in millions):

Operating Activities

During the nine months ended September 30, 2025, net cash used in operating activities totaled $434 million, which was driven by a $190 million net loss, $172 million of outflows from changes in operating assets and liabilities, and $72 million of non-cash adjustments.

The $172 million of outflows from changes in operating assets and liabilities included:

• $179 million in increases in other long-term assets primarily driven by increases in capitalized maintenance, prepaid maintenance and capitalized interest;
• $28 million in increases in supplies and other current assets;
• $20 million in increases in accounts receivable;
• $7 million in decreases in other liabilities primarily driven by leased aircraft return accruals and other operational related accruals, partially offset by an increase in manufacturer credits; partially offset by
• $31 million in increases in accounts payable; and
• $31 million in increases in our air traffic liability primarily driven by increased bookings on higher volume and average fares, as well as increased sales in our membership programs.

Our net loss of $190 million was also adjusted by the following non-cash items to arrive at cash used in operating activities:

• $157 million in gains recognized on sale-leaseback transactions; partially offset by
• $65 million in depreciation and amortization;
• $16 million in stock-based compensation expense; and
• $4 million in deferred income tax expense.

During the nine months ended September 30, 2024, net cash used in operating activities totaled $169 million, which was driven by non-cash adjustments of $149 million and $51 million of outflows from changes in operating assets and liabilities, partially offset by $31 million of net income.

The $51 million of outflows from changes in operating assets and liabilities included:

• $142 million in increases in other long-term assets primarily driven by increases in prepaid maintenance, capitalized maintenance and supplier incentives; and
• $53 million in increases in accounts receivable primarily from a legal settlement; partially offset by
• $82 million in decreases in our capitalized aircraft maintenance deposits;
• $39 million in increases in our air traffic liability primarily driven by increased bookings, partially offset by lower fares on bookings;
• $17 million in increases in other liabilities driven primarily by leased aircraft return accruals and passenger taxes payable;
• $4 million in decreases in supplies and other current assets; and
• $2 million in increases in accounts payable.

Our net income of $31 million was also adjusted by the following non-cash items to arrive at cash used in operating activities:

• $218 million in gains recognized on sale-leaseback transactions; partially offset by
• $53 million in depreciation and amortization;
• $12 million in stock-based compensation expense;
• $3 million in deferred income tax expense; and
• $1 million loss on extinguishment of debt.

Investing Activities

During the nine months ended September 30, 2025, net cash used in investing activities totaled $158 million, driven by:

• $105 million in net outflows for PDP activity; and
• $53 million in cash outflows for capital expenditures.

During the nine months ended September 30, 2024, net cash used in investing activities totaled $46 million, driven by:

• $62 million in cash outflows for capital expenditures; and
• $1 million in cash outflows relating to other investing activity; partially offset by
• $17 million in net proceeds for PDP activity.

Financing Activities

During the nine months ended September 30, 2025, net cash provided by financing activities was $418 million, driven by:

• $354 million in cash proceeds from debt issuances, consisting of $205 million drawn on our Revolving Loan Facility, $148 million drawn on our Pre-delivery Credit Facilities, and $1 million drawn on our Barclays facility;
• $248 million in net proceeds received from sale-leaseback transactions; and
• $6 million in proceeds from the exercise of stock options; partially offset by
• $188 million in cash outflows from principal repayments on debt, which includes $130 million on our Revolving Loan Facility and $58 million on our Pre-delivery Credit Facilities; and
• $2 million in cash outflows for payments related to tax withholdings of share-based awards.

During the nine months ended September 30, 2024, net cash provided by financing activities was $182 million, primarily driven by:

• $418 million in cash proceeds from debt issuances, consisting of $386 million of net borrowings on our Pre-delivery Credit Facilities, $12 million in new borrowing on our building note and $20 million drawn on our Barclays facility;
• $185 million in net proceeds received from sale-leaseback transactions; and
• $1 million in proceeds from the exercise of stock options; partially offset by
• $420 million in cash outflows from principal repayments on debt, which includes $404 million on our Pre-delivery Credit Facilities and $16 million on our prior building note that reached maturity; and
• $2 million in cash outflows for payments related to tax withholdings of share-based awards.

As of September 30, 2025, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our results of operations, financial condition or cash flows.

Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2025. For information regarding our critical accounting policies and estimates, see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” included in Part II, Item 7 of our 2024 Annual Report.

Recently Adopted Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. This standard is intended to improve the operability and application of guidance related to capitalized software development costs and will become effective January 1, 2028. We are assessing the potential impact this ASU may have on our consolidated financial statements upon adoption.

See “Notes to Consolidated Financial Statements —1. Summary of Significant Accounting Policies” included in Part II, Item 8 of our 2024 Annual Report for a discussion of recent accounting pronouncements.

GLOSSARY OF AIRLINE TERMS

Set forth below is a glossary of industry terms:

“A320neo family” means, collectively, the Airbus series of single-aisle aircraft that feature the new engine option, including the A320neo and A321neo aircraft.

“Adjusted CASM” is a non-GAAP measure and means operating expenses, excluding special items, divided by ASMs. For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

“Adjusted CASM including net interest” or “Adjusted CASM + net interest” is a non-GAAP measure and means the sum of Adjusted CASM and net interest expense (income) excluding special items divided by ASMs. For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

“Adjusted CASM (excluding fuel)” is a non-GAAP measure and means operating expenses less aircraft fuel expense, excluding special items, divided by ASMs. For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

“Air traffic liability” means the value of tickets, unearned membership fees and other related fees sold in advance of travel.

“Ancillary revenue” means the sum of non-fare passenger revenue and other revenue.

“Available seat miles” or “ASMs” means seats (empty or full) multiplied by miles the seats are flown.

“Average aircraft in service” means the average number of aircraft used in flight operations, as calculated on a daily basis.

“Average daily aircraft utilization” means block hours divided by number of days in the period divided by average aircraft in service.

“Average stage length” means the average number of miles flown per flight segment.

“Block hours” means the number of hours during which the aircraft is in revenue service, measured from the time of gate departure before take-off until the time of gate arrival at the destination.

“CASM” or “unit costs” means operating expenses divided by ASMs.

“CASM (excluding fuel)” is a non-GAAP measure and means operating expenses less aircraft fuel expense, divided by ASMs.

“CASM including net interest” or “CASM + net interest” is a non-GAAP measure and means the sum of CASM and net interest expense (income) divided by ASMs.

“DOT” means the U.S. Department of Transportation.

“Fare revenue” consists of base fares for air travel, including miles redeemed under our frequent flyer program, unused and expired passenger credits, other redeemed or expired travel credits and revenue derived from charter flights.

“Fare revenue per passenger” means fare revenue divided by passengers.

“Load factor” means the percentage of aircraft seat miles actually occupied on a flight (RPMs divided by ASMs).

“Non-fare passenger revenue” consists of fees related to certain ancillary items such as baggage, service fees, seat selection, and other passenger-related revenue that is not included as part of base fares for travel.

“Non-fare passenger revenue per passenger” means non-fare passenger revenue divided by passengers.

“Other revenue” consists primarily of services not directly related to providing transportation, such as the advertising, marketing and brand elements of the FRONTIER Miles affinity credit card program, and commissions revenue from the sale of items such as rental cars and hotels.

“Other revenue per passenger” means other revenue divided by passengers.

“Passengers” means the total number of passengers flown on all flight segments.

“Passenger revenue” consists of fare revenue and non-fare passenger revenue.

“PDP” means pre-delivery deposit payments, which are payments required by aircraft manufacturers in advance of delivery of the aircraft.

“RASM” or “unit revenue” means total revenue divided by ASMs.

“Revenue passenger miles” or “RPMs” means the number of miles flown by passengers.

“Total ancillary revenue per passenger” means ancillary revenue divided by passengers.

“Total revenue per passenger” means the sum of fare revenue, non-fare passenger revenue, and other revenue (collectively, “Total Revenue”) divided by passengers.

There have been no material changes in market risk from the information provided in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk”, in our 2024 Annual Report.

Evaluation of Disclosure Controls and Procedures

Management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the “Exchange Act”), refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

During the three months ended September 30, 2025, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the risk factors disclosed in Item 1A “Risk Factors” contained in our 2024 Annual Report. Investors are urged to review all such risk factors carefully.