Frontier Group Holdings Inc

Previous wording

Labor -We are currently in negotiations with the unions which represent our pilots and flight attendants regarding their next labor contract.

Current wording

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

Previous wording

Pratt & Whitney - Since 2022, we have begun to introduce aircraft into our fleet that use the Pratt & Whitney PW1100 Geared Turbo Fan (“GTF”) engine, and we have selected this engine for most of our planned future deliveries. During 2023, Pratt & Whitney announced the requirement, mandated by the FAA, for removal of certain engines for inspection due to a possible condition in the powdered metal used to manufacture certain engine parts. This will require accelerated inspection of the PW1100G engine, which we use for certain of our A320neo family aircraft. While this has not impacted our operations through September 30, 2024, these additional inspection and/or maintenance obligations could result in lengthy turnaround times to perform these inspections including any resulting repairs or other modifications that may be identified. This inspection program may have an adverse impact on our operations, particularly if we are required to temporarily take aircraft out of service. We continue to assess the impact on our future capacity plans and we are in communication with Pratt & Whitney regarding compensation related to this matter.

Current wording

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 most of our planned future deliveries. During 2023, Pratt & Whitney announced the requirement, mandated by the FAA, 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 March 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 continue to assess the impact on our future capacity plans and we are in communication with Pratt & Whitney regarding compensation related to this matter.

Previous wording

The following table provides select financial and operational information for the three and nine months ended September 30, 2024 and 2023, respectively (in millions):

Current wording

The following table provides select financial and operational information for the three months ended March 31, 2025 and 2024, respectively (in millions):

Previous wording

Total operating revenues for the three months ended September 30, 2024 totaled $935 million, an increase of 6% compared to the three months ended September 30, 2023. This was primarily due to the 4% increase in capacity, as measured by ASMs, as well as a 2% increase in revenue per available seat mile (“RASM”). The increase in RASM is driven by 15% higher enplanements partially offset by 8% lower total revenue per passenger on a 14% decrease in average stage length as compared to the corresponding prior year period.

Current wording

Total operating revenues for the three months ended March 31, 2025 totaled $912 million, an increase of 5% compared to the three months ended March 31, 2024. This was primarily due to a 5% increase in capacity, as measured by ASMs. Revenue per available seat mile (“RASM”) was flat for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily driven by the 12% increase in passengers offset by 6% decline in revenue per passenger as compared to the corresponding prior year period.

Previous wording

Total operating expenses during the three months ended September 30, 2024 decreased to $916 million, resulting in a cost per available seat mile (“CASM”) of 9.10¢, a decrease of 6% compared to the three months ended September 30, 2023. Fuel expense was 10% lower, as compared to the corresponding prior year period. The $30 million decrease in fuel expense for the three months ended September 30, 2024, as compared to the corresponding prior year period, was primarily driven by the 13% decrease in fuel cost per gallon, partially offset by the 4% increase in fuel gallons consumed, as a result of our 4% capacity increase.

Current wording

Total operating expenses during the three months ended March 31, 2025 increased to $958 million, resulting in a cost per available seat mile (“CASM”) of 9.63¢, an increase of 1% compared to the three months ended March 31, 2024. Fuel expense for the three months ended March 31, 2025 was $25 million lower than for the corresponding prior year period. This 10% decrease in fuel expense for the three months ended March 31, 2025 was primarily driven by the 13% decrease in fuel cost per gallon, partially offset by the 4% increase in fuel gallons consumed, as a result of our 5% capacity increase.

Previous wording

Our non-fuel expenses increased by 1% during the three months ended September 30, 2024, as compared to the corresponding prior year period, driven primarily by higher capacity and larger fleet size and the resulting increase in operations during the same period. This movement was partially offset by an increase in sale-leaseback gains and a legal settlement, as compared to the three months ended September 30, 2023. CASM (excluding fuel), a non-GAAP measure, decreased by 2% to 6.51¢ on a 4% increase in capacity for the three months ended September 30, 2024, as compared to the corresponding prior year period. This decrease was primarily due to the increase in sale-leaseback gains and a legal settlement. This movement was partially offset by increases in stations costs due to a lower stage length on higher departures and higher aircraft rent expense due to increases to the fleet size.

Current wording

Our non-fuel expenses increased by 14% during the three months ended March 31, 2025, as compared to the corresponding prior year period, driven primarily by increased operations resulting from increased passengers, capacity, departures and station costs during the same period, as well as a decrease in sale-leaseback gains, partially offset by a decrease in aircraft lease return costs resulting from lease extension events that occurred during the three months ended March 31, 2025. CASM (excluding fuel), a non-GAAP measure, increased 8% to 7.24¢, on a 5% increase in capacity for the three months ended March 31, 2025, as compared to the corresponding prior year period, due to the aforementioned drivers of non-fuel expenses.

Previous wording

We generated net income of $26 million during the three months ended September 30, 2024, compared to a net loss of $32 million for the three months ended September 30, 2023. Considering these aforementioned non-GAAP adjustments and related tax impacts, as well as the write-off of $1 million in unamortized deferred financing costs for the current year period, our adjusted (non-GAAP) net loss was $11 million for the three months ended September 30, 2024, as compared to an adjusted net loss of $32 million for the three months ended September 30, 2023.

Current wording

We generated a net loss of $43 million during the three months ended March 31, 2025, compared to a net loss of $26 million for the three months ended March 31, 2024. Our adjusted net loss, a non-GAAP measure, was $43 million and $21 million for each of the three months ended March 31, 2025 and 2024, respectively.

Previous wording

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”.

Current wording

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), and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR.”

Previous wording

As of September 30, 2024, our total available liquidity was $576 million, made up of cash and cash equivalents, and we have $205 million of funds available to be drawn under our revolving loan facility.

Current wording

As of March 31, 2025, our total available liquidity was $889 million, made up of unrestricted cash and cash equivalents, including $205 million of funds available to be drawn under our revolving line of credit available for general corporate purposes (the “Revolving Loan Facility”).

Previous wording

Total operating revenue increased $75 million, or 3%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. While capacity grew by 8%, as measured by ASMs, revenue was unfavorably impacted by a 5% decline in RASM due to the 8% decline in total revenue per passenger as well as a 6-point reduction in load factor, partially offset by a reduction in stage length of 12% on a 12% increase in passengers. The increase in capacity was driven by the 16% increase in average aircraft in service during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, partially offset by a 7% decrease in average daily aircraft utilization to 10.6 hours per day compared to 11.4 hours per day for the corresponding prior year period.

Current wording

Total operating revenue increased $47 million, or 5%, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. While capacity grew by 5%, as measured by ASMs, RASM was flat due to a 12% increase in passengers on a 3% reduction in stage length and a 2.2-point increase in load factor, offset by a 6% decline in total revenue per passenger as compared to the corresponding prior year period. The increase in capacity was driven by the 14% increase in average aircraft in service during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, partially offset by an 8% decrease in average daily aircraft utilization for the corresponding prior year period due primarily to our disciplined capacity deployment focused on peak days of the week.

Previous wording

Aircraft Fuel. Aircraft fuel expense decreased by $30 million, or 10%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily due to the 13% decrease in fuel cost per gallon, partially offset by the 4% increase in fuel gallons consumed, driven by higher capacity.

Current wording

Aircraft Fuel. Aircraft fuel expense decreased by $25 million, or 10%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily due to a 13% decrease in fuel cost per gallon, partially offset by the 4% increase in fuel gallons consumed, driven by higher capacity.

Previous wording

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $15 million, or 7%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily due to higher crew costs, driven primarily by elevated credit hours on higher capacity and other benefit costs, as well as an increase in headcount of salaried support staff, as compared to the corresponding prior year period.

Current wording

Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $16 million, or 7%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was due to higher crew costs, driven primarily by the growth in the business and employee benefit costs, as compared to the corresponding prior year period.

Previous wording

Aircraft Rent. Aircraft rent expense increased by $54 million, or 13%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to a larger fleet, partially offset by a decrease in aircraft lease return costs.

Current wording

Aircraft Rent. Aircraft rent expense increased by $2 million, or 1%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to a larger fleet, partially offset by a decrease in aircraft lease return costs resulting from aircraft lease extensions that occurred in the current period.

Previous wording

Station Operations. Station operations expense increased by $31 million, or 23%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to increased airport operations as a result of the 17% increase in departures and 15% increase in passengers partially offset by increased benefits from airport revenue and cost sharing arrangements.

Current wording

Station Operations. Station operations expense increased by $43 million, or 31%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to station mix and rate inflation as well as increased airport operations as a result of the 12% increase in passengers and 6% increase in departures.

Previous wording

Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $5 million, or 10%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was primarily due to the 17% increase in average aircraft in service, which resulted in higher aircraft maintenance costs, partially offset by lower contract labor costs.

Current wording

Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $2 million, or 4%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. This increase was primarily due to the 14% increase in average aircraft in service, which resulted in higher aircraft repair and maintenance costs, partially offset by lower engine repair costs.

Previous wording

Sales and Marketing. Sales and marketing expense increased by $8 million, or 6%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to an increase in customer reservation system fees and increase in paid media advertising. The following table presents our distribution channel mix:

Current wording

Sales and Marketing. Sales and marketing expense increased by $1 million, or 3%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to an increase in call center operation fees. The following table presents our distribution channel mix:

Previous wording

Depreciation and Amortization. Depreciation and amortization expense increased by $6 million, or 46%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to an increase in capitalized maintenance depreciation due to our growing fleet.

Current wording

Depreciation and Amortization. Depreciation and amortization expense increased by$4 million, or 25%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to an increase in capitalized maintenance depreciation due to our growing fleet.

Previous wording

Other Operating. Other operating resulted in a net gain of $40 million during the three months ended September 30, 2024, compared to an expense of $40 million during the three months ended September 30, 2023. This movement was primarily driven by a legal settlement gain of $40 million and the increase in sale-leaseback gains, as a result of five aircraft inductions subject to sale-leaseback transactions in the current period, compared to three aircraft induction subject to sale-leaseback transactions in the corresponding prior year period.

Current wording

Other Operating. Other operating resulted in an expense of $18 million during the three months ended March 31, 2025, compared to a net gain of $1 million during the three months ended March 31, 2024. This movement was primarily driven by the decrease in sale-leaseback gains as a result of four aircraft inductions and two engine inductions subject to sale-leaseback transactions in the current period, compared to six aircraft inductions subject to sale-leaseback transactions in the corresponding prior year period.

Previous wording

Other Income (Expense). Other income decreased by $1 million, or 11%, during the three months ended September 30, 2024, as compared the three months ended September 30, 2023. The decrease was primarily due to the $1 million loss on extinguishment of debt from the write-off of unamortized deferred financing cost related to the PDP Financing Facility.

Current wording

Other Income (Expense). Other income decreased by $1 million, or 14%, during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to lower capitalized interest.

Previous wording

Income Taxes. Our effective tax rate for the nine months ended September 30, 2024 was an expense of 11.4%, compared to an expense of 0% for the nine months ended September 30, 2023, on pre-tax income for both periods. The primary difference between the effective tax rate and the federal statutory rate for the nine months ended September 30, 2024 is related to a decrease in our valuation allowance relating to federal and state net operating losses, partially offset by the impact of non-deductibility of certain executive compensation and other employee benefits. Please refer to “Notes to Condensed Consolidated Financial Statements—11. Income Taxes” for additional information.

Current wording

Income Taxes. Our effective tax rate for the three months ended March 31, 2025 was an expense of 7.5%, compared to an expense of 8.3% for the three months ended March 31, 2024, on pre-tax loss for both periods. The primary difference between the effective tax rate and the federal statutory rate for the three months ended March 31, 2025 is related to an increase in our valuation allowance relating to federal and state net operating losses as well as the impact of non-deductibility of certain executive compensation and other employee benefits, partially offset by net windfalls related to the vesting and exercise of share-based awards. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.

Previous wording

(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.

Current wording

(e)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.

Previous wording

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

Current wording

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR

Previous wording

(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.

Current wording

(a)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 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.

Previous wording

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.

Current wording

Adjusted net income (loss), EBITDA and adjusted EBITDA have limitations as analytical tools. Some of the limitations applicable to these measures include: 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 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 net income (loss), EBITDA and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures. Because of these limitations, 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 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 net income (loss) and EBITDA, including adjusted net income (loss) and adjusted EBITDA, as presented may not be directly comparable to similarly titled measures presented by other companies.

Previous wording

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.

Current wording

For the foregoing reasons, each of 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.

Previous wording

(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—11. Income Taxes” for additional information.

Current wording

(a)During the three months ended March 31, 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 for 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.

Previous wording

The following table sets forth our operating statistics for the three and nine months ended September 30, 2024 and 2023. 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.

Current wording

The following table sets forth our operating statistics for the three months ended March 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.

Previous wording

(c)Stage-length adjusted to 1,000 miles: Adjusted CASM (excluding fuel) * Square root (stage length / 1,000).

Current wording

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

Previous wording

As of September 30, 2024, our total available liquidity was $576 million, made up of cash and cash equivalents, and we have $205 million of funds available to be drawn under our Revolving Loan Facility. We had $469 million of total debt, net, of which $190 million is short-term and consists primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net is comprised of $296 million outstanding under our Pre-delivery Credit Facilities, $100 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), $66 million in 10-year, low-interest loans from the U.S. Department of the Treasury (the “Treasury,” and such loans, the “PSP Promissory Notes”) and $12 million in secured indebtedness for our headquarters building, partially offset by $5 million in deferred debt acquisition costs.

Current wording

As of March 31, 2025, we had $889 million of total available liquidity, consisting of $684 million in unrestricted cash and cash equivalents and $205 million in total undrawn capacity on our Revolving Loan Facility. We had $507 million of total debt, net, of which $263 million is short-term and consists primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net is comprised of $333 million outstanding under our Pre-delivery Credit Facilities, $101 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), $66 million in 10-year, low-interest loans (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.

Previous wording

In connection with the PSP Promissory Notes and the term loan facility entered into with the Treasury on September 28, 2020, which was repaid in full on February 2, 2022, we issued warrants to purchase 3,117,940 shares of our common stock at a weighted-average price of $6.95 per share. We have the intent and ability to settle the warrants issued in common shares and we have classified the warrant liability to additional paid-in-capital on our condensed consolidated balance sheet. These warrants will expire between May 2025 and June 2026. No warrants have been exercised as of September 30, 2024.

Current wording

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. These Warrants will expire between May 2025 and June 2026. In June 2024, the Treasury sold all such Warrants to a financial institution. During the three months ended March 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. As of March 31, 2025, Warrants to purchase 1,873,332 shares of FGHI common stock were outstanding.

Previous wording

Our single largest capital commitment relates to the acquisition of aircraft. As of September 30, 2024, we operated all of our 153 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, 2024, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $478 million, had $296 million outstanding. As of September 30, 2024, we had $390 million of PDPs held by Airbus which have been partially financed by our Pre-delivery Credit Facilities.

Current wording

Our single largest capital commitment relates to the acquisition of aircraft. As of March 31, 2025, we operated all of our 163 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 March 31, 2025, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $478 million, had $333 million outstanding. As of

Previous wording

As of September 30, 2024, we had a firm obligation to purchase 193 A320neo family aircraft and 13 additional spare engines to be delivered by 2031. Of our aircraft commitments, 23 had committed operating leases for deliveries occurring between 2024 and 2026, and 12 were subject to non-binding letters of intent to provide operating lease financing for 2024 and 2025 deliveries. We intend to evaluate financing options for the remaining aircraft.

Current wording

As of March 31, 2025, we had a firm obligation to purchase 183 A320neo family aircraft and 9 additional spare engines to be delivered by 2031. Of our aircraft commitments, 25 had committed operating leases for deliveries occurring between 2025 and 2026. We intend to evaluate financing options for the remaining aircraft.

Previous wording

(a)Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of September 30, 2024 pertaining to aircraft with deliveries through 2027 and certain deliveries in 2028, our affinity card unsecured debt due through 2029, our building notes through September 2031 and the PSP Promissory Notes due through 2031. See “Notes to Condensed Consolidated Financial Statements — 6. Debt”.

Current wording

(a)Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of March 31, 2025, our affinity card unsecured debt due through 2029, our building notes through September 2031 and the PSP Promissory Notes due through 2031. See “Notes to Condensed Consolidated Financial Statements — 5. Debt.”

Previous wording

(c)Represents gross cash payments related to our operating 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 — 7. Operating Leases”.

Current wording

(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 Condensed Consolidated Financial Statements — 6. Operating Leases.”

Previous wording

(d)Represents purchase commitments for aircraft and engines. See “Notes to Condensed Consolidated Financial Statements — 9. Commitments and Contingencies”.

Current wording

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

Previous wording

The following table presents information regarding our cash flows in the nine months ended September 30, 2024 and 2023 (in millions):

Current wording

The following table presents information regarding our cash flows in the three months ended March 31, 2025 and 2024 (in millions):

Previous wording

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.

Current wording

During the three months ended March 31, 2025, net cash used in operating activities totaled $86 million, which was driven by a $43 million net loss, $28 million of non-cash adjustments and $15 million of outflows from changes in operating assets and liabilities.

Previous wording

•$132 million in increases in other long-term assets driven by increases in capitalized maintenance, prepaid maintenance, prepaid bonuses and capitalized interest;

Current wording

•$49 million in increases in other long-term assets primarily driven by increases in capital maintenance and prepaid maintenance;

Previous wording

•$50 million in decreases in other liabilities driven primarily by leased aircraft return payments;

Current wording

•$24 million in decreases in other liabilities primarily driven by leased aircraft return accruals and other operational related accruals offset by increased passenger taxes payable;

Previous wording

•$39 million in increases in our air traffic liability primarily driven by increased bookings, partially offset by lower fares on bookings;

Current wording

•$64 million in increases in our air traffic liability primarily driven by increased bookings on higher average fares;