Frontier Airlines has remained unabashedly bullish about the ultra-low cost business model in the US during the past year, as the weaker performance of budget airlines has triggered questions about their long term viability.
After several product pivots and a network revamp, Frontier is declaring itself as “the premier ULCC,” and believes that it can deliver double digit margins by mid-2025.
It’s a big gap to close, considering that Frontier’s forecast adjusted pre-tax margin for 4Q2024 is 0-2%.
Given the ample progress the airline needs to make, markets are likely to adopt a wait-and-see approach before rewarding Frontier with higher valuations.
