Frontier Group Holdings, Inc. (ULCC)

CIK: 0001670076. SIC: 4512 Air Transportation, Scheduled. Latest 10-K as of: 2026-02-18.

SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > SIC Major Group 45 > SIC 4512 Air Transportation, Scheduled

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1670076. Latest filing source: 0001670076-26-000020.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001670076.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001670076.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001670076-26-000051.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-05. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, 2025, which was filed with the SEC on February 18, 2026 (the “2025 Annual Report”).

Recent Developments

Macroeconomic Conditions. In February 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not give the President the authority to impose tariffs and therefore any tariffs imposed by President Trump under the IEEPA were not authorized. Subsequently, the Trump Administration imposed a new 10% across-the-board surcharge on imports. Additionally, effective September 2025, the United States and European Union reached a trade agreement. The agreement, among other changes, included an exemption on tariffs for aircraft and aircraft parts. We continue to monitor the situation and the related impacts to our business.

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.

Recent geopolitical tensions and military conflict in the Middle East, including developments involving Iran, have contributed to volatility in global energy markets. Higher crude oil prices can increase our jet fuel costs, which we experienced during the three months ended March 31, 2026. In addition, related instability may create supply chain challenges affecting aircraft parts and other operational inputs. Continued uncertainty or further escalation could pressure our operating costs and negatively affect our financial performance. 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, and aircraft technicians regarding their next labor contracts. Please refer to “Notes to Condensed Consolidated Financial Statements — 8. Commitments and Contingencies” for additional information.

Legal/Regulatory. During 2025, we obtained a revised preliminary assessment in the amount of $133 million related to the applicability of federal excise tax to certain optional ancillary products and services. We established reserves for certain fees subject to the assessment where we believe a loss for this matter is probable and estimable and we are contesting the assessment.

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We previously received an immaterial audit assessment from the U.S. Transportation Security Administration (the “TSA”) that covered the third quarter of 2016 through the fourth quarter of 2018 and related to the remittance of TSA fees where flight credits expired unused (the “2016-2018 Audit”). We appealed this assessment to the United States Tenth Circuit Court of Appeals. In addition, we are under audit by the TSA for the period from the fourth quarter of 2019 through the fourth quarter of 2022 (the “2019-2022 Audit”). In April 2026, we lost our appeal regarding the 2016-2018 Audit and received a preliminary assessment for the 2019-2022 Audit in the amount of $42 million, which mainly covered remittance of TSA fees where flight credits expired unused as well as for other passengers that purchased tickets and did not travel. As of March 31, 2026, we recorded an additional estimated liability of $77 million (the “TSA Reserve”), which is largely related to remittance of TSA fees for passengers that purchased tickets and did not travel and is included in other current liabilities and other long-term liabilities on our condensed consolidated balance sheets and in passenger revenues within our condensed consolidated statements of operations. We could be subject to further TSA audit examinations and resulting assessments.

Fleet. In March 2026, we entered into an agreement (the “Early Return Agreement”) to terminate the leases associated with 24 A320neo aircraft, expected to be completed by the second quarter of 2026. For the three months ended March 31, 2026, we recognized $139 million of operating expenses related to the Early Return Agreement, which includes one-time charges for lease return costs and costs related to the write-off of non-recoverable capitalized prepaid maintenance and accelerated depreciation of capitalized maintenance. Please refer to “Notes to Condensed Consolidated Financial Statements — 6. Operating Leases” for additional information.

Overview

The following table provides select financial and operational information for the three months ended March 31, 2026 and 2025 (in millions):

Three Months Ended March 31,

Change

2026

2025

Total operating revenues

$

992 

$

912 

9 

%

Total operating expenses

$

1,275 

$

958 

33 

%

Pre-tax income (loss)

$

(281)

$

(40)

603 

%

Adjusted pre-tax income (loss)

$

(69)

$

(40)

73 

%

Available seat miles (“ASMs”)

9,809 

9,949 

(1)

%

Earnings (loss) per share, diluted

$

(1.18)

$

(0.19)

521 

%

Revenues

Total operating revenues for the three months ended March 31, 2026 totaled $992 million, an increase of 9% compared to the three months ended March 31, 2025. Revenue per available seat mile (“RASM”), increased by 10% driven by a 2% increase in total revenue per passenger as compared to the corresponding prior year period, alongside a 3.5-point increase in load factor. Capacity, as measured by ASMs, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, decreased by 1%.

Adjusted RASM, a non-GAAP measure, increased from $9.17 during the three months ended March 31, 2025 to $10.86 during the three months ended March 31, 2026. For the three months ended March 31, 2026, this excludes the impact of $73 million related to the TSA Reserve associated with prior periods. There were no adjustments for the three months ended March 31, 2025.

Operating Expenses

Total operating expenses during the three months ended March 31, 2026 increased to $1,275 million, resulting in a cost per available seat mile (“CASM”) of 13.00¢, an increase of 35%, as compared to the three months ended March 31, 2025. Fuel expense for the three months ended March 31, 2026 was $30 million higher than the

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corresponding prior year period. The 13% increase in fuel expense for the three months ended March 31, 2026 was primarily driven by the 13% increase in fuel cost per gallon.

Our non-fuel expenses increased by 40% during the three months ended March 31, 2026, as compared to the corresponding prior year period, driven primarily by expenses related to the Early Return Agreement, higher rent expense due to increased lease return costs and larger fleet, and higher employee costs. CASM (excluding fuel), a non-GAAP measure, increased 42% to 10.27¢, on a 1% decrease in capacity, for the three months ended March 31, 2026, as compared to the corresponding prior year period, due to the aforementioned drivers of increased non-fuel expenses.

Adjusted CASM (excluding fuel), a non-GAAP measure, increased from 7.24¢ for the three months ended March 31, 2025 to 8.85¢ for the three months ended March 31, 2026. For the three months ended March 31, 2026, this excludes the impact of $139 million in expenses relating to the Early Return Agreement. There were no adjustments for the three months ended March 31, 2025.

Net Income (Loss)

We generated a net loss of $272 million during the three months ended March 31, 2026, compared to net loss of $43 million for the three months ended March 31, 2025. Considering the aforementioned non-GAAP adjustments and related $8 million of tax impacts, our adjusted net loss, a non-GAAP measure, was $68 million for the three months ended March 31, 2026. There were no non-GAAP adjustments for the three months ended March 31, 2025.

For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Results of Operations — “Reconciliation of GAAP to Non-GAAP Financial Data.”, “Reconciliation of Passenger Revenue to Adjusted Passenger Revenue”, 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 March 31, 2026, our total available liquidity was $974 million, consisting of $754 million of unrestricted cash and cash equivalents and availability under our revolving line of credit (the “Revolving Loan Facility”).

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Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Operating Revenues

Three Months Ended March 31,

Change

2026

2025

Operating revenues ($ in millions):

Passenger

$

952 

$

884 

$

68

8 

%

Other

40 

28 

12

43 

%

Total operating revenues

$

992 

$

912 

$

80

9 

%

Operating statistics:

ASMs (millions)

9,809

9,949

(140)

(1)

%

Revenue passenger miles (“RPMs”) (millions)

7,686

7,454

232

3 

%

Average stage length (miles)

899

925

(26)

(3)

%

Load factor

78.4%

74.9%

3.5 pts

N/A

RASM (¢)

10.11

9.17

0.94

10 

%

Total ancillary revenue per passenger ($)

65.24

71.72

(6.48)

(9)

%

Total revenue per passenger ($)

119.17

116.33

2.84

2 

%

Adjusted RASM (¢)(a)

10.86

9.17

1.69

18 

%

Adjusted total ancillary revenue per passenger ($)(a)

72.50

71.72

0.78

1 

%

Adjusted total revenue per passenger ($)(a)

127.95

116.33

11.62

10 

%

Passengers (thousands)

8,324

7,839

485

6 

%

__________________

(a)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 GAAP to Non-GAAP Financial Data.”

Total operating revenue increased $80 million, or 9%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Revenue was favorably impacted by the 10% increase in RASM, driven by a 2% increase in total revenue per passenger as compared to the corresponding prior year period, alongside a 3.5-point increase in load factor. Revenue was unfavorably impacted by $77 million related to the TSA Reserve during the three months ended March 31, 2026. In addition, capacity, as measured by ASMs, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, decreased by 1% primarily due to a 12% decrease in average daily aircraft utilization partially offset by the 14% increase in average aircraft in service.

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Operating Expenses

Three Months Ended March 31,

Change

Cost per ASM

Change

2026

2025

2026

2025

Operating expenses ($ in millions):(a)

Aircraft fuel

$

268 

$

238 

$

30 

13 

%

2.73 

 ¢

2.39 

 ¢

14 

%

Salaries, wages and benefits

271 

249 

22 

9 

%

2.76 

2.50 

10 

%

Aircraft rent

265 

161 

104 

65 

%

2.70 

1.62 

67 

%

Station operations

192 

180 

12 

7 

%

1.96 

1.81 

8 

%

Maintenance, materials and repairs

142 

51 

91 

178 

%

1.45 

0.51 

184 

%

Sales and marketing

43 

41 

2 

5 

%

0.44 

0.41 

7 

%

Depreciation and amortization

62 

20 

42 

210 

%

0.63 

0.20 

215 

%

Other operating

32 

18 

14 

78 

%

0.33 

0.19 

74 

%

Total operating expenses

$

1,275 

$

958 

$

317 

33 

%

13.00 

¢

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-18. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. Our discussion and analysis of fiscal year 2025 compared to fiscal year 2024 is included herein. For a discussion of the results of operations for fiscal year 2023 and comparisons between fiscal year 2024 and fiscal year 2023, please refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” 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.

Overview

The following table provides select financial and operational information for the years ended December 31, 2025 and 2024 (in millions, except percentages):

Year Ended December 31,

Change

2025

2024

Total operating revenues

$

3,724 

$

3,775 

(1)

%

Total operating expenses

$

3,873 

$

3,717 

4 

%

Income (loss) before income taxes

$

(134)

$

86 

N/M

Available seat miles (“ASMs”)

39,754 

39,871 

— 

%

Earnings (loss) per share, diluted

$

(0.60)

$

0.37 

N/M

Revenues

Total operating revenues for the year ended December 31, 2025 totaled $3,724 million, a decrease of 1% compared to the year ended December 31, 2024. Revenue per available seat mile (“RASM”) decreased by 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 year ended December 31, 2025 increased to $3,873 million, resulting in a cost per available seat mile (“CASM”) of 9.74¢, an increase of 5% compared to the year ended December 31, 2024. Fuel expense was $112 million lower, as compared to the corresponding prior year period. This 11% decrease in fuel expense for the year ended December 31, 2025 was primarily driven by a 10% decrease in fuel cost per gallon, as well as the 2% decrease in fuel gallons consumed.

Our non-fuel expenses increased by 10% during the year ended December 31, 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, increased employee costs, and the benefit from a legal settlement in the prior period, partially offset by lower lease return costs during the same period. CASM (excluding fuel), a non-GAAP measure, increased 10% to 7.41¢, while capacity remained consistent, for the year ended December 31, 2025, as compared to the corresponding prior year period, due to the aforementioned drivers of increased non-fuel expenses.

Adjusted CASM (excluding fuel), a non-GAAP measure, increased from 6.81¢ for the year ended December 31, 2024 to 7.41¢ for the year ended December 31, 2025. There were no adjustments for the year ended December 31, 2025. For the year ended December 31, 2024, Adjusted CASM (excluding fuel) excludes the impact of $38 million related to a legal settlement.

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Net Income (Loss)

We generated a net loss of $137 million during the year ended December 31, 2025, compared to a net income of $85 million for the year ended December 31, 2024. There were no non-GAAP adjustments for the year ended December 31, 2025. Considering the aforementioned non-GAAP adjustments and the $5 million valuation allowance and the write-off of $1 million in unamortized deferred financing costs for the year ended December 31, 2024, our adjusted net income, a non-GAAP measure, was $53 million for the year ended December 31, 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 December 31, 2025, our total available liquidity was $874 million, consisting of $654 million of unrestricted cash and cash equivalents and availability of $220 million under our revolving line of credit (the “Revolving Loan Facility”).

Trends and Uncertainties Affecting Our Business

We believe our operating and business performance is driven by various factors that typically affect airlines and their markets, including trends which affect the broader travel industry, as well as trends which affect the specific markets and customer base that we target. The following key factors may affect our future performance:

Competition. The airline industry is highly competitive. The principal competitive factors in the airline industry are the fare and total price, flight schedules, number of routes served from a city, frequent flyer programs, product and passenger amenities, customer service, fleet type and reputation. The airline industry is particularly susceptible to price discounting as once a flight is scheduled, airlines incur only nominal incremental costs to provide service to passengers occupying otherwise unsold seats. Price competition occurs on a route-by-route basis through price discounts, changes in pricing structures, fare matching, target promotions and frequent flyer initiatives. Airlines typically use discount fares and other promotions to stimulate traffic during normally slower travel periods to generate cash flow and to maximize RASM. The prevalence of discount fares can be particularly acute when a competitor has excess capacity that it is under financial pressure to sell. A key element of our competitive strategy is to maintain very low unit costs in order to permit us to compete successfully in price-sensitive markets. In addition, some of the legacy network carriers match LCC and ULCC pricing on portions of their network, including through the selective deployment of so-called “basic economy” fares. We believe that fare discounts, along with more customer optionality over product offerings and enhancements to our frequent flyer program, have and will continue to stimulate demand for Frontier.

Our strategy is underpinned by our low-cost structure, and has significantly reduced our cost base by optimizing aircraft utilization to align capacity with expected travel demand patterns, transitioning to larger and more fuel-efficient aircraft, maximizing seat density, renegotiating the majority of our distribution agreements, realigning and simplifying our network, enhancing our website and mobile app, boosting employee productivity and contracting with leading specialists to provide us with select operating and other services.

We believe that we are well positioned to maintain our low unit operating costs relative to our competitors through on-going strategic initiatives, including continuing our cost optimization efforts, planned increases in aircraft utilization and further realizing economies of scale. To the extent that we are unable to maintain our low-cost structure, our ability to compete effectively may be impaired. In addition, if our competitors engage in fare wars or similar behavior, our financial performance could be adversely impacted.

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Aircraft Fuel. Fuel expense represents one of the single largest operating expense for most airlines, including ours. Aircraft fuel prices and availability are subject to market fluctuations, refining capacity, periods of market surplus and shortage and demand for heating oil, gasoline and other petroleum products, as well as meteorological, economic and political factors and events occurring throughout the world, which we can neither control nor accurately predict. The future cost and availability of aircraft fuel cannot be predicted with any degree of certainty.

Volatility. The air transportation business is volatile and highly affected by economic cycles and trends. Global pandemics and related health scares, consumer confidence and discretionary spending, fear of terrorism or war, weakening economic conditions, fare initiatives, fluctuations in fuel prices, labor actions, changes in governmental regulations on taxes and fees, weather and other factors have resulted in significant fluctuations in revenue and results of operations in the past.

Seasonality. Our results of operations for any interim period are not necessarily indicative of those for the entire year because the air transportation business and our route network are subject to seasonal fluctuations. We generally expect demand to be greater in the summer months and less in the winter months, apart from the holiday season. As we increase our routes in other markets, we have reduced our concentration in Denver to decrease the impact of seasonality in our business. During the year ended December 31, 2025, 21% of our flights had Denver International Airport as either their origin or destination, as compared to 23% of our flights during the year ended December 31, 2024.

Labor. The airline industry is heavily unionized. The wages, benefits and work rules of unionized airline industry employees are determined by collective bargaining agreements (“CBAs”). Relations between air carriers and labor unions in the United States are governed by the United States Railway Labor Act (“RLA”). Under the RLA, CBAs generally contain “amendable dates” rather than expiration dates and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the National Mediation Board (“NMB”). This process continues until either the parties have reached an agreement on a new CBA or the parties have been released to “self-help” by the NMB. In most circumstances, the RLA prohibits strikes. However, after release by the NMB, carriers and unions are free to engage in self-help measures such as lockouts and strikes.

We have seven union-represented employee groups comprising approximately 86% of our employees as of December 31, 2025. Our pilots are represented by the Air Line Pilots Association (“ALPA”); our flight attendants are represented by the Association of Flight Attendants (“AFA-CWA”); our aircraft technicians, aircraft appearance agents, material specialists and maintenance controllers are all represented by the International Brotherhood of Teamsters (“IBT”); and our dispatchers are represented by the Transport Workers Union (“TWU”). We are currently in negotiations with the ALPA, AFA-CWA, and aircraft technicians represented by IBT regarding the next labor contract. Please refer to “Notes to Consolidated Financial Statements — 11. Commitments and Contingencies” for additional information.

Maintenance, Materials and Repairs and Maintenance Reserve Obligations. The amount of total maintenance costs and related depreciation of heavy maintenance expense is subject to variables such as estimated usage, government regulations, the size, age and makeup of the fleet in future periods, and the level of unscheduled maintenance events and their actual costs. Accordingly, we cannot reliably quantify future maintenance-related expenses for any significant period of time.

As of December 31, 2025, the average age of our aircraft was approximately five years and all of the aircraft in our fleet were financed with operating leases, the last of which is scheduled to expire in 2037. Please refer to “Notes to Consolidated Financial Statements — 8. Operating Leases” for further discussion. We expect that these new aircraft will require less maintenance when they are first placed into service (sometimes called a “maintenance holiday”) because the aircraft will benefit from manufacturer warranties and also will be able to operate for a significant period of time, generally measured in years, before the most expensive scheduled maintenance obligations, known as heavy maintenance, are required. Once these maintenance holidays expire, these aircraft will require more maintenance as they age and our maintenance and repair expenses for each of our aircraft will be incurred at approximately the same intervals. When these more significant maintenance activities occur, this will

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result in out-of-service periods during which our aircraft are dedicated to maintenance activities and unavailable to generate revenue.

We account for heavy maintenance under the deferral method. Accordingly, heavy maintenance is depreciated over the shorter of either the remaining lease term or the period until the next estimated heavy maintenance event. As a result, maintenance events occurring closer to the end of the lease term will generally have shorter depreciation periods than those occurring earlier in the lease term. This will create higher depreciation expense specific to any aircraft related to heavy maintenance during the final years of the lease as compared to earlier periods.

Recent Developments

Macroeconomic Conditions. The U.S. government is in the process of expanding the scope of tariffs, which have 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.

During 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.

Financing. During 2025, we entered into multiple transactions to provide additional cash available for general purposes. We issued approximately $105 million of class A-1 enhanced equipment trust certificates (“2025-1 EETCs”), which are secured by liens on substantially all of our spare parts and tooling. In addition, we amended our Revolving Loan Facility, which now provides for $220 million of total commitments. We continue to utilize sale-leaseback transactions related to our aircraft and engines which generated $441 million of cash proceeds in 2025.

Labor. During 2025, we entered into new contracts with our aircraft appearance agents, material specialists, and maintenance controllers, effective for five years, respectively. We are currently in negotiations with the unions which represent our pilots, flight attendants, and aircraft technicians regarding their next labor contracts. Please refer to “Notes to Consolidated Financial Statements — 11. Commitments and Contingencies” for additional information.

Legal/Regulatory. During 2025, we obtained a revised preliminary assessment in the amount of $133 million related to the applicability of federal excise tax to certain optional ancillary products and services. We established reserves for certain fees subject to the assessment where we believe a loss for this matter is probable and estimable. We are contesting the assessment.

Product. During 2025, we implemented various enhanced benefits related to our frequent flyer program including: free seat upgrades for Elite Gold members and above (including First Class Seating (“First Seats”), available in 2026), priority boarding for our loyalty members, options to redeem FRONTIER Miles for bundles, For Less price guarantee, and no change or cancel fees on bundles.

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 impacted as of December 31, 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 do not anticipate this impacting our future capacity.

64

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Operating Revenues

Year Ended December 31,

Change

2025

2024

Operating revenues ($ in millions):

Passenger

$

3,598

$

3,683

$

(85)

(2)

%

Other

126

92

34 

37 

%

Total operating revenues

$

3,724

$

3,775

$

(51)

(1)

%

Operating statistics:

ASMs (millions)

39,754

39,871

(117)

— 

%

Revenue passenger miles (RPMs) (millions)

31,187

30,630

557

2 

%

Average stage length (miles)

919

894

25

3 

%

Load factor

78.4 

%

76.8 

%

1.6 

pts

N/A

RASM (¢)

9.37

9.47

(0.10)

(1)

%

Total ancillary revenue per passenger ($)

67.57

70.29

(2.72)

(4)

%

Total revenue per passenger ($)

112.17

113.38

(1.21)

(1)

%

Passengers (thousands)

33,200

33,296

(96)

— 

%

Total operating revenues decreased $51 million, or 1%, during the year ended December 31, 2025, as compared to the year ended December 31, 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 1.6-point increase in load factor compared to the corresponding prior year period. Capacity, as measured by ASMs, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, remained consistent due to an 11% increase in average aircraft in service, offset by an 11% decrease in average daily aircraft utilization.

65

Operating Expenses

Year Ended December 31,

Change

Cost per ASM

Change

2025

2024

2025

2024

Operating expenses ($ in millions):(a)

Aircraft fuel

$

929 

$

1,041 

$

(112)

(11)

%

2.33 

 ¢

2.61 

 ¢

(11)

%

Salaries, wages and benefits

1,016 

954 

62 

6 

%

2.56 

2.39 

7 

%

Aircraft rent

748 

675 

73 

11 

%

1.88 

1.69 

11 

%

Station operations

717 

637 

80 

13 

%

1.80 

1.60 

13 

%

Maintenance, materials and repairs

209 

209 

— 

— 

%

0.53 

0.52 

2 

%

Sales and marketing

159 

178 

(19)

(11)

%

0.40 

0.45 

(11)

%

Depreciation and amortization

91 

72 

19 

26 

%

0.23 

0.18 

28 

%

Other operating expenses

4 

(49)

53 

N/M

0.01 

(0.12)

N/M

Total operating expenses

$

3,873 

$

3,717 

$

156 

4 

%

9.74 

¢

9.32 

¢

5 

%

Operating statistics:

ASMs (millions)

39,754 

39,871 

(117)

— 

%

Average stage length (miles)

919 

894 

25 

3 

%

Passengers (thousands)

33,200 

33,296 

(96)

— 

%

Departures

205,622 

216,374 

(10,752)

(5)

%

CASM (excluding fuel) (¢) (b)

7.41 

6.71 

0.70 

10 

%

Adjusted CASM (excluding fuel) (¢) (b)

7.41 

6.81 

0.60 

9 

%

Fuel cost per gallon ($)

2.47 

2.73 

(0.26)

(10)

%

Fuel gallons consumed (thousands)

375,527 

381,444 

(5,917)

(2)

%

________________

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 $112 million, or 11%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease was primarily due to a 10% decrease in fuel cost per gallon, as well as a 2% decrease in gallons consumed.

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $62 million, or 6%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase was primarily due to higher crew, employee benefits and incentives, and salary costs, as compared to the corresponding prior year period.

Aircraft Rent. Aircraft rent expense increased by $73 million, or 11%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs.

Station Operations. Station operations expense increased by $80 million, or 13%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to increase in station mix and rate inflation, partially offset by 5% fewer departures.

Maintenance, Materials and Repairs. Maintenance, materials and repair expense remained consistent during the year ended December 31, 2025, as compared to the year ended December 31, 2024. This was primarily due to the

66

11% 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 $19 million, or 11%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to decreases in third-party distribution channel fees, call center operation fees and credit card fees. The following table presents our distribution channel mix:

Year Ended December 31,

Change

Distribution Channel

2025

2024

Our website, mobile app and other direct channels

70 

%

72 

%

(2)

 pt

Third-party channels

30 

%

28 

%

2 

 pt

Depreciation and Amortization. Depreciation and amortization expense increased by $19 million, or 26%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to an increase in capitalized maintenance depreciation driven by our growing fleet.

Other Operating. Other operating resulted in an expense of $4 million during the year ended December 31, 2025, compared to a net gain of $49 million during the year ended December 31, 2024. This movement was primarily driven by a legal settlement gain of $40 million during the year ended December 31, 2024, as well as increases to travel, taxes, insurance, and IT costs, partially offset by the increase in sale-leaseback gains compared to the corresponding prior year period.

Other Income (Expense). Other income decreased by $13 million, or 46%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt and decreased interest income from lower interest-bearing cash accounts, partially offset by greater capitalized interest.

Income Taxes. Our effective tax rate for the year ended December 31, 2025 was an expense of 2.2%, compared to an expense of 1.2% for the year ended December 31, 2024, on pre-tax loss and income, respectively. The primary difference between the effective tax rate and the federal statutory rate for the year ended December 31, 2025 was related to an increase in our valuation allowance relating to federal and state net operating losses (“NOLs”).

67

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

Year Ended December 31,

2025

2024

($ in millions)

Per ASM (¢)

($ in millions)

Per ASM (¢)

Non-GAAP financial data:(a)

CASM

9.74 

9.32 

Aircraft fuel

(929)

(2.33)

(1,041)

(2.61)

CASM (excluding fuel)(b)

7.41 

6.71 

Legal settlement(c)

— 

— 

38 

0.10 

Adjusted CASM (excluding fuel)(b)

7.41 

6.81 

Aircraft fuel

929 

2.33 

1,041 

2.61 

Adjusted CASM(d)

9.74 

9.42 

Net interest expense (income)

(15)

(0.04)

(28)

(0.07)

Write-off of deferred financing costs(e)

— 

— 

(1)

— 

Adjusted CASM + net interest(f)

9.70 

9.35 

CASM

9.74 

9.32 

Net interest expense (income)

(15)

(0.04)

(28)

(0.07)

CASM + net interest(f)

9.70 

9.25 

__________________

(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 (please refer to “Notes to Consolidated Financial Statements — 11. Commitments and Contingencies” for additional information). $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 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 September 2024, we reduced the capacity of the pre-delivery deposit payments (“PDPs”) 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 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 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.

68

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

Year Ended December 31,

2025

2024

(in millions)

Non-GAAP financial data (unaudited):

Adjusted pre-tax income (loss)(a)

$

(134)

$

49 

Adjusted net income (loss)(a)

$

(137)

$

53 

EBITDA(a)

$

(58)

$

130 

EBITDAR(b)

$

690 

$

805 

Adjusted EBITDA(a)

$

(58)

$

92 

Adjusted EBITDAR(b)

$

690 

$

767 

__________________

(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; 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 a supplemental disclosure 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 a measure 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.

69

Year Ended December 31,

2025

2024

(in millions)

Adjusted net income (loss) reconciliation (unaudited):

Net income (loss)

$

(137)

$

85 

Non-GAAP Adjustments(a):

Legal settlement

— 

(38)

Write-off of deferred financing costs

— 

1 

Pre-tax impact

— 

(37)

Tax benefit (expense) related to non-GAAP adjustments

— 

— 

Valuation allowance(b)

— 

5 

Net income (loss) impact

$

— 

$

(32)

Adjusted net income (loss)

$

(137)

$

53 

Adjusted pre-tax income (loss) reconciliation (unaudited):

Income (loss) before income taxes

$

(134)

$

86 

Pre-tax impact

— 

(37)

Adjusted pre-tax income (loss)

$

(134)

$

49 

70

Year Ended December 31,

2025

2024

(in millions)

EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR reconciliation (unaudited):

Net income (loss)

$

(137)

$

85 

Plus (minus):

Interest expense

46 

36 

Capitalized interest

(35)

(32)

Interest income and other

(26)

(32)

Income tax expense (benefit)

3 

1 

Depreciation and amortization

91 

72 

EBITDA

(58)

130 

Plus: Aircraft rent

748 

675 

EBITDAR

$

690 

$

805 

EBITDA

$

(58)

$

130 

Plus (minus)(a):

Legal settlement

— 

(38)

Adjusted EBITDA

(58)

92 

Plus: Aircraft rent

748 

675 

Adjusted EBITDAR

$

690 

$

767 

__________________

(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 on adjusting items.

(b)During the year ended December 31, 2024, we recorded a $5 million non-cash valuation allowance against our U.S. federal and state NOL deferred tax assets, which largely do not 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 our effective tax rate for deductible NOLs generated or actual cash tax obligations created. Please refer to “Notes to Consolidated Financial Statements — 13. Income Taxes” for additional information.

71

Comparative Operating Statistics

The following table sets forth our operating statistics for the years ended December 31, 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.

Year Ended December 31,

2025

2024

Change

Operating statistics (unaudited)(a)

Available Seat Miles (“ASMs”) (millions)

39,754

39,871

— 

%

Departures

205,622

216,374

(5)

%

Average stage length (miles)

919

894

3 

%

Block hours

541,304

554,399

(2)

%

Average aircraft in service

162

146

11 

%

Aircraft – end of period

176

159

11 

%

Average daily aircraft utilization (hours)

9.2

10.3

(11)

%

Passengers (thousands)

33,200

33,296

— 

%

Average seats per departure

209

205

2 

%

RPMs (millions)

31,187

30,630

2 

%

Load factor

78.4 

%

76.8 

%

1.6 

 pts

Fare revenue per passenger ($)

44.60

43.09

4 

%

Non-fare passenger revenue per passenger ($)

63.79

67.50

(5)

%

Other revenue per passenger ($)

3.78

2.79

35 

%

Total ancillary revenue passenger ($)

67.57

70.29

(4)

%

Total revenue per passenger ($)

112.17

113.38

(1)

%

Total revenue per available seat mile (“RASM”) (¢)

9.37

9.47

(1)

%

RASM, stage-length adjusted to 1,000 miles (¢) (c)

8.98

8.95

— 

%

Cost per available seat mile (“CASM”) (¢)

9.74

9.32

5 

%

CASM (excluding fuel) (¢) (b)

7.41

6.71

10 

%

CASM + net interest (¢) (b)

9.70

9.25

5 

%

Adjusted CASM (¢) (b)

9.74

9.42

3 

%

Adjusted CASM (excluding fuel) (¢) (b)

7.41

6.81

9 

%

Adjusted CASM (excluding fuel), stage-length adjusted to 1,000 (¢)(b)(c)

7.10

6.44

10 

%

Adjusted CASM + net interest (¢) (b)

9.70

9.35

4 

%

Adjusted CASM + net interest, stage-length adjusted to 1,000 (¢)(b)(c)

9.30

8.84

5 

%

Fuel cost per gallon ($)

2.47

2.73

(10)

%

Fuel gallons consumed (thousands)

375,527

381,444

(2)

%

Full-time equivalent employees

7,656

7,913

(3)

%

_________________

(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).

72

Liquidity and Capital Resources

Overview

As of December 31, 2025, we had $874 million of total available liquidity, consisting of $654 million in unrestricted cash and cash equivalents and $220 million from the undrawn Revolving Loan Facility. We had $614 million of total debt, net, of which $301 million was short-term and consisted primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net was comprised of $348 million outstanding under our PDP Financing Facility, $105 million of 2025-1 EETCs, $101 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), and $66 million in 10-year loans (collectively, the “PSP Promissory Notes”) from the U.S. Department of the Treasury (the “Treasury”), partially offset by $6 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 year ended December 31, 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 year ended December 31, 2025 1,636,058 Warrants expired. As of December 31, 2025, Warrants to purchase 237,274 shares of FGHI common stock were outstanding and set to expire during 2026.

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:

December 31,

2025

2024

($ in millions)

Cash and cash equivalents

$

671 

$

740 

Total current assets, excluding cash and cash equivalents

$

287 

$

250 

Total current liabilities, excluding current maturities of long-term debt, net and operating leases

$

1,023 

$

927 

Current maturities of long-term debt, net

$

301 

$

261 

Long-term debt, net

$

313 

$

241 

Stockholders’ equity

$

491 

$

604 

Debt to capital ratio

56 

%

45 

%

Debt to capital ratio, including operating lease obligations

92 

%

88 

%

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 Pre-delivery Credit Facilities, and cash flows from operating activities. 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 undrawn 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 with 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 December 31, 2025, we operated all of our 176 aircraft under operating leases. PDPs relating to future deliveries under our agreement with

73

Airbus are required at various times prior to each aircraft’s delivery date. As of December 31, 2025, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $391 million, had $348 million outstanding. As of December 31, 2025, we had $428 million of PDPs held by Airbus, which have been partially financed by our Pre-delivery Credit Facilities.

As of December 31, 2025, we had a firm obligation to purchase 168 A320neo family aircraft and 21 additional spare engines to be delivered by 2031. Of our aircraft commitments, 20 had committed operating leases for deliveries occurring between 2026 and 2027. We intend to evaluate financing options for the remaining aircraft.

The following table summarizes current and long-term material cash requirements as of December 31, 2025, which we expect to fund primarily with operating and financing cash flows (in millions):

Material Cash Requirements

2026

2027

2028

2029

2030

Thereafter

Total

Debt obligations(a)

$

303 

$

63 

$

18 

$

102 

$

42 

$

92 

$

620 

Interest commitments(b)

32 

19 

15 

11 

7 

6 

90 

Operating lease obligations(c)

806 

799 

754 

681 

648 

2,784 

6,472 

Flight equipment purchase obligations(d)

1,426 

2,093 

2,133 

2,374 

1,821 

943 

10,790 

Total

$

2,567 

$

2,974 

$

2,920 

$

3,168 

$

2,518 

$

3,825 

$

17,972 

__________________

(a)Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of December 31, 2025, our affinity card unsecured debt due through 2029,the PSP Promissory Notes through 2031, and our class A-1 enhanced equipment certificate through 2032. See “Notes to Consolidated Financial Statements — 7. Debt.”

(b)Represents interest and commitment fees on debt obligations and our undrawn 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 consolidated balance sheets. See “Notes to Consolidated Financial Statements — 8. Operating Leases.”

(d)Represents purchase commitments for aircraft and engines. See “Notes to Consolidated Financial Statements — 11. Commitments and Contingencies.”

Cash Flows

The following table presents information regarding our cash flows in the years ended December 31, 2025 and 2024:

Year Ended December 31,

2025

2024

(in millions)

Net cash used in operating activities

$

(525)

$

(82)

Net cash used in investing activities

(99)

(75)

Net cash provided by financing activities

555 

288 

Net increase (decrease) in cash, cash equivalents and restricted cash

(69)

131 

Cash, cash equivalents and restricted cash at beginning of period

740 

609 

Cash, cash equivalents and restricted cash at end of period

$

671 

$

740 

Operating Activities

During the year ended December 31, 2025, net cash used in operating activities totaled $525 million, which was driven by $202 million of outflows from changes in operating assets and liabilities, non-cash adjustments of $186 million and $137 million of net loss.

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The $202 million of outflows from changes in operating assets and liabilities included:

•$257 million in increases in other long-term assets primarily driven by increases in capitalized maintenance and prepaid maintenance;

•$12 million in increases in accounts receivable;

•$1 million in decreases in accounts payable; and

•$1 million in decreases in other liabilities; partially offset by

•$58 million in increases in our air traffic liability driven by an increase in customer flight credits for non-refundable future travel, increased sales in our membership programs as well as increased bookings; and

•$11 million in decreases in supplies and other current assets.

Our net loss of $137 million was also adjusted by the following non-cash items to arrive at net cash used in operating activities:

•$302 million in gains recognized on sale-leaseback transactions; partially offset by

•$91 million in depreciation and amortization;

•$21 million in stock-based compensation expense;

•$3 million in deferred tax expense; and

•$1 million in amortization of cash flow hedges, net of tax.

During the year ended December 31, 2024, net cash used in operating activities totaled $82 million, which was driven by non-cash adjustments totaling $204 million, partially offset by $85 million of net income and $37 million of inflows from changes in operating assets and liabilities.

The $37 million of inflows from changes in operating assets and liabilities included:

•$82 million in decreases in aircraft maintenance deposits;

•$77 million in other liabilities driven primarily by leased aircraft return accruals, passenger taxes payable and other operational related accruals;

•$41 million in increases in our air traffic liability driven by increased booking and related fares;

•$22 million in decreases in accounts receivable; and

•$20 million in decreases in supplies and other current assets; partially offset by

•$190 million in increases in other long-term assets primarily driven by increases in capitalized maintenance, prepaid maintenance and deferred purchase incentives; and

•$15 million in decreases in accounts payable.

Our net income of $85 million was also adjusted by the following non-cash items to arrive at net cash used in operating activities:

•$294 million in gains recognized on sale-leaseback transactions; partially offset by

•$72 million in depreciation and amortization;

•$16 million in stock-based compensation expense;

•$1 million loss on extinguishment of debt; and

•$1 million in amortization of cash flow hedges, net of tax.

Investing Activities

During the year ended December 31, 2025, net cash used in investing activities totaled $99 million, driven by:

•$75 million in cash outflows for capital expenditures; and

•$24 million in net expenditures for PDP activity.

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During the year ended December 31, 2024, net cash used in investing activities totaled $75 million, driven by:

•$76 million in cash outflows for capital expenditures; and

•$2 million in cash outflows relating to other investing activity; partially offset by

•$3 million in net proceeds for PDP activity.

Financing Activities

During the year ended December 31, 2025, net cash provided by financing activities was $555 million, primarily driven by:

•$492 million in cash proceeds from debt issuances, net of issuance costs, consisting of $205 million drawn on our Revolving Loan Facility, $181 million of net borrowings on our Pre-delivery Credit Facilities, $105 million of borrowings related to Class A-1 Equipment Certificates and $1 million drawn on our Barclays facility;

•$441 million in net proceeds received from sale-leaseback transactions; and

•$6 million in proceeds from the exercise of stock options; partially offset by

•$380 million in cash outflows from principal repayments on debt, which include $205 million in Revolving Loan Facility payments, $163 million in Pre-delivery Credit Facilities payments and $12 million in payments pursuant to our previous building notes; and

•$4 million cash outflows for payments related to tax withholdings of share-based awards.

During the year ended December 31, 2024, net cash provided by financing activities was $288 million, primarily driven by:

•$476 million in cash proceeds from debt issuances, consisting of $444 million of net borrowings on our Pre-delivery Credit Facilities, $20 million in draws on our Barclays facility and $12 million in new borrowings on our building notes;

•$264 million in net proceeds received from sale-leaseback transactions; and

•$1 million in proceeds from the exercise of stock options; partially offset by

•$447 million in cash outflows from principal repayments on debt, which include $431 million in Pre-delivery Credit Facilities payments and $16 million in payments pursuant to our previous building note; and

•$6 million cash outflows for payments related to tax withholdings of share-based awards.

As of December 31, 2025, we did not have any other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our results of operations, financial condition or cash flows.

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Commitments and Contractual Obligations

As of December 31, 2025, our contractual purchase commitments include future aircraft and spare engine acquisitions. The table below does not include commitments that are contingent on events or other factors that are uncertain or unknown at this time.

A320neo

A321neo

Total

Aircraft(a)

Engines

Year Ending

2026

8 

16 

24 

2 

2027

8 

26 

34 

3 

2028

4 

30 

34 

2 

2029

— 

36 

36 

5 

2030

— 

28 

28 

— 

Thereafter

— 

12 

12 

9 

Total

20 

148 

168 

21 

__________________

(a)    While the schedule presented above reflects the contractual delivery dates as of December 31, 2025, we continue to experience delays in the deliveries of Airbus aircraft which may persist in future periods.

As of December 31, 2025, all 176 aircraft in our fleet were subject to operating leases. These leases expire between 2027 and 2037. Leases for 73 of our aircraft could generally be renewed for one to four years.

Separately, we have various leases with respect to real property as well as various agreements among airlines relating to fuel consortia or fuel farms at airports. Under some of these contracts, we are party to joint and several liability regarding damages. Under others, where we are a member of an LLC or other entity that contracts directly with the airport operator, liabilities are borne through the fuel consortia structure. Our aircraft, services, equipment lease and sale and financing agreements typically contain provisions requiring us, as the lessee, obligor or recipient of services, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or such other equipment. We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft, services, equipment lease and sale and financing agreements described above.

Certain of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions and other agreements, we also bear the risk of certain changes in tax laws that would subject payments to non-U.S. entities to withholding taxes.

Certain of these indemnities survive the length of the related financing or lease. We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict when and under what circumstances these provisions may be triggered and the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.

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Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. To the extent that there are material differences between these estimates and actual results, our financial condition and results of operations could be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting estimates, which we discuss below. For a detailed discussion of our significant accounting policies, please refer to “Notes to Consolidated Financial Statements — 1. Summary of Significant Accounting Policies.”

Frequent Flyer Program

Our FRONTIER Miles program provides frequent flyer travel awards to program members based on accumulated miles. Miles are accumulated as a result of travel, purchases using the co-branded credit card, For Less price guarantee, and purchases from other participating partners. As of December 31, 2025 and 2024, our total frequent flyer liability was $60 million and $49 million, respectively.

The contract to sell miles under the co-branded credit card partnership has multiple performance obligations. The agreement provides for joint marketing, and we account for this agreement consistently with the accounting method that allocates the consideration received to the individual products and services delivered based on relative stand-alone selling prices. We determined the best estimate of the selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) equivalent ticket value (“ETV”) for the award travel obligation, (3) licensing of brand and access to member lists, (4) advertising and marketing efforts and (5) airline benefits. Any changes in the assumptions outlined above related to our co-branded credit card partnership at agreement inception or material modification would impact the allocation of consideration received and the resulting timing of when revenues from the each of the specific performance obligation would be recognized.

We estimate breakage (miles that are expected to expire unutilized) based on statistical models derived from historical redemption patterns. Breakage assumptions, including the period over which miles are expected to be redeemed, the actual redemption activity for miles, or the estimated fair value of miles expected to be redeemed, could have an impact on revenues in the year in which the change occurs and in future years. Additionally, we estimate ETV, which is used to determine the value per mile, based on the historical prices of the flights redeemed using miles and changes to these assumptions could impact the initial allocation of consideration in our co-branded credit card partnership or the amount of revenue recognized or deferred for miles accumulated as a result of travel.

For the year ended December 31, 2025, holding other factors constant, a 10% change in our estimated frequent flyer breakage rate would have resulted in a change to passenger revenues of approximately $4 million, or less than 1%.

Revenues from Customer’s Rights to Book Future Travel

As of December 31, 2025 and 2024, our air traffic liability balance was $361 million and $303 million, respectively, of which $43 million and $19 million were related to customer rights to book future travel in the form of a flight credit, which mainly expire 12 months after issuance if not redeemed by the passenger. The amounts not expected to be redeemed are recognized as revenue over the historical pattern of rights exercised by customers. During the years ended December 31, 2025, 2024 and 2023, we recognized $79 million, $37 million and $44 million, respectively, in passenger revenue within our consolidated statements of operations, related to expected and actual expiration of customer rights to book future travel.

We estimate amounts not expected to be redeemed (breakage) based on historical redemption patterns of such customer rights, which also considers any historical redemption activity that may not be indicative of future trends such as program modifications that may impact future expectations of breakage. Changes in breakage rate

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assumptions as a result of actual results differing from historical patterns or other factors, including the period over which these rights are expected to be redeemed, could have a material impact on revenues recognized in the year in which the change occurs and in future years.

For the year ended December 31, 2025, holding other factors constant, a 10% change in our estimated breakage related to customer’s rights to book future travel, which assumes no change in historical pattern of usage of such rights, would have resulted in a change to passenger revenues of approximately $14 million, or less than 1%.

Leased Aircraft Return Costs

Our aircraft operating lease agreements generally require us to return aircraft airframes and engines to the lessor in a certain condition or pay an amount to the lessor based on the airframe and engine’s actual return condition. These return provisions are evaluated at inception of the lease and throughout the lease terms and are accounted for as either fixed or variable lease payments (depending on the nature of the lease return condition). When such costs become both probable and estimable, they are accrued as a component of supplemental rent through the remaining lease term. Changes to the assumptions utilized in the estimation of these lease return costs are accounted for on a cumulative catch-up basis. As of December 31, 2025 and 2024, our total leased aircraft return cost liability was $19 million and $49 million, respectively.

In 2025 and 2024, we extended the term for certain aircraft operating leases that were slated to expire between 2026 and 2027, and between 2025 and 2027, respectively. For the years ended December 31, 2025 and 2024, we recorded a benefit of $27 million and $14 million, respectively, to aircraft rent in our consolidated statement of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes at the original return date. Given the extension of these aircraft operating leases, such variable return costs are no longer probable of occurring.

In assessing the future potential lease return costs, we consider the future anticipated costs and scope of maintenance events (largely driven by projected number of flight hours and cycles estimated to be utilized on the aircraft and engines prior to return), estimated timing of such events including the timing since the last expected major maintenance event, the date the aircraft is due to be returned to the lessor, contractual terms of the lease and maintenance provider agreements, current condition of each aircraft, number of heavy maintenance events on engines, age of the aircraft at lease expiration, type of engine, projected number of hours and cycles run on the engines at the time of return and the number of projected cycles run on the airframe at the time of return, among other estimates.

If actual estimates vary materially from those utilized in the estimation of lease return costs we could incur more or less supplemental rent expense depending on the direction of the adjustments necessary. There can be no assurance that the projections utilized will not materially change in the future given the inherent difficulty in forecasting future utilization of aircraft over their lease terms, as well as the shop visit timing particularly considering new engine technology we deploy in our fleet; however, the estimates utilized are the best available at the time the financial statements were issued.

Income Tax Valuation Allowance

As of December 31, 2025, our total deferred tax assets, net of a $65 million valuation allowance, were $1,225 million, which included $124 million of deferred tax assets related to NOL carry forwards. These deferred tax assets are comprised of $93 million, $16 million and $15 million related to NOLs available to reduce future federal, state and foreign taxable income, respectively. We assess whether it is more likely than not that sufficient taxable income will be generated to realize deferred tax assets, and a valuation allowance is established if it is not likely that deferred income tax assets will be realized. We consider sources of taxable income from prior period carryback

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periods, future reversals of existing taxable temporary differences, tax planning strategies and future taxable income when assessing the future utilization of deferred tax assets.

As part of our assessment of whether a valuation allowance is warranted, we consider all available positive and negative evidence in conjunction with evaluating the source and availability of taxable income to utilize such deferred tax assets. As of December 31, 2023, a significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2023. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. As a result of our assessment, we concluded that as of December 31, 2023, it is more likely than not that the benefit from a portion of our federal and state deferred tax assets will not be realized and we recorded a valuation allowance of $37 million against our federal and state deferred tax assets.

During the year ended December 31, 2024, as a result of the change in the overall net deferred tax position and pre-tax income generated, we reduced the valuation allowance by $18 million and maintained a valuation allowance of $19 million against our federal and state NOL-related deferred tax assets due to the uncertainty of future income to be generated. Furthermore, we maintained a valuation allowance related to our $11 million of foreign deferred tax assets.

During the year ended December 31, 2025, as a result of the change in the overall net deferred tax position and pre-tax loss generated, we increased the valuation allowance by $31 million and maintained a valuation allowance of $50 million against our federal and state NOL-related deferred tax assets due to our continued inability to utilize subjective evidence such as our projections for future income. Furthermore, we have a valuation allowance related to $15 million of our foreign deferred tax assets. The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for taxable income.

Long-Term Maintenance Agreements

We have entered into maintenance agreements with both of our engine providers, CFM International and Pratt & Whitney, to cover the primary maintenance services of the engines for a majority of our fleet. The arrangements stipulate that we pay a baseline per-flight-hour rate based on monthly engine utilization over the life of the arrangement. Given that the accounting for the arrangement will follow our heavy maintenance accounting and is dependent on many projected factors such as flight hours, shop visit timing and scope, and the stand-alone value of certain maintenance services, there are significant estimates that impact the accounting of our per-flight-hour maintenance agreements including amounts capitalized as recoverable pre-paid maintenance, expensed and treated as capitalized maintenance as well as the timing of each.

As of December 31, 2025, we had capitalized $275 million of rate per hour payments considered pre-paid maintenance, included within other assets on our consolidated balance sheets, which are probable to be recovered via future shop visits.

Recent Accounting Pronouncements

See “Notes to Consolidated Financial Statements — 1. Summary of Significant Accounting Policies” included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.

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GLOSSARY OF AIRLINE TERMS

Set forth below is a glossary of industry terms:

“A320 family” means, collectively, the Airbus series of single-aisle aircraft, including the A320ceo, A320neo, A321ceo and A321neo aircraft.

“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, customer rights to book future travel, 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.

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“DOT” means the United States Department of Transportation.

“EPA” means the United States Environmental Protection Agency.

“Fare revenue” consists of base fares for air travel, including miles redeemed under our frequent flyer program, unused and expired passenger 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).

“Net interest expenses (income)” means interest expense, capitalized interest, interest income and other.

“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.

“VFR” means visiting friends and relatives.