Frontier's average fare rose 71% but it lost money as fuel costs soared

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Frontier's record third-quarter revenue of $1.4 billion rose 53%, yet its net loss grew from $77 million to $104 million

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Frontier Airlines widened its third-quarter net loss to $104 million, compared with $77 million in the same period last year, as higher fuel costs outpaced record revenue of $1.4 billion, the company said on Wednesday.

Total revenue rose 53% from the year-earlier quarter. Average fare revenue per passenger climbed 71% to $67.82 from $39.74. Total revenue per passenger, which includes fees, rose 30% to $138.22. Passengers increased 18% to about 9.8 million.

Aircraft fuel expense rose 82% to $425 million. The average price was $3.96 a gallon, up 56% from a year earlier, which added about $150 million in expense on this quarter's fuel use.

Excluding $143 million in pre-tax charges, Frontier reported adjusted net income of $40 million, or 18 cents per share. The charges include $134 million tied to the early return of 13 A320neo leases. The airline said the adjusted result came despite an average fuel price that was 26 cents a gallon higher than it assumed when it issued guidance.

"Frontier's revenue execution in a higher than expected fuel environment resulted in an adjusted profit, meaningfully above the Company's guidance and Wall Street estimates," President and CEO Jimmy Dempsey said in a statement.

Frontier issued fourth-quarter guidance spanning a 15-cent adjusted per-share loss at the low end and a 5-cent adjusted per-share profit at the high end. The company expects revenue per available seat mile to rise more than 20% from the year-earlier quarter and capacity to grow 5% to 6%. It estimates fuel will average $4.75 a gallon in the fourth quarter.

The company said elevated fuel prices are an expected cost headwind for the fourth quarter.

Frontier ended the quarter with $1.18 billion in total liquidity, up slightly from the prior quarter. Its capacity rose 18% in the quarter, while its load factor fell to 78.8% from 80.7%.

Frontier stock climbed over 9% during Wednesday's session.

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