Frontier Group Holdings, Inc.
For the period ended Jun 30, 2026. Filed Jul 29, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 29, 2026
ULCC$7.43+4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001670076-26-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsGlossary of Airline TermsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-29.
0001670076-26-000087
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsGlossary of Airline TermsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 172 previous paragraphs and 196 current paragraphs.
90 unchanged; 75 reworded; 20 added; 6 removed; 1 previous and 11 current paragraphs rearranged.
Tables are not compared: 12 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Financing. In June 2026, we amended our Credit Card Affinity Agreement with Barclays Bank Delaware (“Barclays”) to extend the term of both the co-branded credit card agreement and the pre-purchased miles facility from December 31, 2029 to June 30, 2037. The amendment also increased the pre-purchased miles facility from $200 million to $375 million. Please refer to “Notes to Condensed Consolidated Financial Statements — 2. Revenue Recognition” for additional information.
Current report
Product. In July 2026, we announced that the first Starlink-equipped aircraft will launch in 2027 and deployment of high-speed Wi-Fi to the rest of our fleet will follow. Starlink will be our first offering of Wi-Fi and enhance the inflight experience for our customers.
Current report
Fleet. In June 2026, we entered into an agreement with an existing lessor (the “Aircraft Sale Agreement”) to sell 11 A321neo aircraft at the time of delivery from our existing purchase agreement. The 11 aircraft include 3 deliveries expected in the fourth quarter of 2026 and 8 deliveries anticipated in the first half of 2027.
Current report
Total operating revenues for the six months ended June 30, 2026 totaled $2,271 million, an increase of 23% compared to the six months ended June 30, 2025. This was primarily due to the 20% increase in RASM, driven by a 12% increase in total revenue per passenger and a 2.2-point increase in load factor for the six months ended June 30, 2026, as compared to the corresponding prior year period. Capacity, as measured by ASMs, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, increased by 3%.
Current report
Our non-fuel expenses increased by 21% during the three months ended June 30, 2026, as compared to the corresponding prior year period, driven primarily by expenses related to the Early Return Agreement to terminate the leases associated with 24 A320neo aircraft. The 21% increase was also driven by higher rent and maintenance expenses due to a larger fleet, and increased station operations expense due to increased airport operations, partially offset by anincrease in sale-leaseback transactions. CASM (excluding fuel), a non-GAAP measure, increased 13% to 8.46¢, on an 8% increase in capacity, for the three months ended June 30, 2026, as compared to the corresponding prior year period, due to the aforementioned drivers of increased non-fuel expenses.
Current report
Total operating expenses during the six months ended June 30, 2026 increased to $2,651 million, resulting in a CASM of 12.68¢, an increase of 31% compared to the six months ended June 30, 2025. Fuel expense for the six months ended June 30, 2026 was $236 million higher than the corresponding prior year period. The 50% increase in fuel expense for the six months ended June 30, 2026 was driven by the 45% increase in fuel cost per gallon and a 4% increase in fuel gallons consumed.
Current report
Adjusted CASM (excluding fuel), a non-GAAP measure, increased from 7.37¢ for the six months ended June 30, 2025 to 8.31¢ for the six months ended June 30, 2026. For the six months ended June 30, 2026, this excludes the impact of $209 million in expenses relating to the Early Return Agreement. There were no adjustments for the six months ended June 30, 2025.
Current report
Total operating revenue increased $350 million, or 38%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Revenue was favorably impacted by the 28% increase to RASM, driven by a 20% increase in total revenue per passenger, led by fare revenue per passenger, a 5% decrease in average stage length, supported by a 12% increase in departures and a 1.0-point increase in load factor, as compared to the corresponding prior year period. The 8% increase in capacity, as measured by ASMs, was primarily driven by a 6% increase in average aircraft in service as compared to the corresponding prior year period.
Current report
Aircraft Rent. Aircraft rent expense increased by $72 million, or 37%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to higher aircraft lease return expense, driven by the Early Return Agreement, and a larger fleet.
Current report
Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $17 million, or 36%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This increase was primarily due to higher engine repair costs and timing of aircraft inspections and related materials costs, driven by a 6% increase in average aircraft in service.
Current report
Other Income (Expense). Other income decreased by $2 million, or 40%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decrease was primarily due to decreased capitalized interest, driven by lower PDP balances.
Current report
Results of Operations
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Operating Revenues
Current report
(a)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 GAAP to Non-GAAP Financial Data.”
Current report
Aircraft Fuel. Aircraft fuel expense increased by $236 million, or 50%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was due to a 45% increase in fuel cost per gallon as well as a 4% increase in fuel gallons consumed, driven by higher capacity.
Current report
Station Operations. Station operations expense increased by $31 million, or 9%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to increased airport operations driven by an 11% increase in passengers and a 6% increase in departures.
Current report
Other Operating Expense. Other operating expenses increased by $16 million, or 27%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily driven by increases in outside services, taxes and travel costs, partially offset by the increase in sale-leaseback gains, as a result of thirteen aircraft inductions compared to seven aircraft inductions and two engine inductions in the corresponding prior year period.
Current report
Reconciliation of Revenue to Adjusted Revenue
Current report
•$1 million in cash outflows for other investing activity.
Removed paragraphs (6)
Previous report
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.
Previous report
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.
Previous report
Operating Expenses
Previous report
(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.”
Previous report
Operating Expenses
Previous report
Reconciliation of Passenger Revenue to Adjusted Passenger Revenue
Reworded paragraphs (75)
Previous wording
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.
Current wording
Macroeconomic Conditions. 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 and six months ended June 30, 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.
Previous wording
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.
Current wording
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. During the six months ended June 30, 2026, we recorded a one-time charge related to prior periods of $73 million (the “TSA Reserve”) for the 2016-2018 Audit and 2019-2022 Audit periods, 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.
Previous wording
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.
Current wording
In March 2026, we entered into an agreement (the “Early Return Agreement”) to terminate the leases associated with 24 A320neo aircraft. As of June 30, 2026, all 24 aircraft have been returned and removed from the fleet. For the three and six months ended June 30, 2026, we recognized $70 million and $209 million, respectively, 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.
Previous wording
The following table provides select financial and operational information for the three months ended March 31, 2026 and 2025 (in millions):
Current wording
The following table provides select financial and operational information for the three and six months ended June 30, 2026 and 2025 (in millions, except per share data):
Previous wording
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%.
Current wording
Total operating revenues for the three months ended June 30, 2026 totaled $1,279 million, an increase of 38% compared to the three months ended June 30, 2025. Revenue per available seat mile (“RASM”), increased by 28% driven by a 20% increase in total revenue per passenger as compared to the corresponding prior year period, alongside a 1.0-point increase in load factor. Capacity, as measured by ASMs, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, increased by 8%.
Previous wording
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.
Current wording
Adjusted RASM, a non-GAAP measure, increased from 9.08¢ during the six months ended June 30, 2025 to 11.21¢ during the six months ended June 30, 2026. For the six months ended June 30, 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 June 30, 2026 and the three and six months ended June 30, 2025.
Previous wording
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 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.
Current wording
Total operating expenses during the three months ended June 30, 2026 increased to $1,376 million, resulting in a cost per available seat mile (“CASM”) of 12.39¢, an increase of 27%, as compared to the three months ended June 30, 2025. Fuel expense for the three months ended June 30, 2026 was $206 million higher than the corresponding prior year period. The 90% increase in fuel expense for the three months ended June 30, 2026 was driven by a 77% increase in fuel cost per gallon and an 8% increase in fuel gallons consumed.
Previous wording
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.
Current wording
Adjusted CASM (excluding fuel), a non-GAAP measure, increased from 7.50¢ for the three months ended June 30, 2025 to 7.84¢ for the three months ended June 30, 2026. For the three months ended June 30, 2026, this excludes the impact of $70 million in expenses relating to the Early Return Agreement. There were no adjustments for the three months ended June 30, 2025.
Previous wording
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.
Current wording
Our non-fuel expenses increased by 30% during the six months ended June 30, 2026, as compared to the corresponding prior year period, driven primarily by expenses related to the Early Return Agreement, increased aircraft rent due to a larger fleet, and increased maintenance, employee and station costs. CASM (excluding fuel), a non-GAAP measure, increased 26% to 9.31¢, on a 3% increase in capacity, for the six months ended June 30, 2026, as compared to the corresponding prior year due to the aforementioned drivers of increased non-fuel expenses.
Previous wording
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.
Current wording
We generated a net loss of $90 million during the three months ended June 30, 2026, compared to a net loss of $70 million for the three months ended June 30, 2025. Considering the aforementioned non-GAAP adjustments and related $2 million of tax impacts, our adjusted net loss, a non-GAAP measure, was $22 million for the three months ended June 30, 2026. There were no non-GAAP adjustments for the three months ended June 30, 2025.
Previous wording
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.”
Current wording
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 Revenue to Adjusted 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.”
Previous wording
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”).
Current wording
As of June 30, 2026, our total available liquidity was $1,156 million, consisting of $936 million of unrestricted cash and cash equivalents and availability under our revolving line of credit (the “Revolving Loan Facility”).
Previous wording
Aircraft Fuel. Aircraft fuel expense increased by $30 million, or 13%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was due to a 13% increase in fuel cost per gallon.
Current wording
Aircraft Fuel. Aircraft fuel expense increased by $206 million, or 90%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily due to the 77% increase in fuel cost per gallon as well as an 8% increase in fuel gallons consumed, driven by higher capacity.
Previous wording
Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $22 million, or 9%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was primarily due to higher crew costs, as compared to the corresponding prior year period.
Current wording
Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $12 million, or 5%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was primarily due to higher crew costs, as compared to the corresponding prior year period.
Previous wording
Station Operations. Station operations expense increased by $12 million, or 7%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to an increase in airport cost sharing arrangements and a 6% increase in passengers.
Current wording
Station Operations. Station operations expense increased by $19 million, or 11%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to increased airport operations driven by a 14% increase in passengers and a 12% increase in departures.
Previous wording
Sales and Marketing. Sales and marketing expense increased by $2 million, or 5%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to an increase in credit card fees, partially offset by a decrease in third-party distribution channel fees. The following table presents our distribution channel mix:
Current wording
Sales and Marketing. Sales and marketing expense increased by $9 million, or 23%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to the increase in credit card fees as a result of the 38% increase in total operating revenue, partially offset by a decrease in third-party distribution channel fees. The following table presents our distribution channel mix:
Previous wording
Depreciation and Amortization. Depreciation and amortization expense increased by$42 million, or 210%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to the accelerated depreciation on capitalized maintenance costs related to the Early Return Agreement and the increase in capitalized maintenance depreciation due to our growing fleet.
Current wording
Depreciation and Amortization. Depreciation and amortization expense increased by $35 million, or 167%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to the accelerated depreciation on capitalized maintenance costs related to the Early Return Agreement and the increase in capital maintenance depreciation driven by a larger fleet.
Previous wording
Other Operating Expense. Other operating expenses increased by $14 million, or 78%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. This increase was primarily driven by the decrease in sale-leaseback gains, as a result of 7 aircraft inductions compared to 4 aircraft inductions and 2 engine inductions in the corresponding prior year period subject to sale-leaseback transactions, and an increase in travel costs.
Current wording
Other Operating Expense. Other operating expenses increased by $2 million, or 5%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This increase was primarily driven by an increase in supplies, outside service costs, and taxes and insurance expenses, partially offset by the increase in sale-leaseback gains, as a result of six aircraft inductions compared to three aircraft inductions in the corresponding prior year period.
Previous wording
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.
Current wording
Total operating revenue increased $430 million, or 23%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Revenue was favorably impacted by the 20% increase in RASM, driven by a 12% increase in total revenue per passenger, a 2.2-point increase in load factor, and a 4% decrease in average stage length, supported by a 6% increase in departures, as compared to the corresponding prior year period. In addition, capacity, as measured by ASMs, for the six months ended June 30, 2026, increased by 3% primarily due to the 11% increase in average aircraft in service, partially offset by a 6% decrease in average daily aircraft utilization, as compared to the six months ended June 30, 2025. Revenue was unfavorably impacted by the TSA Reserve related to those prior periods of $73 million incurred during the six months ended June 30, 2026.
Previous wording
Aircraft Rent. Aircraft rent expense increased by $104 million, or 65%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to additional lease return expense, in part related to the Early Return Agreement, and a larger fleet.
Current wording
Aircraft Rent. Aircraft rent expense increased by $176 million, or 50%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to additional lease return expense, in part related to the Early Return Agreement, and a larger fleet.
Previous wording
Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $91 million, or 178%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. This increase was primarily due to the write-off on non-recoverable prepaid maintenance balances related to the Early Return Agreement and the 14% increase in average aircraft in service, which resulted in higher aircraft repair and materials costs.
Current wording
Maintenance, Materials and Repairs. Maintenance, materials and repair expense increased by $108 million, or 110%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. This increase was primarily due to the write-off on non-recoverable prepaid maintenance balances related to the Early Return Agreement and higher engine repair costs.
Previous wording
Other Income (Expense). Other income decreased by $4 million, or 67%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt from the addition of the class A-1 enhanced equipment trust certificates (the “2025-1 EETCs”) and decreased interest income from lower interest rates on interest-bearing cash accounts.
Current wording
Other Income (Expense). Other income decreased by $6 million, or 55%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to increased interest expense, driven by higher principal balances on our debt from the addition of the class A-1 enhanced equipment trust certificates (the “2025-1 EETCs”) and decreased capitalized interest, driven by lower PDP balances.
Previous wording
Income Taxes. Our effective tax rate for the three months ended March 31, 2026 was a benefit of 3.2%, compared to an expense of 7.5% for the three months ended March 31, 2025, on pre-tax loss for each of the respective periods. The primary difference between the effective tax rate and the federal statutory rate for the three months ended March 31, 2026 was related to the increase in our valuation allowance relating to U.S. federal and state net operating loss. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.
Current wording
Income Taxes. Our effective tax rate for the six months ended June 30, 2026 was a benefit of 3.5% on pre-tax loss, compared to an expense of 2.7% on pre-tax loss for the six months ended June 30, 2025. The primary difference between the effective tax rate and the federal statutory rate was related to the increase in our valuation allowance relating to U.S. federal and state net operating loss. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.
Previous wording
(b)We received a court ruling relating to the remittance of TSA fees for unused travel covering the 2016-2018 Audit that resulted in a $73 million charge, the TSA Reserve, that covers probable losses in prior years subject to audit that were recorded during the three months ended March 31, 2026. See “Notes to the Condensed Consolidated Financial Statements — 8. Commitments and Contingencies” and “Reconciliation of Passenger Revenue to Adjusted Passenger Revenue” for additional information.
Current wording
(b)We received a court ruling relating to the remittance of TSA fees for unused travel covering the 2016-2018 Audit that resulted in a $73 million charge, the TSA Reserve, that covers probable losses in prior years subject to audit that were recorded during the six months ended June 30, 2026. See “Notes to the Condensed Consolidated Financial Statements — 8. Commitments and Contingencies” and “Reconciliation of Revenue to Adjusted Revenue” for additional information.
Previous wording
(e)We entered into the Early Return Agreement to early terminate the leases associated with 24 A320neo aircraft and as a result incurred non-recurring charges of $139 million in the first quarter of 2026. The $139 million includes $73 million related to the write-off of non-recoverable capitalized prepaid maintenance balances recorded in maintenance, materials and repairs; $37 million of accelerated depreciation expense related to the remeasurement of useful lives of capitalized maintenance; $35 million of lease return costs recorded in aircraft rent and $(6) million of a reversal of previously accrued lease return costs. See “Notes to Condensed Consolidated Financial Statements — 6. Operating Leases” for additional information.
Current wording
(e)We entered into the Early Return Agreement to early terminate the leases associated with 24 A320neo aircraft and as a result incurred non-recurring charges of $209 million during the six months ended June 30, 2026. The $209 million includes $79 million of lease return costs recorded in aircraft rent; $73 million related to the write-off of non-recoverable capitalized prepaid maintenance balances recorded in maintenance, materials and repairs; $63 million of accelerated depreciation expense related to the remeasurement of useful lives of capitalized maintenance; and $(6) million of a reversal of previously accrued lease return costs. See “Notes to Condensed Consolidated Financial Statements — 6. Operating Leases” for additional information.
Previous wording
(c)Adjusted fare revenue, adjusted non-fare revenue, adjusted other revenue, adjusted ancillary and adjusted total revenue, and respective metrics per passenger, (collectively, “revenue per passenger”) are included as supplemental disclosures because we believe they are useful metrics to properly compare our revenue performance to our peers, as revenue per passenger metrics 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 these metrics are useful because they remove certain items that may not be indicative of our base operating performance or future results. These metrics 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
(c)Adjusted fare revenue, adjusted non-fare revenue, adjusted other revenue, adjusted total ancillary revenue and adjusted total revenue, and respective metrics per passenger, (collectively, “revenue per passenger”) are included as supplemental disclosures because we believe they are useful metrics to properly compare our revenue performance to our peers, as revenue per passenger metrics 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 these metrics are useful because they remove certain items that may not be indicative of our base operating performance or future results. These metrics 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
The following table sets forth our operating statistics for the three months ended March 31, 2026 and 2025. 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 and six months ended June 30, 2026 and 2025. 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
As of March 31, 2026, our total available liquidity was $974 million, consisting of $754 million of unrestricted cash and cash equivalents and $220 million of funds available to be drawn under our undrawn Revolving Loan Facility. We had $583 million of total debt, net, of which $240 million is short-term and consists primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net is comprised of $298 million outstanding under our Pre-delivery Credit Facilities, $119 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), $105 million of 2025-1 EETCs and $66 million in 10-year notes (collectively, the “PSP Promissory Notes”) from the U.S. Department of the Treasury (the “Treasury”), partially offset by $5 million in deferred debt acquisition costs.
Current wording
As of June 30, 2026, our total available liquidity was $1,156 million, consisting of $936 million of unrestricted cash and cash equivalents and $220 million of funds available under our undrawn Revolving Loan Facility. We had $506 million of total debt, net, of which $206 million is short-term and consists primarily of amounts outstanding under our Pre-delivery Credit Facilities. Our total debt, net is comprised of $226 million outstanding under our Pre-delivery Credit Facilities, $119 million outstanding under our pre-purchased miles facility with Barclays, $100 million of 2025-1 EETCs and $66 million in 10-year notes (collectively, the “PSP Promissory Notes”) from the U.S. Department of the Treasury (the “Treasury”), partially offset by $5 million in deferred debt acquisition costs.
Previous 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. In June 2024, the Treasury sold all such Warrants to a financial institution. During the three months ended March 31, 2026, 103,208 warrants expired and no warrants were exercised. As of March 31, 2026, warrants to purchase 134,066 shares of FGHI common stock were outstanding and set to expire by June 2026.
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. In June 2024, the Treasury sold all such Warrants to a financial institution. During the six months ended June 30, 2026, 237,274 warrants expired and as of June 30, 2026, no warrants remain outstanding.
Previous wording
Our single largest capital commitment relates to the acquisition of aircraft. As of March 31, 2026, we operated a total of 183 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, 2026, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $326 million, had $298 million outstanding. As of March 31, 2026, we had $383 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 June 30, 2026, we operated a total of 165 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 June 30, 2026, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $299 million, had $226 million outstanding. As of June 30, 2026, we had $322 million of PDPs held by Airbus which have been partially financed by our Pre-delivery Credit Facilities.
Previous wording
As of March 31, 2026, we had a firm obligation to purchase 161 A320neo family aircraft and 20 additional spare engines to be delivered by 2033. Of our aircraft commitments, 23 had committed operating leases for deliveries occurring between 2026 and 2029. We intend to evaluate financing options for the remaining aircraft.
Current wording
As of June 30, 2026, we had a firm obligation to purchase 155 A320neo family aircraft and 20 additional spare engines to be delivered by 2033. Of our remaining aircraft commitments, 16 had committed operating leases for deliveries occurring between 2026 and 2029. We intend to evaluate financing options for the remaining aircraft, excluding the 11 aircraft included within the Aircraft Sale Agreement.
Previous wording
(a)Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of March 31, 2026, 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 Condensed Consolidated Financial Statements — 5. Debt.”
Current wording
(a)Includes principal commitments only associated with our Pre-delivery Credit Facilities with borrowings as of June 30, 2026, the PSP Promissory Notes through 2031, our class A-1 enhanced equipment certificate through 2032 and our affinity card unsecured debt due through 2037. See “Notes to Condensed Consolidated Financial Statements — 5. Debt.”
Previous wording
The following table presents information regarding our cash flows in the three months ended March 31, 2026 and 2025 (in millions):
Current wording
The following table presents information regarding our cash flows in the six months ended June 30, 2026 and 2025 (in millions):
Previous wording
During the three months ended March 31, 2026, net cash provided by operating activities totaled $40 million, which was driven by $78 million of non-cash adjustments and $234 million of inflows from changes in operating assets and liabilities, partially offset by a $272 million net loss.
Current wording
During the six months ended June 30, 2026, net cash provided by operating activities totaled $191 million, which was driven by $88 million of non-cash adjustments and $465 million of inflows from changes in operating assets and liabilities, partially offset by a $362 million net loss.
Previous wording
The $234 million of inflows from changes in operating assets and liabilities included:
Current wording
The $465 million of inflows from changes in operating assets and liabilities included:
Previous wording
•$256 million in increases in other liabilities primarily driven by the TSA Reserve, cash received for supplier incentives, increased leased aircraft return accruals related to the Early Return Agreement, and increases to other operational related accruals;
Current wording
•$503 million in increases in other liabilities primarily driven by the prepaid loyalty program consideration received, increased leased aircraft return accruals including the impacts from the Early Return Agreement, the TSA Reserve, cash received for supplier incentives, and increases to other operational related accruals; and
Previous wording
•$64 million in increases in our air traffic liability primarily driven by increased bookings on higher average fares;
Current wording
•$160 million in increases in our air traffic liability primarily driven by increased bookings on higher average fares; partially offset by
Previous wording
•$82 million in increases in other long-term assets primarily driven by increases in capitalized maintenance and prepaid maintenance;
Current wording
•$114 million in increases in other long-term assets primarily driven by increases in capitalized maintenance and prepaid maintenance;
Previous wording
•$33 million in increases in accounts receivable; and
Current wording
•$62 million in increases in accounts receivable;
Previous wording
•$4 million in increases in accounts payable.
Current wording
•$18 million in decreases in accounts payable; and
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
We generated a net loss of $362 million during the six months ended June 30, 2026, compared to a net loss of $113 million for the six months ended June 30, 2025. Considering the aforementioned non-GAAP adjustments and related $10 million of tax impacts, our adjusted net loss, a non-GAAP measure, was $90 million for the six months ended June 30, 2026. There were no non-GAAP adjustments during the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Income Taxes. Our effective tax rate for the three months ended June 30, 2026 was a benefit of 4.3% on pre-tax loss, compared to 0% on a pre-tax loss for the three months ended June 30, 2025. The primary difference between the effective tax rate and the federal statutory rate was related to the increase in our allowance relating to U.S. federal and state net operating loss. Please refer to “Notes to Condensed Consolidated Financial Statements — 10. Income Taxes” for additional information.
Current report — wording carried from elsewhere
(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 GAAP to Non-GAAP Financial Data.”
Current report — wording carried from elsewhere
Salaries, Wages and Benefits. Salaries, wages and benefits expense increased by $34 million, or 7%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was primarily due to higher crew costs, as compared to the corresponding prior year period.
Current report — wording carried from elsewhere
Sales and Marketing. Sales and marketing expense increased by $11 million, or 14%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to an increase in credit card fees as a result of the 23% increase in total operating revenue, partially offset by a decrease in third-party distribution channel fees. The following table presents our distribution channel mix:
Current report — wording carried from elsewhere
Depreciation and Amortization. Depreciation and amortization expense increased by$77 million, or 188%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to the accelerated depreciation on capitalized maintenance costs related to the Early Return Agreement and an increase in capitalized maintenance depreciation due to a larger fleet.
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(c)We entered into the Early Return Agreement to early terminate the leases associated with 24 A320neo aircraft and as a result incurred non-recurring charges of $70 million during the three months ended June 30, 2026. The $70 million includes $44 million of lease return costs recorded in aircraft rent and $26 million of accelerated depreciation expense related to the remeasurement of useful lives of capitalized maintenance. See “Notes to Condensed Consolidated Financial Statements — 6. Operating Leases” for additional information.
Current report — wording carried from elsewhere
(d)Adjusted CASM is included as supplemental disclosure because we believe it is a useful metric to properly compare our cost management and performance to other peers, as derivations of Adjusted CASM are well-recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in the airline industry. Additionally, we believe this metric is useful because it removes certain items that may not be indicative of our base operating performance or future results. Adjusted CASM is not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Current report — wording carried from elsewhere
(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 Adjusted CASM including net interest is useful because it removes certain items that may not be indicative of our base operating performance or future results. Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Current report — wording carried from elsewhere
Reconciliation of GAAP to Non-GAAP Financial Data
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(a)Cost per ASM figures may not recalculate due to rounding.