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What changed in Frontier Group Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Frontier Group Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+496 added−497 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-18)

Top changes in Frontier Group Holdings, Inc.'s 2025 10-K

496 paragraphs added · 497 removed · 407 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

106 edited+20 added−21 removed85 unchanged
Biggest changeWe intend to continue to utilize our disciplined and methodical approach to expand our network in an efficient manner, including by: • strategically deploying our capacity where demand is highest; • reducing off-peak flights to focus on higher demand and more profitable demand days; • continuing to take advantage of opportunities in overpriced and/or underserved markets across the United States and select international destinations in the Americas; • leveraging our diverse geographic footprint and existing crew and maintenance base infrastructure to take advantage of lower-risk network growth opportunities while maintaining high operational standards; • utilizing our low-cost structure to offer low fares which organically drive growth through market stimulation; • enhancing our out-and-back scheduling approach, which we believe will help drive improved efficiencies and operational recoverability, as well as reducing crew travel costs; • continuing to rebalance our network to mitigate seasonal fluctuations in our results and discontinue underperforming routes; and • focusing on what we believe are the most profitable opportunities where our cost differential drives the largest competitive advantage. 5 Our Talented ULCC Leadership Team.
Biggest changeWe intend to continue to utilize our disciplined and methodical approach to expand our network in an efficient manner, including by: • strategically deploying our capacity in high-volume markets that deliver stronger and more consistent revenue performance across the year; • continuing to take advantage of opportunities in overpriced and/or underserved markets across the United States and select international destinations in the Americas; • leveraging our diverse geographic footprint and existing crew and maintenance base infrastructure to take advantage of lower-risk network growth opportunities while maintaining high operational standards; • utilizing our low-cost structure to offer low fares which organically drive growth through market stimulation, focusing on what we believe are the most profitable opportunities where our cost differential drives the largest competitive advantage; • enhancing our out-and-back scheduling approach, which we believe will help drive improved efficiencies and operational recoverability, as well as reduce crew travel costs; and • continuing to rebalance our network to mitigate seasonal fluctuations in our results and discontinue underperforming routes.
From the perspective of our customers, our business model provides a product offering that combines low-cost fares with dependable customer service, a customer-friendly digital platform, a rewarding frequent flyer program, a modern fleet, comfortable cabin seating, flexible optional and bundled services and operational integrity.
From the perspective of our customers, our business model provides a product offering that combines low-cost fares with dependable customer service, a customer-friendly digital platform, a modern fleet, comfortable cabin seating, a rewarding frequent flyer program, flexible optional and bundled services, and operational integrity.
In January 2020, the DOT published a NPRM regarding short-term improvements, including with respect to the accessibility features of lavatories and onboard wheelchair requirements on certain single-aisle aircraft with an FAA certificated maximum capacity of 125 seats or more, training flight attendants to proficiency on an annual basis to provide assistance in transporting qualified individuals with disabilities to and from the lavatory from their aircraft seat and providing certain information on request to qualified individuals with a disability or persons inquiring on their behalf, on the carrier’s website and in printed or electronic form on the aircraft, concerning the accessibility of aircraft lavatories.
In January 2020, the DOT published a NPRM regarding short-term improvements, including with respect to the accessibility features of lavatories and onboard wheelchair requirements on certain single-aisle aircraft with an FAA certificated maximum 18 capacity of 125 seats or more, training flight attendants to proficiency on an annual basis to provide assistance in transporting qualified individuals with disabilities to and from the lavatory from their aircraft seat and providing certain information on request to qualified individuals with a disability or persons inquiring on their behalf, on the carrier’s website and in printed or electronic form on the aircraft, concerning the accessibility of aircraft lavatories.
Environmental Regulation Environmental Compliance Requirements We are subject to various federal, state, foreign and local laws and regulations relating to the environment and those affecting matters such as air emissions, including greenhouse gas (“GHG”) emissions, noise reduction, discharges to surface and subsurface waters, safe drinking water, and the use, management, release, discharge and disposal of, and exposure to, hazardous waste, materials and chemicals.
Environmental Regulation Environmental Compliance Requirements We are subject to various federal, state, foreign and local laws and regulations relating to the environment and those affecting matters such as air emissions, including greenhouse gas (“GHG”) emissions, noise reduction, 19 discharges to surface and subsurface waters, safe drinking water, and the use, management, release, discharge and disposal of, and exposure to, hazardous waste, materials and chemicals.
For additional information, please see “Risk Factors — Risks Related to Our Industry — We are subject to extensive regulation by the FAA, the DOT, the TSA, the CBP and other U.S. and foreign governmental agencies, compliance with which could cause us to incur increased costs and adversely affect our business, results of operations and financial condition,” “— We are subject to risks associated with climate change, including increased regulation of our CO2 emissions, changing consumer preferences and the potential increased impacts of severe weather events on our operations and infrastructure,” “ — We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations and financial condition” and “Risk Factors — Risks Related to Our Business — Changes in legislation, regulation and government policy have 21 affected, and may in the future have a material adverse effect on, our business, results of operations, cash flows and financial condition.” Available Information Our website is located at www.flyfrontier.com .
For additional information, please see “Risk Factors — Risks Related to Our Industry — We are subject to extensive regulation by the FAA, the DOT, the TSA, CBP and other U.S. and foreign governmental agencies, compliance with which could cause us to incur increased costs and adversely affect our business, results of operations and financial condition,” “— We are subject to risks associated with climate change, including increased regulation of our CO2 emissions, changing consumer preferences and the potential increased impacts of severe weather events on our operations and infrastructure,” “ — We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations and financial condition” and “Risk Factors — Risks Related to Our Business — Changes in legislation, regulation and government policy have affected, and 22 may in the future have a material adverse effect on, our business, results of operations, cash flows and financial condition.” Available Information Our website is located at www.flyfrontier.com .
SB 253 requires specific disclosures on the amount of Scope 1, 2 and 3 GHG emissions created by or 20 associated with an organization for any company doing business in California with annual revenue in excess of $1 billion, and SB 261 requires disclosures around climate-related risks and the associated response to those risks, for any company doing business in California with annual revenue in excess of $500 million.
SB 253 requires specific disclosures on the amount of Scope 1, 2 and 3 GHG emissions created by or associated with an organization for any company doing business in California with annual revenue in excess of $1 billion, and SB 261 requires disclosures around climate-related risks and the associated response to those risks, for any company doing business in California with annual revenue in excess of $500 million.
Our F9 Pilot Cadet Program is intended to train the next generation of pilots in as little as 24 months with the direct pathway to become a First Officer. The program, operated in partnership with Airline Transport Pilot (“ATP”) Flight School, allows applicants 13 to complete flight training at over 70 ATP Flight School locations nationwide.
Our F9 Pilot Cadet Program is intended to train the next generation of pilots in as little as 24 months with the direct pathway to become a First Officer. The program, operated in partnership with Airline Transport Pilot (“ATP”) Flight School, allows applicants to complete flight training at over 70 ATP Flight School locations nationwide.
Department of Homeland Security, are responsible for certain civil aviation security matters, including passenger and baggage screening at U.S. airports, and international passenger prescreening prior to entry into or departure from the United States. International flights are subject to 18 customs, border, immigration and similar requirements of equivalent foreign governmental agencies.
Department of Homeland Security, are responsible for certain civil aviation security matters, including passenger and baggage screening at U.S. airports, and international passenger prescreening prior to entry into or departure from the United States. International flights are subject to customs, border, immigration and similar requirements of equivalent foreign governmental agencies.
The DOT also has authority to review certain joint venture agreements, marketing agreements, codesharing agreements and wet-leasing agreements (where one airline provides aircraft and crew to another airline) between carriers and regulates other economic matters such as slot transactions. The DOT has recently engaged in rulemaking with respect to airlines ticketing and fees.
The DOT also has authority to review certain joint venture agreements, marketing agreements, codesharing agreements and wet-leasing agreements (where one airline provides aircraft and crew to another airline) between carriers and regulates other economic matters such as slot transactions. The DOT has recently engaged in rulemaking with respect to airline ticketing and fees.
In-production aircraft that do not meet the standards by 2028 will no longer be able to be produced 19 unless their designs are modified to meet the new standards. Then, in January 2021, the EPA finalized GHG emission standards for new aircraft engines, which are aligned with the 2017 ICAO aircraft engine GHG emission standards.
In-production aircraft that do not meet the standards by 2028 will no longer be able to be produced unless their designs are modified to meet the new standards. Then, in January 2021, the EPA finalized GHG emission standards for new aircraft engines, which are aligned with the 2017 ICAO aircraft engine GHG emission standards.
We also 6 promote and sell products in-flight to enhance the customer experience. We offer a convenient onboard payment system that enables customers to bundle products together to save money, make multiple purchases with a single credit card transaction and provide gratuities to our flight attendants.
We also promote and sell products in-flight to enhance the customer experience. We offer a convenient onboard payment system that enables customers to bundle products together to save money, make multiple purchases with a single credit card transaction and provide gratuities to our flight attendants.
As part of our efforts to decarbonize air transportation, in May 2023, we along with a consortium of other airlines, executed an agreement with CleanJoule, Inc., with a potential right to purchase SAF from CleanJoule once it achieves commercial production.
As part of our efforts to decarbonize air transportation, in May 2023, we along with a consortium of other airlines, executed an agreement with CleanJoule, Inc., with a potential right to purchase domestic SAF from CleanJoule once it achieves commercial production.
Mitchell, our Senior Vice President and Chief Financial Officer, previously served as our Vice President, Finance and Investor Relations, as well as our Chief Accounting Officer, and prior to that, served in various leadership capacities for Starwood Hotels and Resorts Worldwide and Starwood Vacation Ownership; • Howard M.
Mitchell, our Senior Vice President and Chief Financial Officer, previously served as our Vice President, Finance and Investor Relations, as well as our Chief Accounting Officer, and prior to that, served in various leadership capacities for Starwood Hotels and Resorts Worldwide and Starwood Vacation Ownership; 6 • Howard M.
We regularly review our fuel hedging program and, accordingly, the specific hedging instruments we use, the amount of our future hedges and the time period covered by our hedge portfolio vary from time to time depending on our view of market conditions and other factors.
We regularly review and update our fuel hedging program and, accordingly, the specific hedging instruments we use, the amount of our future hedges and the time period covered by our hedge portfolio vary from time to time depending on our view of market conditions and other factors.
Starting in 2033, CORSIA will require airlines to compensate for growth in CO 2 emissions using a formula that will give 85% weight to the growth in aviation sector emissions and 15% weight to the growth in the individual airline’s emissions over the period 2033 through 2035.
Starting in 2033, CORSIA would require airlines to compensate for growth in CO 2 emissions using a formula that will give 85% weight to the growth in aviation sector emissions and 15% weight to the growth in the individual airline’s emissions over the period 2033 through 2035.
Additionally, our A320neo family fleet, along with our use of high-density seating configuration and weight-saving initiatives, have contributed to Frontier having the most fuel-efficient fleet of all major U.S. carriers when measured by available seat miles (“ASMs”) per fuel gallon consumed during the year ended December 31, 2024, which helps us maintain our low-cost structure.
Additionally, our A320neo family fleet, along with our use of high-density seating configuration and weight-saving initiatives, have contributed to Frontier having the most fuel-efficient fleet of all major U.S. carriers when measured by available seat miles (“ASMs”) per fuel gallon consumed during the year ended December 31, 2025, which helps us maintain our low-cost structure.
While our strategy is similar to the business models utilized by other ULCCs, including with respect to low-cost structure, low fares and flexible optional services, we believe Low Fares Done Right differentiates us from other ULCCs as a result of our focus on delivering a family-friendly customer experience with a more upscale look and feel than traditionally experienced on ULCCs globally.
While our strategy is similar to the business models utilized by other ULCCs, including with respect to low-cost structure, low fares and flexible optional services, we believe our strategy differentiates us from other ULCCs as a result of our focus on delivering a family-friendly customer experience with a more upscale look and feel than traditionally experienced on ULCCs globally.
Price competition occurs on a route-by-route basis through price discounts, changes in pricing structures, fare matching, target promotions and frequent flyer initiatives. Airlines typically use discount fares and other promotions to stimulate traffic during normally slower travel periods to generate cash flow and to maximize revenue per available seat mile (“RASM”).
Price competition occurs on a route-by-route basis through price discounts, changes in pricing structures, fare matching, target promotions and frequent flyer initiatives. Airlines typically use discounted fares and other promotions to stimulate traffic during normally slower travel periods to generate cash flow and to maximize revenue per available seat mile (“RASM”).
Although we currently believe our insurance coverage is adequate, we cannot assure that the amount of such coverage will not be changed or that we will not be forced to bear substantial losses from accidents. 15 Foreign Ownership Under federal law and DOT policy, we must be owned and controlled by U.S. citizens.
Although we currently believe our insurance coverage is adequate, we cannot assure that the amount of such coverage will not be changed or that we will not be forced to bear substantial losses from accidents. 16 Foreign Ownership Under federal law and DOT policy, we must be owned and controlled by U.S. citizens.
The costs of complying with our future obligations under CORSIA are uncertain, because there is a significant uncertainty with respect to the future supply and price of carbon offset credits and lower-carbon aircraft fuels. As of December 31, 2024, we have not been required to purchase any carbon offset credits or lower-carbon aircraft fuels for the CORSIA pilot phase.
The costs of complying with our future obligations under CORSIA are uncertain, because there is a significant uncertainty with respect to the future supply and price of carbon offset credits and lower-carbon aircraft fuels. As of December 31, 2025, we have not been required to purchase any carbon offset credits or lower-carbon aircraft fuels for the CORSIA pilot phase.
The information on our website is not part of, and is not incorporated by reference in, this Annual Report on Form 10-K. 22
The information on our website is not part of, and is not incorporated by reference in, this Annual Report on Form 10-K.
Also, in August 2024, the DOT issued a NPRM regarding family seating in air transportation which would require airlines to seat children aged 13 and under next to at least one accompanying adult at no additional cost beyond the fare, subject to limited exceptions. We are still evaluating the impacts of this proposed rule.
Also, in August 2024, the DOT issued a NPRM regarding family seating in air transportation which would require airlines to seat children aged 13 and under next to at least one accompanying adult at no additional cost beyond the fare, subject to limited exceptions. The DOT is still evaluating the impacts of this proposed rule.
While our primary focus is to capture point-to-point demand on the nonstop routes that we serve, we also sell connecting itineraries, providing us with the opportunity to capture demand across a large number of routes beyond our nonstop footprint. 7 Below is a map of the destinations we serve as of our scheduled flights available for sale as of December 31, 2024: We use publicly available data related to existing traffic, fares and capacity in domestic markets, as well as other data sources, to identify growth opportunities.
While our primary focus is to capture point-to-point demand on the nonstop routes that we serve, we also sell connecting itineraries, providing us with the opportunity to capture demand across a large number of routes beyond our nonstop footprint. 8 Below is a map of the destinations we serve as of our scheduled flights available for sale as of December 31, 2025: We use publicly available data related to existing traffic, fares and capacity in domestic markets, as well as other data sources, to identify growth opportunities.
If this legislation or any similar legislation or regulation were enacted, it could fundamentally alter the profitability of our agreement with our co-branded credit card partner and the benefits we provide to our consumers through our co-branded credit card.
If this legislation or any similar legislation or regulation is enacted, it could fundamentally alter the profitability of our agreement with our co-branded credit card partner and the benefits we provide to our consumers through our co-branded credit card.
We also contract with third-party specialists for our heavy airframe maintenance. These contracts cover the majority of our aircraft component inventory acquisition, replacement and repairs, thereby eliminating the need to carry expensive spare parts inventory. We currently have a firm obligation to purchase 187 A320neo family aircraft by the end of 2031.
We also contract with third-party specialists for our heavy airframe maintenance. These contracts cover the majority of our aircraft component inventory acquisition, replacement and repairs, thereby eliminating the need to carry expensive spare parts inventory. 13 We currently have a firm obligation to purchase 168 A320neo family aircraft by the end of 2031.
Draft legislation introduced in the U.S. Congress, referred to as the Protect Your Points Act, similarly aims to regulate the management of frequent flyer programs co-branded credit cards.
Draft legislation introduced in the U.S. Congress, referred to as the Protect Your Points Act, similarly aims to regulate the management of frequent flyer program co-branded credit cards.
In addition, our headquarters is located in a LEED-certified building, which certification indicates buildings designed to achieve energy savings, water efficiency and lower carbon dioxide (“CO 2 ”) emissions. We spent approximately 5% of total revenue on marketing, brand and distribution for each of the years ended December 31, 2024 and 2023.
In addition, our headquarters is located in a LEED-certified building, which certification indicates buildings designed to achieve energy savings, water efficiency and lower carbon dioxide (“CO 2 ”) emissions. We spent approximately 4% and 5% of total revenue on marketing, brand and distribution for each of the years ended December 31, 2025 and 2024, respectively.
After the consideration of planned aircraft returns, we expect to operate a fleet of 280 A320neo family aircraft by the end of 2031, nearly all powered by new engine technology.
After the consideration of planned aircraft returns, we expect to operate a fleet of 292 A320neo family aircraft by the end of 2031, nearly all powered by new engine technology.
In March 2017, the International Civil Aviation Organization (“ICAO”) adopted a new CO 2 emissions standard to reduce the impact of aviation greenhouse gas emissions. The new CO 2 standards apply to new aircraft type designs from 2020, and to aircraft type designs already in production as of 2023.
In March 2017, the International Civil Aviation Organization (“ICAO”) adopted a new CO 2 emissions standard to reduce the impact of aviation GHG emissions. The new CO 2 standards apply to new aircraft type designs from 2020, and to aircraft type designs already in production as of 2023.
During the year ended December 31, 2024, we served approximately 100 airports throughout the United States and international destinations in the Americas.
During the year ended December 31, 2025, we served approximately 100 airports throughout the United States and international destinations in the Americas.
All-You-Can-Fly Pass is a membership launched in the fourth quarter of 2022 that allows members unlimited travel for a specified period of time for a base fare of $0.01 per flight. This service is subject to certain restrictions including availability, the timing of booking and blackout dates and does not include taxes or ancillary charges.
All-You-Can-Fly Pass is a membership that allows members unlimited travel for a specified period of time for a base fare of $0.01 per flight. This service is subject to certain restrictions including availability, the timing of booking and blackout dates and does not include taxes or ancillary charges.
Congress and the President 14 have the authority to prevent “self-help” by enacting legislation that, among other things, imposes a settlement on the parties. Human Capital Management We seek to provide equal employment opportunities and seek to prohibit discrimination in our operations.
Congress and the President have the authority to prevent “self-help” by enacting legislation that, among other things, imposes a settlement on the parties. 15 Human Capital Management We seek to provide equal employment opportunities and to prohibit discrimination in our workforce.
Some of the safety and security measures we have taken include: aircraft security and surveillance, positive bag matching procedures, enhanced passenger and baggage screening and search procedures and securing of cockpit doors. We strive to comply with or exceed health and safety regulation standards.
Safety and Security We prioritize the safety and security of our passengers and employees. Some of the safety and security measures we have taken include: aircraft security and surveillance, positive bag matching procedures, enhanced passenger and baggage screening and search procedures and securing of cockpit doors. We strive to comply with or exceed health and safety regulation standards.
Among other things, recent changes to federal requirements for firefighting foams containing PFAS, as well as related state regulations affecting their use, will require operational changes. In April 2024, the EPA designated two widely used PFAS chemicals, perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”), as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act.
Among other things, recent changes to federal requirements for firefighting foams containing PFAS, as well as related state regulations affecting their use, will require operational changes. In April 2024, the U.S. Environmental Protection Agency (“EPA”) designated two widely used PFAS chemicals, perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”), as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act.
With the continued transition to the higher seat density aircraft as we introduce more A320neo family aircraft into our fleet, we increased our average seats per departure from 199 during the year ended December 31, 2023, to 205 during the year ended December 31, 2024.
With the continued transition to the higher seat density aircraft as we introduce more A320neo family aircraft into our fleet, we increased our average seats per departure from 205 during the year ended December 31, 2024, to 209 during the year ended December 31, 2025.
All-You-Can-Fly Pass, which allows members unlimited travel for a specified period of time for a base fare of $0.01 per flight, subject to certain restrictions. In addition to enhancing the customer experience, these offerings have helped increase our ancillary revenues from $60.55 per passenger in 2021 to $70.29 in 2024.
All-You-Can-Fly Pass, which allows members unlimited travel for a specified period of time for a base fare of $0.01 per flight, subject to certain restrictions. In addition to enhancing the customer experience, these offerings have helped increase our ancillary revenues from $60.55 per passenger in 2021 to $67.57 per passenger in 2025.
Whether these U.S. goals will be achieved and if so, the potential impacts on our business, cannot be predicted at this time.
As a result, whether these U.S. goals will be achieved and if so, the potential impacts on our business, cannot be predicted at this time.
The CORSIA program will be implemented in three phases: A pilot phase that ran from 2021 through 2023, followed by the first phase of the program running from 2024 through 2026 and a second phase beginning in 2027 through 2035.
The CORSIA program will be implemented in three phases: A pilot phase that ran from 2021 through 2023, followed by the first phase of the program running from 2024 through 2026 and a second phase scheduled to begin in 2027 through 2035.
Our competitors and potential competitors include legacy network carriers, LCCs, ULCCs, regional airlines and new entrant airlines. 8 Our principal competitors on domestic routes are American Airlines, Delta Air Lines, United Airlines and Southwest Airlines (which classifies itself as an LCC), which are commonly referred to as the “Big Four” carriers, and Alaska Airlines and Hawaiian Airlines, who recently completed their merger, which together with JetBlue Airways Corporation (which classifies itself as an LCC), are commonly referred to as the “Middle Three” carriers.
Our competitors and potential competitors include legacy network carriers, LCCs, ULCCs, regional airlines and new entrant airlines. 9 Our principal competitors on domestic routes are American Airlines, Delta Air Lines, United Airlines and Southwest Airlines (which classifies itself as a LCC), which are commonly referred to as the “Big Four” carriers, and Alaska Airlines and Hawaiian Airlines, who completed their merger in 2024, which together with JetBlue Airways Corporation (which classifies itself as a LCC), are commonly referred to as the “Middle Three” carriers.
As of December 31, 2024 and 2023, 82% and 79% of our total fleet, respectively, was composed of A320neo family aircraft, which are more fuel-efficient than the prior generation of A320ceo family aircraft.
As of December 31, 2025 and 2024, 85% and 82% of our total fleet, respectively, was composed of A320neo family aircraft, which are more fuel-efficient than the prior generation of A320ceo family aircraft.
For example, as a result of our continuing fleet expansion, most First Officers are eligible for upgrade to Captain within an average of 24 to 36 months of joining us. As of December 31, 2024, approximately 87% of our employees were represented by labor unions under collective bargaining agreements.
For example, as a result of our continuing fleet expansion, First Officers are eligible for upgrade to Captain within an average of 24 to 36 months of joining us. 14 As of December 31, 2025, approximately 86% of our employees were represented by labor unions under collective bargaining agreements.
Aircraft Emissions and Climate Change Requirements Concern about climate change and greenhouse gases may result in additional regulation and taxation of aircraft emissions in the United States and abroad.
Aircraft Emissions and Climate Change Requirements Concern about climate change and GHGs may result in additional regulation and taxation of aircraft emissions in the United States and abroad.
We believe we are “America’s Greenest Airline” as measured by fuel efficiency (ASMs per fuel gallon consumed during the year ended December 31, 2024; compared to all other major U.S. carriers), generating over 100 ASMs per gallon during the year ended December 31, 2024, representing our continued focus on fuel efficiency as we grow.
We believe we are “America’s Greenest Airline” as measured by fuel efficiency (ASMs per fuel gallon consumed during the year ended December 31, 2025; compared to all other major U.S. carriers), generating almost 110 ASMs per gallon, representing our continued focus on fuel efficiency as we grow.
We believe we are currently in compliance with these ownership provisions. Please see “Risk Factors—Risks Related to Owning Our Common Stock—Our amended and restated certificate of incorporation and amended and restated bylaws include provisions limiting ownership, control and voting by non-U.S. citizens.” Seasonality and Other Factors The air transportation business and our route network are subject to seasonal fluctuations.
Please see “Risk Factors—Risks Related to Owning Our Common Stock—Our amended and restated certificate of incorporation and amended and restated bylaws include provisions limiting ownership, control and voting by non-U.S. citizens.” Seasonality and Other Factors The air transportation business and our route network are subject to seasonal fluctuations.
We intend to replace retired aircraft with A320neo family aircraft. 11 As of December 31, 2024, we had a firm purchase commitment with Airbus to acquire 187 A320neo family aircraft. Additionally, we had commitments with Pratt & Whitney for 11 additional spare aircraft engines by the end of 2031.
We intend to replace retired aircraft with A320neo family aircraft. As of December 31, 2025, we had a firm purchase commitment with Airbus to acquire 168 A320neo family aircraft. Additionally, we had commitments with Pratt & Whitney for 21 additional spare aircraft engines by the end of 2031.
Our fuel consumption and costs were as follows: Year Ended December 31, 2024 2023 Gallons consumed (millions) 381 365 Average price per gallon (a) $ 2.73 $ 3.10 __________________ (a) Average price per gallon includes related fuel fees and taxes. We have historically maintained an active hedging program designed to reduce our exposure to sudden, sharp increases in fuel prices.
Our fuel consumption and costs were as follows: Year Ended December 31, 2025 2024 Gallons consumed (millions) 376 381 Average price per gallon (a) $ 2.47 $ 2.73 __________________ (a) Average price per gallon includes related fuel fees and taxes. We have historically maintained a hedging program designed to reduce our exposure to sudden, sharp increases in fuel prices.
Such additional options include carry-on and checked baggage, advance seat selection, our extended-legroom premium seats, guaranteed empty middle seats in certain rows and First Class seating in the first two rows beginning in late 2025, priority boarding and ticket changes and cancellations, as well as bundled options combining various optional services.
Such additional options include carry-on and checked baggage, advance seat selection, our extended-legroom premium seats, guaranteed empty middle seats in certain rows, First Class seating in the first two rows beginning in 2026, free priority boarding for our loyalty members and bundle customers, and ticket changes and cancellations, as well as bundled options combining various optional services.
These regulations apply to airplanes manufactured after January 1, 2028, as well as to uncertified large business and commercial jet aircrafts. The new requirements took effect in April 2024. The U.S.
These regulations, which took effect in April 2024, apply to airplanes manufactured after January 1, 2028, as well as to uncertified large business and commercial jet aircrafts.
As of December 31, 2024, all 159 aircraft in our fleet were financed under operating leases, and the operating leases for 2, 9, 14, 14 and 13 aircraft in our fleet were scheduled to terminate during 2025, 2026, 2027, 2028 and 2029, respectively. In certain circumstances, such operating leases may be extended.
As of December 31, 2025, all 176 aircraft in our fleet were financed under operating leases, and the operating leases for 0, 7, 14, 13 and 12 aircraft in our fleet were scheduled to terminate during 2026 2027, 2028, 2029 and 2030, respectively. In certain circumstances, such operating leases may be extended.
Debt”): • $329 million of the available $478 million under our multiple pre-delivery deposit (“PDP”) credit facilities, which consist of the PDP Financing Facility, the Second PDP Financing Facility and the Third PDP Financing Facility, each as defined within “Notes to Consolidated Financial Statements — Note 8.
Debt”): • $348 million of the available $391 million under our multiple pre-delivery deposit (“PDP”) credit facilities, which consists of the PDP Financing Facility, the Second PDP Financing Facility and the Third PDP Financing Facility, each as defined within “Notes to Consolidated Financial Statements — Note 7.
ITEM 1. BUSINESS Overview Frontier Group Holdings, Inc. is the parent company of Frontier Airlines, Inc. (“Frontier”), an ultra low-cost carrier whose business strategy is focused on Low Fares Done Right . We are headquartered in Denver, Colorado and offer flights throughout the United States and to select near international destinations in the Americas.
ITEM 1. BUSINESS Overview Frontier Group Holdings, Inc. is the parent company of Frontier Airlines, Inc. (“Frontier” or “the Company”), an ultra low-cost carrier. We are headquartered in Denver, Colorado and offer flights throughout the United States and to select near international destinations in the Americas.
Approximately 71.7% and 71.6% of our total tickets sold for the years ended December 31, 2024 and 2023, respectively, were sold directly to our customers through these distribution channels. Sales through our website and mobile app represent our low-cost distribution channels.
Approximately 70% and 72% of our total tickets sold for the years ended December 31, 2025 and 2024, respectively, were sold directly to our customers through these distribution channels. Sales through our website and mobile app generally represent our low-cost distribution channels.
Our Fares and the Choices We Offer We provide low-fare passenger airline service primarily to leisure travelers. Our low fares are designed to stimulate demand from price-sensitive travelers and consist of a base fare, plus taxes and governmental fees. We combine our low fares with flexible optional services for an additional cost.
Our low fares are designed to stimulate demand from price-sensitive travelers and consist of a base fare, plus taxes and governmental fees. We combine our low fares with flexible optional services for an additional cost.
The following table represents our revenue, on a per-passenger basis for the periods presented: Year Ended December 31, 2024 2023 Fare revenue per passenger $ 43.09 $ 42.26 Ancillary revenue per passenger: Non-fare passenger revenue per passenger 67.50 73.85 Other revenue per passenger 2.79 2.66 Total ancillary revenue per passenger 70.29 76.51 Total revenue per passenger $ 113.38 $ 118.77 Route Network The low unit cost, high quality of service and dependability that make Low Fares Done Right successful have enabled us to diversify our network across a wide range of leisure destinations, as well as implement a network strategy that primarily targets high demand or underserved markets where our low fares stimulate new traffic flows.
The following table represents our revenue, on a per-passenger basis for the periods presented: Year Ended December 31, 2025 2024 Fare revenue per passenger $ 44.60 $ 43.09 Ancillary revenue per passenger: Non-fare passenger revenue per passenger 63.79 67.50 Other revenue per passenger 3.78 2.79 Total ancillary revenue per passenger 67.57 70.29 Total revenue per passenger $ 112.17 $ 113.38 Route Network The low unit cost, high quality of service and dependability that make our strategy successful have enabled us to diversify our network across a wide range of leisure destinations, as well as implement a network strategy that primarily targets high demand or underserved markets where our low fares stimulate new traffic flows.
Our Competitive Strengths & Our Business Strategy— Low Fares Done Right Our goal is to offer the most attractive option for air travel with a compelling combination of value, product and service, and, in doing so, to grow profitably and enhance our position among U.S. airlines.
Our Competitive Strengths & Our Business Strategy Our goal is to offer the most attractive option for air travel with a compelling combination of value, product and service, and, in doing so, to grow profitably and enhance our position among U.S. airlines. Through the key elements of our business strategy, we seek to achieve: Low Unit Costs.
We intend to strengthen and maintain our low unit costs, including by: • maintaining high utilization levels, particularly on peak travel days; • utilizing new generation, fuel-efficient aircraft that deliver lower operating costs compared to prior generation aircraft; • increasing the average size and seat capacity of the aircraft in our fleet through the continued introduction and operation of 186-seat A320neo aircraft and 240-seat A321neo aircraft; • utilizing a low-cost distribution model, with our services primarily sold through direct distribution channels including our website, mobile app and contact centers; • maintaining a highly productive workforce and third-party specialist providers; • outsourcing certain functions, including customer contact centers, lost bag services, ground handling services and catering services; and • taking a disciplined approach to our operational performance in order to reduce disruption. 4 A Superior Low-Fare Brand.
We intend to strengthen and maintain our low unit costs, including by: • maintaining high utilization levels, deploying our capacity where demand is highest; • utilizing new generation, fuel-efficient aircraft that deliver lower operating costs compared to prior generation aircraft; • increasing the average size and seat capacity of the aircraft in our fleet through the continued introduction and operation of 240-seat A321neo aircraft; • utilizing a low-cost distribution model, with our services primarily sold through direct distribution channels including our website, mobile app and contact centers; • maintaining a highly productive workforce and third-party specialist providers; • outsourcing certain functions, such as customer contact centers, lost bag services, ground handling services and catering services; and • taking a disciplined approach to our operational performance in order to reduce disruption. 5 Delivering Industry-Leading Values at Low Fares.
See “Risk Factors — Risk Related to Our Business — Our maintenance costs will increase over the near term, we will periodically incur substantial maintenance costs due to the maintenance schedules of our aircraft fleet and obligations to the lessors and we could incur significant maintenance expenses outside of such maintenance schedules in the future.” Human Capital Resources Employees and Labor Relations As of December 31, 2024, we had 7,938 total employees, consisting of 2,202 pilots, 4,060 flight attendants, 503 aircraft technicians, 51 aircraft appearance agents, 47 flight dispatchers, 24 material specialists, 24 maintenance controllers and 1,027 employees in administrative roles.
See “Risk Factors — Risk Related to Our Business — Our maintenance costs will increase over the near term, we will periodically incur substantial maintenance costs due to the maintenance schedules of our aircraft fleet and obligations to the lessors and we could incur significant maintenance expenses outside of such maintenance schedules in the future.” Human Capital Resources Employees and Labor Relations As of December 31, 2025, we had approximately 7,750 total employees, consisting of approximately 2,300 pilots, 3,700 flight attendants, 500 aircraft technicians, 150 employees across aircraft appearance agents, flight dispatchers, material specialists, and maintenance controllers and 1,100 employees in administrative roles.
In October 2022, the DOT issued a NPRM which would require airlines and travel agents to increase disclosure of bag fees, change and cancellation fees and family seating fees during the ticket purchase process in an effort to improve the transparency of airline pricing. The final rule was published in April 2024.
In October 2022, the DOT issued a Notice of Proposed Rulemaking (“NPRM”) which would require airlines and travel agents to increase disclosure of bag fees, change and cancellation fees and family seating fees during the ticket purchase process in an effort to improve the transparency of airline pricing.
Recent actions by the Trump Administration have signaled a shift in federal climate and energy policies, including the potential rollback of existing climate-related policies, regulations and initiatives, such as the Inflation Reduction Act. Changes in United States’ climate policies and regulations under the new administration may impact our business, operations, and financial condition.
Recent actions by the U.S. government have signaled a shift in federal climate and energy policies, including the rollback of existing air-and climate-related policies, regulations and initiatives, such as the Inflation Reduction Act. Changes in U.S. climate policies and regulations may impact our business, operations, and financial condition.
The table below sets forth our employee groups and status of the collective bargaining agreements with each as of December 31, 2024: Percentage of Workforce Employee Group Representative Amendable Date (a) December 31, 2024 Pilots Air Line Pilots Association (ALPA) January 2024 (b) 28% Flight Attendants Association of Flight Attendants (AFA-CWA) May 2024 (c) 51% Aircraft Technicians International Brotherhood of Teamsters (IBT) May 2025 6% Aircraft Appearance Agents IBT October 2023 (d) 1% Dispatchers Transport Workers Union (TWU) August 2028 1% Material Specialists IBT March 2022 (d) Maintenance Controllers IBT October 2023 (d) __________________ (a) Subject to standard early opener provisions.
The table below sets forth our employee groups and status of the collective bargaining agreements with each as of December 31, 2025: Percentage of Workforce Employee Group Representative Amendable Date (a) December 31, 2025 Pilots Air Line Pilots Association (“ALPA”) January 2024 (b) 29% Flight Attendants Association of Flight Attendants (“AFA-CWA”) May 2024 (c) 48% Aircraft Technicians International Brotherhood of Teamsters (“IBT”) May 2025 (d) 6% Aircraft Appearance Agents IBT July 2030 1% Dispatchers Transport Workers Union (“TWU”) August 2028 1% Material Specialists IBT November 2030 (e) 1% Maintenance Controllers IBT December 2030 (f) __________________ (a) Subject to standard early opener provisions.
If regulatory or legislative efforts to impose restrictions on airline loyalty programs were successful, they could materially reduce the revenues we derive from our FRONTIER Miles loyalty program and adversely impact our results of operations. Security Regulation The TSA and the CBP, each a division of the U.S.
If regulatory or legislative efforts to impose restrictions on airline loyalty programs are successful, they could materially reduce the revenues we derive from our FRONTIER Miles loyalty program and adversely impact our results of operations.
As of December 31, 2024, we had a fleet of 159 Airbus single-aisle aircraft, consisting of 8 A320ceos, 82 A320neos, 21 A321ceos and 48 A321neos. As of December 31, 2024, the average aircraft age of our fleet was approximately five years.
As of December 31, 2025, we had a fleet of 176 Airbus single-aisle aircraft, consisting of 6 A320ceos, 89 A320neos, 21 A321ceos and 60 A321neos. As of December 31, 2025, the average aircraft age of our fleet was approximately five years.
In September 2021, the Sustainable Aviation Fuel Grand Challenge was launched, built upon by the FAA’s Aviation Climate Action Plan published in 2021 and updated in 2024, which outlines plans to scale up the production of SAF, which aims to reduce GHG emissions from aviation by 20% by 2030 and to replace all traditional aviation fuel with SAF by 2050.
In September 2021, the Sustainable Aviation Fuel Grand Challenge was launched, built upon by the FAA’s Aviation Climate Action Plan published in 2021 and updated in 2025, which outlines plans to scale up the production of SAF, which aims to reduce GHG emissions from aviation by 50%, producing 3 billion gallons of SAF by 2030, and meeting domestic aviation fuel demand by 2050.
Each of our aircraft features one of our widely-recognized animals on its tail and is named after such animal. We utilize these animals in several of our online marketing campaigns and on the novelty cards we distribute to children onboard, particularly highlighting endangered species. 9 Our brand includes our focus on sustainability and environmental responsibility efforts.
We utilize these animals in several of our online marketing campaigns and on the novelty cards we distribute to children onboard, particularly highlighting endangered species. Our brand includes our focus on sustainability and environmental responsibility efforts.
As of December 31, 2024, we had a fleet of 159 Airbus single-aisle aircraft, consisting of 8 A320ceos, 82 A320neos, 21 A321ceos and 48 A321neos. Our unique strategy is underpinned by our low-cost structure and superior low-fare brand. Our Business Model Our business model is based on our unique Low Fares Done Right strategy.
As of December 31, 2025, we had a fleet of 176 Airbus single-aisle aircraft, consisting of 6 A320ceos, 89 A320neos, 21 A321ceos and 60 A321neos. Our unique strategy is underpinned by our low-cost structure and superior low-fare brand. Our Business Model Our business model is based on our unique ULCC strategy and customer offerings.
At the end of a “cooling off” period, unless an agreement is reached or action is taken by the U.S. Congress, the labor organization may strike and the airline may resort to “self-help,” including the imposition of any or all of its proposed amendments and the hiring of new employees to replace any striking workers. The U.S.
Congress, the labor organization may strike and the airline may resort to “self-help,” including the imposition of any or all of its proposed amendments and the hiring of new employees to replace any striking workers. The U.S.
Diamond, our Executive Vice President, Legal and Corporate Affairs and Corporate Secretary, previously served as Vice President, General Counsel and Corporate Secretary for Thales USA; • Robert A. Schroeter, our Senior Vice President, Chief Commercial Officer, previously served as Senior Vice President, Chief Marketing Officer for Spirit Airlines; • Trevor J.
Diamond, our Executive Vice President, Legal and Corporate Affairs and Corporate Secretary, previously served as Vice President, General Counsel and Corporate Secretary for Thales USA; • Robert A.
Circuit have denied multiple petitions to block the EPA’s standards. The outcome of any development of new aircraft GHG emissions standards cannot be predicted at this time.
The outcome of any development of new aircraft GHG emissions standards cannot be predicted at this time.
We categorize our line maintenance into four classes of stations, with each class categorized by the scope and 12 complexity of work performed. The majority of, and the most extensive, line maintenance we and our specialist partners perform is conducted in Puerto Rico, Tampa, Atlanta, Cleveland, Denver, Dallas, Las Vegas, Orlando, Philadelphia and Phoenix.
The majority of, and the most extensive, line maintenance we and our specialist partners perform is conducted in Puerto Rico, Tampa, Atlanta, Cleveland, Denver, Dallas, Las Vegas, Orlando, Philadelphia and Phoenix.
Under the RLA, after receipt of such notice, the parties must meet for direct negotiations, and if no agreement is reached, either party may request the NMB to appoint a federal mediator. The RLA prescribes no set timetable for the direct negotiation and mediation process.
If either party wishes to modify the terms of any such agreement, they must notify the other party in the manner agreed to by the parties. Under the RLA, after receipt of such notice, the parties must meet for direct negotiations, and if no agreement is reached, either party may request the NMB to appoint a federal mediator.
If we decide to increase our routes to additional international destinations, we will be required to obtain necessary authority from the DOT, and/or approvals from 16 the FAA, as well as any applicable foreign government entity. In addition, we are required to comply with overfly regulations in countries that lay along our routes but which we do not serve.
If we decide to increase our routes to additional international destinations, we will be required to obtain necessary authority from the DOT, and/or approvals from the FAA, as well as any applicable foreign government entity.
Either party may decline to submit to arbitration. If arbitration is rejected by either party, a 30-day “cooling off” period commences. During (or after) that period, a Presidential Emergency Board (“PEB”) may be established, which examines the parties’ positions and recommends a solution. The PEB process lasts for 30 days and is followed by another 30-day “cooling off” period.
During (or after) that period, a Presidential Emergency Board (“PEB”) may be established, which examines the parties’ positions and recommends a solution. The PEB process lasts for 30 days and is followed by another 30-day “cooling off” period. At the end of a “cooling off” period, unless an agreement is reached or action is taken by the U.S.
Member countries can voluntarily participate in the pilot and first phases, while participation in the second phase is mandatory for certain countries, including the United States. The U.S. government has not yet enacted legislation to mandate that U.S. operators participate in CORSIA.
Member countries can voluntarily participate in the pilot and first phases, while participation in the second phase is mandatory for certain countries, including the United States.
We also launched One Pass Select, which is a subscription-based fitness program for our employees that allows members access to a nationwide network of participating gyms and fitness centers. Our compensation philosophy is continuously adjusted to better meet the standards set in the marketplace. Safety and Security We prioritize the safety and security of our passengers and employees.
We offer benefits to employees such as access to Maven fertility, infertility and adoption solution support as well as a subscription-based fitness program for our employees that allows members access to a nationwide network of participating gyms and fitness centers. Our compensation philosophy is continuously adjusted to better meet the standards set in the marketplace.
The Discount Den is an annual membership-based service that allows members exclusive access to the lowest fares we offer and first access to seats when our selling schedule is extended. Members pay an annual fee to join the Discount Den . The GoWild!
Recent enhancements to the program include first and second checked bag fees waived, companion travel vouchers, and priority boarding. Discount Den is an annual membership-based service that allows members exclusive access to low fares and first access to seats when our selling schedule is extended. Members pay an annual fee to join the Discount Den . The GoWild!
Through the key elements of our business strategy, we seek to achieve: Low Unit Costs. Our low-cost structure, built around low aircraft ownership cost, fuel efficiency and low operational costs, is our key strategic advantage.
Our low-cost structure, built around low aircraft ownership cost, fuel efficiency and low operational costs, is our key strategic advantage.
Our firm fleet and spare engine commitments as of December 31, 2024 were composed of the following aircraft: A320neo A321neo Total Aircraft (a) Engines Year Ending 2025 8 13 21 2 2026 7 15 22 4 2027 8 26 34 3 2028 4 30 34 2 2029 — 36 36 — Thereafter — 40 40 — Total 27 160 187 11 __________________ (a) While the schedule presented above reflects the contractual delivery dates as of December 31, 2024, we have recently experienced delays in the deliveries of Airbus aircraft which may persist in future periods.
Our firm fleet and spare engine commitments as of December 31, 2025 were composed of the following aircraft: A320neo A321neo Total Aircraft (a) Engines Year Ending 2026 8 16 24 2 2027 8 26 34 3 2028 4 30 34 2 2029 — 36 36 5 2030 — 28 28 — Thereafter — 12 12 9 Total 20 148 168 21 __________________ (a) While the schedule presented above reflects the contractual delivery dates as of December 31, 2025, we continue to experience delays in the deliveries of Airbus aircraft which may persist in future periods. 12 Aircraft Fuel Aircraft fuel is one of our largest expenses, representing 24% and 28% of our total operating costs for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024 and 2023, we had no fuel cash flow hedges for future fuel consumption, and fuel hedges had no material impact within our consolidated statements of operations for the years ended December 31, 2024 and 2023. Maintenance and Repairs We have an FAA mandated and approved maintenance program, which is administered by our technical operations department.
As of December 31, 2025 and 2024, we had no outstanding fuel cash flow hedges for future fuel consumption, and fuel hedges had no material impact within our consolidated statements of operations for the years ended December 31, 2025 and 2024.
As of December 31, 2024, we had $935 million of total available liquidity, consisting of $730 million in unrestricted cash and cash equivalents and $205 million in total undrawn capacity on our revolving loan facility, and our capital structure was comprised of the following (please refer to “Notes to Consolidated Financial Statements — 8.
As of December 31, 2025, our total available liquidity was $874 million, consisting of $654 million in unrestricted cash and cash equivalents and $220 million from the undrawn revolving line of credit (the “Revolving Loan Facility”), and our capital structure was comprised of the following (please refer to “Notes to Consolidated Financial Statements — Note 7.
While we are primarily focused on stimulating leisure and VFR travel, we believe our low fares do 10 attract a significant number of business travelers who may be more sensitive to travel costs and have made increased efforts to do so with the aforementioned Biz Fare program.
While we are primarily focused on stimulating leisure and VFR travel, we believe our low fares do attract a significant number of business travelers who may be more sensitive to travel costs and have made increased efforts to do so with the aforementioned membership programs. 11 Fleet We fly only Airbus A320 family aircraft, which provides us significant operational and cost advantages compared to airlines that operate multiple fleet types.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs of December 31, 2024, approximately 87% of our workforce was represented by labor unions, including a number of employees covered by collective bargaining agreements that are amendable. We are currently in negotiations with our pilots, flight attendants, aircraft technicians, aircraft appearance agents, material specialists and maintenance controllers regarding their next labor contracts. See “Business—Human Capital Resources”.
Biggest changeOur business is labor intensive, with labor costs representing approximately 26% of our total operating costs for each of the years ended December 31, 2025 and 2024. As of December 31, 2025, approximately 86% of our workforce was represented by labor unions, including a number of employees covered by collective bargaining agreements that are amendable.
Aircraft utilization is reduced by delays and cancellations caused by various factors, many of which are beyond our control, including air 41 traffic congestion at airports or other air traffic control problems or outages, labor availability, adverse weather conditions, increased security measures or breaches in security, international or domestic conflicts, terrorist activity or other changes in business conditions.
Aircraft utilization is reduced by delays and cancellations caused by various factors, many of which are beyond our control, including air traffic congestion at airports or other air traffic control problems or outages, labor availability, adverse weather conditions, 41 increased security measures or breaches in security, international or domestic conflicts, terrorist activity or other changes in business conditions.
The amount and timing of these so-called “return conditions” costs can prove unpredictable due to uncertainty regarding the maintenance status of each particular aircraft at the time it is to be returned, and it is not unusual for disagreements to ensue between the airline and the leasing company as to the required maintenance on a given aircraft or engine.
The amount and timing of these so-called “return conditions” costs can prove unpredictable due to uncertainty regarding the maintenance status of each particular aircraft and engine at the time it is to be returned, and it is not unusual for disagreements to ensue between the airline and the leasing company as to the required maintenance on a given aircraft or engine.
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including, but not limited to: • announcements concerning our competitors, suppliers, the airline industry or the economy in general; • strategic actions by us or our competitors, such as acquisitions or restructurings; • media reports and publications about the safety of our aircraft or engines or the type of aircraft we operate; • new regulatory pronouncements and changes in regulatory guidelines; • the impact of pandemics and other public health threats on air travel and any related government restrictions impacting air travel; • changes in the price or availability of aircraft fuel; • announcements concerning the availability of the type of aircraft we operate; • general and industry-specific economic conditions; • general market, political and other economic conditions, including economic slowdowns, recessions, inflationary pressures, rising interest rates, financial market fluctuations and reduced credit availability; • regional and global conflicts; • changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations; • sales of our common stock or other actions by investors with significant shareholdings; and • trading strategies related to changes in fuel or oil prices.
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including, but not limited to: • announcements concerning our competitors, suppliers, the airline industry or the economy in general; • strategic actions by us or our competitors, such as acquisitions or restructurings; • media reports and publications about the safety of our aircraft or engines or the type of aircraft we operate; • new regulatory pronouncements and changes in regulatory guidelines; • the impact of pandemics and other public health threats on air travel and any related government restrictions impacting air travel; • changes in the price or availability of aircraft fuel; • announcements concerning the availability of the type of aircraft or engines we operate; • general and industry-specific economic conditions; • general market, political and other economic conditions, including economic slowdowns, recessions, inflationary pressures, rising interest rates, financial market fluctuations and reduced credit availability; • regional and global conflicts; • changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations; • sales of our common stock or other actions by investors with significant shareholdings; and • trading strategies related to changes in fuel or oil prices.
Any future issuances or sales of our common stock by us will be dilutive to our existing common stockholders.
Any future issuances or sales of our common stock by us will be dilutive to our existing stockholders.
In addition, our amended and restated certificate of incorporation provides that we shall indemnify each the aforementioned parties in the event of any claims for breach of fiduciary or other duties brought in connection with such other opportunities.
In addition, our amended and restated certificate of incorporation provides that we shall indemnify each of the aforementioned parties in the event of any claims for breach of fiduciary or other duties brought in connection with such other opportunities.
These provisions include, among others: • our board of directors is divided into three classes, with each class serving for a staggered three-year term, which prevents stockholders from electing an entirely new board of directors at an annual meeting; 51 • no cumulative voting in the election of directors, which prevents the minority stockholders from electing director candidates; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • actions to be taken by our stockholders may only be affected at an annual or special meeting of our stockholders and not by written consent; • special meetings of our stockholders may be called only by the Chair of our board of directors or by our corporate secretary at the direction of our board of directors; • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; • a majority stockholder vote is required for removal of a director only for cause (and a director may only be removed for cause), and a 66 2⁄3% stockholder vote is required for the amendment, repeal or modification of certain provisions of our certificate of incorporation and bylaws; and • our board of directors may, without stockholder approval, issue series of preferred stock, or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of discouraging, delaying or preventing a change of control.
These provisions include, among others: • our board of directors is divided into three classes, with each class serving for a staggered three-year term, which prevents stockholders from electing an entirely new board of directors at an annual meeting; • no cumulative voting in the election of directors, which prevents the minority stockholders from electing director candidates; 52 • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • actions to be taken by our stockholders may only be affected at an annual or special meeting of our stockholders and not by written consent; • special meetings of our stockholders may be called only by the Chair of our board of directors or by our corporate secretary at the direction of our board of directors; • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; • a majority stockholder vote is required for removal of a director only for cause (and a director may only be removed for cause), and a 66 2⁄3% stockholder vote is required for the amendment, repeal or modification of certain provisions of our certificate of incorporation and bylaws; and • our board of directors may, without stockholder approval, issue series of preferred stock, or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of discouraging, delaying or preventing a change of control.
Some of our target growth markets outside of the United States include countries with less developed economies that may be vulnerable to unstable economic and political conditions, see “— Risks associated with our presence in international emerging markets, including political or economic instability, and failure to adequately comply with existing legal requirements, may materially adversely affect our business, results of operations and financial condition.” Our low-cost structure is one of our primary competitive advantages, and many factors could affect our ability to control our costs.
Some of our target growth markets outside of the United States include countries with less developed economies that may be vulnerable to unstable economic and political conditions, see “— Risks associated with our presence in international emerging markets, including political or economic instability, and failure to adequately 35 comply with existing legal requirements, may materially adversely affect our business, results of operations and financial condition.” Our low-cost structure is one of our primary competitive advantages, and many factors could affect our ability to control our costs.
If U.S. or global economic conditions are unfavorable or uncertain for an extended period of time, including due to inflationary pressures and/or the disruption, instability and volatility in global markets resulting from the war between Russia and Ukraine and the conflict in the Middle East, it could have a material adverse effect on our business, results of operations and financial condition.
If U.S. or global economic conditions are unfavorable or uncertain for an extended period of time, including due to inflationary pressures and/or the disruption, instability and volatility in global markets resulting 23 from the war between Russia and Ukraine and the conflict in the Middle East, it could have a material adverse effect on our business, results of operations and financial condition.
Compliance with existing and future environmental laws and regulations, including emissions limitations and more restrictive or widespread noise regulations, that may be applicable to us could require significant expenditures, increase our cost base and have a material adverse effect on our business, results of operations and financial condition, and violations thereof can lead to significant fines and penalties, among other sanctions.
Compliance with existing and future environmental laws and regulations, including emissions limitations and more restrictive or widespread noise regulations, that may be applicable to us could require significant expenditures, increase our cost base and have a material adverse effect on 31 our business, results of operations and financial condition, and violations thereof can lead to significant fines and penalties, among other sanctions.
We expect that these new aircraft will require less maintenance when they are first placed in service (sometimes called a “maintenance holiday”) because the aircraft will benefit from manufacturer warranties and also will be able to operate for a significant period of time, generally measured in years, before the most expensive scheduled maintenance obligations, known as heavy maintenance, are first required.
We expect that these new aircraft and engines will require less maintenance when they are first placed in service (sometimes called a “maintenance holiday”) because the aircraft and engines will benefit from manufacturer warranties and also will be able to operate for a significant period of time, generally measured in years, before the most expensive scheduled maintenance obligations, known as heavy maintenance, are first required.
In September 2024, the DOT launched 27 an inquiry into certain airline loyalty programs to investigate potential competition or consumer protection issues in airlines’ administration of these programs and the CFPB recently issued a circular to other law enforcement agencies warning that credit card issuers and their parties could violate federal law by devaluing rewards points and airline miles.
In September 2024, the DOT launched an inquiry into certain airline loyalty programs to investigate potential competition or consumer protection issues in airlines’ administration of these programs and the CFPB recently issued a circular to other law enforcement agencies warning that credit card issuers and their parties could violate federal law by devaluing rewards points and airline miles.
For a discussion of DOT regulations and rulemaking efforts, please see “—We are subject to extensive regulations by the FAA, the DOT, the TSA, the CBP and other U.S. and foreign governmental agencies, compliance with which would cause us to incur increased costs and adversely affect our business, results of operations and financial condition.” We are also subject to the examination of our tax returns and other tax matters by the U.S.
For a discussion of DOT regulations and rulemaking efforts, please see “—We are subject to extensive regulations by the FAA, the DOT, the TSA, CBP and other U.S. and foreign governmental agencies, compliance with which would cause us to incur increased costs and adversely affect our business, results of operations and financial condition.” 29 We are also subject to the examination of our tax returns and other tax matters by the U.S.
See “— Increased labor costs, union disputes, employee strikes and other labor-related disruption may adversely affect our business, results of operations and financial condition.” Further, in an inflationary environment that also exhibits worker and fuel shortages, depending on airline 35 industry and other economic conditions, we may be unable to manage through the resulting increases in our operating costs.
See “— Increased labor costs, union disputes, employee strikes and other labor-related disruption may adversely affect our business, results of operations and financial condition.” Further, in an inflationary environment that also exhibits worker and fuel shortages, depending on airline industry and other economic conditions, we may be unable to manage through the resulting increases in our operating costs.
Moreover, the compromise of our technology systems resulting in the loss, disclosure, misappropriation of or access to the personally identifiable information of our passengers, prospective passengers or personnel could result in governmental investigation, civil liability or regulatory penalties under laws protecting the privacy of personal information, any or all of which could disrupt our operations and have a material adverse effect on our business, results of operations and financial condition.
Moreover, the compromise of our technology systems resulting in the loss, disclosure, misappropriation of or access 47 to the personally identifiable information of our passengers, prospective passengers or personnel could result in governmental investigation, civil liability or regulatory penalties under laws protecting the privacy of personal information, any or all of which could disrupt our operations and have a material adverse effect on our business, results of operations and financial condition.
All such climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to reduce our emissions, make capital investments to purchase specific types of equipment or technologies, purchase carbon offset credits or otherwise incur additional costs related to our 30 emissions, either due to direct regulation on us, regulation on our suppliers or others in our value chain, or otherwise.
All such climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to reduce our emissions, make capital investments to purchase specific types of equipment or technologies, purchase carbon offset credits or otherwise incur additional costs related to our emissions, either due to direct regulation on us, regulation on our suppliers or others in our value chain, or otherwise.
This inspection program began in 2023 and may continue beyond 2026; however this has not materially impacted our operations through December 31, 2024. During 2024, the FAA superseded two Airworthiness Directives related to PW1100 GTF engines. The new Airworthiness Directive imposed additional inspection and maintenance requirements on PW1100 GTF engines, including accelerated replacement of certain engine components.
This inspection program began in 2023 and may continue beyond 2026; however this has not materially impacted our operations through December 31, 2025. During 2024, the FAA superseded two Airworthiness Directives related to PW1100 GTF engines. The new Airworthiness Directive imposed additional inspection and maintenance requirements on PW1100 GTF engines, including accelerated replacement of certain engine components.
In addition, replacement technologies and systems for any service we currently utilize that experiences failures or interruptions may not be readily 45 available on a timely basis, at competitive rates or at all. Furthermore, our current technologies and systems are heavily integrated with our day-to-day operations and any transition to a new technology or system could be complex and time-consuming.
In addition, replacement technologies and systems for any service we currently utilize that experiences failures or interruptions may not be readily available on a timely basis, at competitive rates or at all. Furthermore, our current technologies and systems are heavily integrated with our day-to-day operations and any transition to a new technology or system could be complex and time-consuming.
These alliances, such as Oneworld, SkyTeam and Star Alliance, generally provide for codesharing, frequent flyer program reciprocity, coordinated scheduling of flights to permit convenient connections and other joint marketing activities. In addition, certain of these alliances involve highly integrated antitrust immunized joint ventures. Such arrangements permit an airline to market flights operated by other alliance members as its own.
These alliances, such as Oneworld, SkyTeam and Star Alliance, generally provide for 50 codesharing, frequent flyer program reciprocity, coordinated scheduling of flights to permit convenient connections and other joint marketing activities. In addition, certain of these alliances involve highly integrated antitrust immunized joint ventures. Such arrangements permit an airline to market flights operated by other alliance members as its own.
Whether these U.S. or international goals will be achieved and the potential effects on our business cannot be predicted at this time. If demand for SAF increases beyond the current capacity of SAF production efforts, we may need to pay a significant premium for SAF above the cost of traditional fuel.
Whether these U.S. or international goals will be achieved and the potential effects on our business cannot be predicted at this time. If demand for SAF 30 increases beyond the current capacity of SAF production efforts, we may need to pay a significant premium for SAF above the cost of traditional fuel.
Such activity may also impact us indirectly by increasing our operating costs, including fuel costs. Growing recognition among consumers of the dangers of climate change may mean some customers choose to fly less frequently or fly on an airline they perceive as operating in a manner that is more sustainable to the climate or generally.
Such activity may also impact us indirectly by increasing our operating costs, including fuel costs. Growing recognition among consumers of the dangers of climate change may mean some customers choose to fly less frequently or fly on an airline they perceive as operating in a manner that is more sustainable to the climate.
Any similar litigation against us could result in substantial costs, divert management’s attention and resources and have a material adverse effect on our business, results of operations and financial condition. 50 If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our stock price and trading volume could decline.
Any similar litigation against us could result in substantial costs, divert management’s attention and resources and have a material adverse effect on our business, results of operations and financial condition. If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our stock price and trading volume could decline.
This provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint and any other professional 52 entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
This provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices. Because of the potential risks, expenses and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses.
Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices. Because of the potential risks, expenses and uncertainties of litigation, we may, from 55 time to time, settle disputes, even where we believe that we have meritorious claims or defenses.
Our business could also be materially adversely affected if the public avoids flying on our aircraft due to an adverse perception of the Airbus A320 family aircraft or CFM International or Pratt & Whitney engines, whether because of safety concerns or other problems, real or perceived, or in the event of an accident involving such aircraft or engines.
Our business could also be materially adversely affected if the public avoids flying on our aircraft due to an adverse perception of the Airbus A320 family 36 aircraft or CFM International or Pratt & Whitney engines, whether because of safety concerns or other problems, real or perceived, or in the event of an accident involving such aircraft or engines.
The U.S. government may enact additional significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, significant changes to the taxation of income derived from international operations and an addition of further limitations on the deductibility of business interest. We are currently unable to predict whether such additional changes will occur.
The U.S. government may enact additional significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, significant changes to the taxation of income derived from international operations and an addition of further limitations on the deductibility of business interest. We are unable to predict whether such additional changes will occur.
In February 2020, the United States announced an increase to this tariff from 10% to 15%. These tariffs apply to aircraft that we are already contractually obligated to purchase. In June 2021, the United States and the European Union announced an agreement to suspend the imposition of the foregoing tariffs on commercial aircraft and related parts for five years.
In February 2020, the United States announced an increase to this tariff from 10% to 15%. These tariffs apply to aircraft that we are already contractually obligated to purchase. In June 2021, the United States and the 49 European Union announced an agreement to suspend the imposition of the foregoing tariffs on commercial aircraft and related parts for five years.
Furthermore, we cannot predict what policies we may 23 elect to or be required to implement in the future, or the effect thereof on our business, which could cause us to lose or experience difficulties hiring qualified personnel. If we are unable to hire, train and retain qualified employees, our business could be harmed.
Furthermore, we cannot predict what policies we may elect to or be required to implement in the future, or the effect thereof on our business, which could cause us to lose or experience difficulties hiring qualified personnel. If we are unable to hire, train and retain qualified employees, our business could be harmed.
Any general reduction in airline passenger traffic could have a material adverse effect on our business, results of operations and financial condition. 32 We face competition from air travel substitutes and technology advancements. In addition to airline competition from legacy network airlines, LCCs and other ULCCs, we also face competition from air travel substitutes.
Any general reduction in airline passenger traffic could have a material adverse effect on our business, results of operations and financial condition. We face competition from air travel substitutes and technology advancements. In addition to airline competition from legacy network airlines, LCCs and other ULCCs, we also face competition from air travel substitutes.
We cannot guarantee that, as a result of the ongoing, or future, supply chain disruptions or 44 staffing shortages, we or our third-party service providers will be able to timely source all of the products and services we require in the course of our business, or that we will be successful in procuring suitable alternatives.
We cannot guarantee that, as a result of the ongoing, or future, supply chain disruptions or staffing shortages, we or our third-party service providers will be able to timely source all of the products and services we require in the course of our business, or that we will be successful in procuring suitable alternatives.
In early October 2019, the World Trade Organization ruled that the United States could impose $7.5 billion in 48 retaliatory tariffs in response to illegal European Union subsidies to Airbus. On October 18, 2019, the United States imposed these tariffs on certain imports from the European Union, including a 10% tariff on new commercial aircraft.
In early October 2019, the World Trade Organization ruled that the United States could impose $7.5 billion in retaliatory tariffs in response to illegal European Union subsidies to Airbus. On October 18, 2019, the United States imposed these tariffs on certain imports from the European Union, including a 10% tariff on new commercial aircraft.
If we fail to establish ourselves in such new markets, our business, results of operations and financial condition could be materially adversely affected. 24 Our growth and the success of our ULCC business model could stimulate competition in our markets through our competitors’ development of their own ULCC strategies or through new market entrants.
If we fail to establish ourselves in such new markets, our business, results of operations and financial condition could be materially adversely affected. Our growth and the success of our ULCC business model could stimulate competition in our markets through our competitors’ development of their own ULCC strategies or through new market entrants.
Shortages in the availability of, or increases in demand for, crude oil in general, other crude oil-based fuel derivatives and aircraft fuel in particular have resulted, and could continue to result, in 25 increased fuel prices and could have a material adverse effect on our business, results of operations and financial condition.
Shortages in the availability of, or increases in demand for, crude oil in general, other crude oil-based fuel derivatives and aircraft fuel in particular have resulted, and could continue to result, in increased fuel prices and could have a material adverse effect on our business, results of operations and financial condition.
In addition, seasonality may cause our quarterly and monthly results to fluctuate since passengers tend to fly more during the summer months and less in the winter months, apart from the holiday season. We cannot assure you that we will find 49 profitable markets in which to operate during the winter season.
In addition, seasonality may cause our quarterly and monthly results to fluctuate since passengers tend to fly more during the summer months and less in the winter months, apart from the holiday season. We cannot assure you that we will find profitable markets in which to operate during the winter season.
In addition, we are subject to an increasing number of reporting 46 obligations in respect of certain cybersecurity incidents. These reporting requirements have been proposed or implemented by a number of regulators in different jurisdictions, may vary in their scope and application, and could contain conflicting requirements.
In addition, we are subject to an increasing number of reporting obligations in respect of certain cybersecurity incidents. These reporting requirements have been proposed or implemented by a number of regulators in different jurisdictions, may vary in their scope and application, and could contain conflicting requirements.
Because of our high utilization, operational disruptions can have a disproportionate impact on our ability to recover from such disruptions. In addition, many airlines re-accommodate their disrupted passengers on other airlines at prearranged rates under flight interruption manifest agreements.
Because of our high utilization, operational 32 disruptions can have a disproportionate impact on our ability to recover from such disruptions. In addition, many airlines re-accommodate their disrupted passengers on other airlines at prearranged rates under flight interruption manifest agreements.
We cannot assure 42 you that we will be able to source external financing for our planned aircraft acquisitions or for other significant capital needs, and if we are unable to source financing on acceptable terms, or unable to source financing at all, our business could be materially adversely affected.
We cannot assure you that we will be able to source external financing for our planned aircraft acquisitions or for other significant capital needs, and if we are unable to source financing on acceptable terms, or unable to source financing at all, our business could be materially adversely affected.
Negotiations with key GDSs and OTAs designed to manage our costs, increase our distribution flexibility and improve functionality could be contentious, could result in diminished or less favorable distribution of our tickets and may not provide the functionality we require to maximize ancillary revenues.
Negotiations with key GDSs, NDCs and OTAs designed to manage our costs, increase our distribution flexibility and improve functionality could be contentious, could result in diminished or less favorable distribution of our tickets and may not provide the functionality we require to maximize ancillary revenues.
If new laws or regulations are adopted that make unbundling of airline products and services impermissible, or more cumbersome or expensive, or if new taxes are imposed on non-fare passenger revenues, our business, results of operations and financial condition could be harmed.
However, if new laws or regulations are adopted that make unbundling of airline products and services impermissible, or more cumbersome or expensive, or if new taxes are imposed on non-fare passenger revenues, our business, results of operations and financial condition could be harmed.
Our reputation or brand image could be adversely impacted by, among other things, any failure to adopt or maintain high ethical, social and environmental sustainability practices for our operations and activities; our impact on the environment; any inability to maintain our position as “America’s Greenest Airline” as measured by fuel efficiency (ASMs per fuel gallon consumed during the year ended December 31, 2024; compared to all other major U.S. carriers) including, for example, if another major U.S. airline experiences more average fuel savings than us based on ASMs per fuel gallon consumed 38 or if consumers perceive us to be less “green” than other airlines based on different factors or metrics or by attributing the sustainability practices of our vendors, suppliers and other third parties to us; public pressure from investors or policy groups to change our policies; customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs; customer perceptions of our use of social media; or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
Our reputation or brand image could be adversely impacted by, among other things, any failure to adopt or maintain high ethical, social and environmental sustainability practices for our operations and activities; our impact on the environment; any inability to maintain our position as “America’s Greenest Airline” as measured by fuel efficiency (ASMs per fuel gallon consumed during the year ended December 31, 2025; compared to all other major U.S. carriers) including, for example, if another major U.S. airline experiences more average fuel savings than us based on ASMs per fuel gallon consumed or if consumers perceive us to be less “green” than other airlines based on different factors or metrics or by attributing the sustainability practices of our vendors, suppliers and other third parties to us; public pressure from investors or policy groups to change our policies; customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs; customer perceptions of our use of social media; or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
Following these initial maintenance holiday periods, the new aircraft we have an obligation to acquire will require more maintenance as they age and our maintenance and repair expenses for each newly purchased aircraft will be incurred at approximately the same intervals.
Following these initial maintenance holiday periods, the new aircraft and engines we have an obligation to acquire will require more maintenance as they age and our maintenance and repair expenses for each newly purchased aircraft will be incurred at approximately the same intervals.
Among other things, the FAA Authorization Renewal increased the authorized funding level for the FAA and 26 required the hiring of additional air traffic controllers, an effort to address staffing and resource shortages and improve the operation of the air traffic control system in the United States.
Among other things, the FAA Authorization Renewal increased the authorized funding level for the FAA and required the hiring of additional air traffic controllers, an effort to address staffing and resource shortages and improve the operation of the air traffic control system in the United States.
If we fail to generate sufficient funds from operations to meet our operating cash requirements or do not obtain another line of credit, other borrowing facility or equity financing, we could default on our operating leases and fixed obligations.
If we fail to generate sufficient funds from operations to meet our operating cash requirements or do not obtain another line of credit, other borrowing facility or equity financing, we could default on our operating leases and 42 fixed obligations.
In general, any changes in airport operations could have a material adverse effect on our business, results of operations and financial condition. Any damage to our reputation or brand image could adversely affect our business or financial results. Maintaining a good reputation globally is critical to our business.
In general, any changes in airport operations could have a material adverse effect on our business, results of operations and financial condition. 38 Any damage to our reputation or brand image could adversely affect our business or financial results. Maintaining a good reputation globally is critical to our business.
If one or more of these analysts ceases to cover our company or fails to publish reports on us regularly, demand for our stock could decrease, which may cause the trading price of our common stock and the trading volume of our common stock to decline.
If one or more of these analysts ceases to cover our company or fails to publish reports on us 51 regularly, demand for our stock could decrease, which may cause the trading price of our common stock and the trading volume of our common stock to decline.
If one or more of such third parties experience operational failures as a result of significant disruption in global supply chains, staffing shortages, or due to sanctions imposed by the United States and foreign government bodies in response to the war between Russia and Ukraine and the conflict in the Middle East, or claim that they cannot perform due to a force majeure event, it may have a material adverse impact on our business, results of operations and financial condition.
If one or more of such third parties experience operational failures as a result of significant disruption in global supply chains, staffing shortages, cybersecurity attacks or due to sanctions imposed by the United States and foreign government bodies in response to the war between Russia and Ukraine and the conflict in the Middle East, or claim that they cannot perform due to a force majeure event, it may have a material adverse impact on our business, results of operations and financial condition.
We routinely participate with other airlines in fuel consortia and fuel committees at our airports. The related agreements generally include cost-sharing provisions and environmental indemnities that are generally joint and 31 several among the participating airlines.
We routinely participate with other airlines in fuel consortia and fuel committees at our airports. The related agreements generally include cost-sharing provisions and environmental indemnities that are generally joint and several among the participating airlines.
The occurrence of any of these events in markets served by us now 33 or in the future and the resulting instability may have a material adverse effect on our business, results of operations and financial condition.
The occurrence of any of these events in markets served by us now or in the future and the resulting instability may have a material adverse effect on our business, results of operations and financial condition.
We rely on third-party distribution channels, including those provided by or through GDSs, conventional travel agents and OTAs to distribute a portion of our airline tickets and to collect a portion of our ancillary revenues.
We rely on third-party distribution channels, including those provided by or through GDSs and NDCs, conventional travel agents and OTAs to distribute a portion of our airline tickets and to collect a portion of our ancillary revenues.
Such claims could involve discrimination (for example, based 54 on gender, age, race or religious affiliation), sexual harassment, privacy, patent, commercial, product liability, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings.
Such claims could involve discrimination (for example, based on gender, age, race or religious affiliation), sexual harassment, privacy, patent, commercial, product liability, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings.
In addition, up to 49% of our outstanding stock may be owned or controlled, directly or indirectly, by persons or entities who are not U.S. citizens 53 but only if those non-U.S. citizens are from countries that have entered into “open skies” air transport agreements with the United States which allow unrestricted access between the United States and the applicable foreign country and to points beyond the foreign country on flights serving the foreign country.
In addition, up to 49% of our outstanding stock may be owned or controlled, directly or indirectly, by persons or entities who are not U.S. citizens but only if those non-U.S. citizens are from countries that have entered into “open skies” air transport agreements 54 with the United States which allow unrestricted access between the United States and the applicable foreign country and to points beyond the foreign country on flights serving the foreign country.
Moreover, our ability to compete in the markets we serve may be threatened by changes in technology or other factors that may make our existing third-party sales channels impractical, uncompetitive or obsolete.
Moreover, our ability to compete in the markets we serve may be 45 threatened by changes in technology or other factors that may make our existing third-party sales channels impractical, uncompetitive or obsolete.
Our access to new international markets may be limited by the applicable air transport agreements between the United States and 28 foreign governments and our ability to obtain the necessary authority from the United States and foreign governments to fly the international routes.
Our access to new international markets may be limited by the applicable air transport agreements between the United States and foreign governments and our ability to obtain the necessary authority from the United States and foreign governments to fly the international routes.
This exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
This exclusive forum provision will not apply to suits 53 brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
Our business would also be harmed by any circumstances causing a reduction in demand for air transportation in the select markets we operate in, such as adverse changes in local economic conditions, health concerns, adverse weather conditions, negative public perception of those markets, terrorist attacks or significant price or tax increases linked to increases in airport access costs and fees imposed on passengers.
Our business would also be harmed by any circumstances causing a reduction in demand for air transportation in the select markets we operate in, such as adverse changes in government regulations, local economic conditions, health concerns, adverse weather conditions, negative public perception of those markets, terrorist attacks or significant price or tax increases linked to increases in airport access costs and fees imposed on passengers.
For more information on CORSIA, see “Business—Government Regulation—Environmental Regulation”. At this time, the costs of complying with our future obligations under CORSIA are uncertain because there is a significant uncertainty with respect to the future supply and price of carbon offset credits and lower-carbon aircraft fuels.
For more information on CORSIA, see “Business—Government Regulation—Environmental Regulation.” At this time, the costs of complying with our future obligations under CORSIA are uncertain because there is a significant uncertainty with respect to the future supply and price of carbon offset credits and lower-carbon aircraft fuels.
These technologies and systems include our computerized airline reservation system provided by Navitaire, flight operations systems, telecommunications systems, mobile app, airline website, maintenance systems and check-in kiosks. In order for our operations to work efficiently, our website and reservation system must be able to accommodate a high volume of traffic, maintain secure information and deliver flight information.
These IT Systems include our computerized airline reservation system provided by Navitaire, flight operations systems, telecommunications systems, mobile app, airline website, maintenance systems and check-in kiosks. In order for our operations to work efficiently, our website and reservation system must be able to accommodate a high volume of traffic, maintain secure information and deliver flight information.
If such changes are enacted or implemented, we are currently unable to predict the ultimate impact on our business and therefore there can be no assurance that our business will not be adversely affected. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
If such changes are enacted or implemented, we are unable to predict the ultimate impact on our business and there can be no assurance that our business will not be adversely affected. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
A key component of our Low Fares Done Right strategy is attracting customers with low fares and garnering repeat business by delivering a high-quality, family-friendly customer experience with a more upscale look and feel than traditionally experienced on other ULCCs in the United States.
A key component of our strategy is attracting customers with low fares and garnering repeat business by delivering a high-quality, family-friendly customer experience with a more upscale look and feel than traditionally experienced on other ULCCs in the United States.
As we outsource certain critical business activities to third parties and we depend on a limited number of suppliers for our aircraft and engines, we have increased our reliance on the successful implementation and execution of the business continuity planning of such third-party service providers in the current environment.
As we outsource certain critical business activities to third parties and we depend on a limited number of suppliers for our aircraft and engines, we have increased our reliance on the successful implementation and execution of the business continuity planning and cybersecurity controls of such third-party service providers in the current environment.
In the event of a slowdown or shutdown of the federal government, certain functions of these and other federal agencies may be significantly diminished or completely suspended for an indefinite period of time, the conclusion of which is outside of our control.
In the event of a prolonged slowdown or shutdown of the federal government, certain functions of these and other federal agencies may be significantly diminished or completely suspended for an 33 indefinite period of time, the conclusion of which is outside of our control.
If regulatory or legislative efforts to impose restrictions on airline loyalty programs were successful, they could materially reduce the revenues we derive from our FRONTIER Miles loyalty program and adversely impact our results of operations.
If regulatory or legislative efforts to impose restrictions on airline loyalty programs are successful, they could materially reduce the revenues we derive from our FRONTIER Miles loyalty program and adversely impact our results of operations.
Also, in August 2024, the DOT issued a NPRM regarding family seating in air transportation which would require airlines to seat children aged 13 and under next to at least one accompanying adult at no additional cost beyond the fare, subject to limited exceptions. We are still evaluating the impacts of this proposed rule.
Also, in August 2024, the DOT issued a NPRM regarding family seating in air transportation which would require airlines to seat children aged 13 and under next to at least one accompanying adult at no additional cost beyond the fare, subject to limited exceptions. The DOT is still evaluating the impacts of this proposed rule.
In addition, we operate in a highly visible industry that has significant exposure to social media. Negative publicity, including as a result of misconduct by our customers, vendors or employees, can spread rapidly through social media. Should we not respond in a timely and appropriate manner to address negative publicity, our brand and reputation may be significantly harmed.
In addition, we operate in a highly visible industry that has significant exposure to social media. Negative publicity, including as a result of misconduct by our customers, vendors or employees, can spread rapidly through social media. If we do not respond in a timely and appropriate manner to address negative publicity, our brand and reputation may be significantly harmed.
The amount of our aircraft-related fixed obligations and our obligations under other debt arrangements could have a material adverse effect on our business, results of operations and financial condition and could: • require a substantial portion of cash flows from operations be used for operating lease payments, thereby reducing the availability of our cash flows to fund working capital, capital expenditures and other general corporate purposes; • limit our ability to make required PDPs, including those payable to our aircraft and engine manufacturers for our aircraft and spare engines on order; • limit our ability to obtain additional financing to support our expansion plans and for working capital and other purposes on acceptable terms or at all; • make it more difficult for us to pay our other obligations as they become due during adverse general economic and market industry conditions because any related decrease in revenues or increase in costs could cause us to not have sufficient cash flows from operations to make our scheduled payments; • reduce our flexibility in planning for, or reacting to, changes in our business and the airline industry and, consequently, place us at a competitive disadvantage to our competitors with lower fixed payment obligations; and • cause us to lose access to one or more aircraft and forfeit our deposits if we are unable to make our required aircraft lease rental payments and our lessors exercise their remedies under the lease agreement including cross default provisions in certain of our leases.
The amount of our aircraft-related fixed obligations and our obligations under other debt arrangements could have a material adverse effect on our business, results of operations and financial condition and could: • require a substantial portion of cash flows from operations be used for operating lease payments, thereby reducing the availability of our cash flows to fund working capital, capital expenditures and other general corporate purposes; • limit our ability to make required PDPs, including those payable to our aircraft and engine manufacturers for our aircraft and spare engines on order; • limit our ability to obtain additional financing to support our expansion plans and for working capital and other purposes on acceptable terms or at all; • make it more difficult for us to pay our other obligations as they become due during adverse general economic and market industry conditions because any related decrease in revenues or increase in costs could cause us to not have sufficient cash flows from operations to make our scheduled payments; • reduce our flexibility in planning for, or reacting to, changes in our business and the airline industry and, consequently, place us at a competitive disadvantage to our competitors with lower fixed payment obligations; and • cause us to lose access to one or more aircraft and forfeit our deposits if we are unable to make our required aircraft lease rental payments and our lessors exercise their remedies under the lease agreement including cross default provisions in certain of our leases. 44 A failure to pay our operating lease, debt, fixed costs and other obligations or a breach of our contractual obligations could result in various adverse consequences, including the exercise of remedies by our creditors and lessors.
We expect our quarterly results of operations to continue to fluctuate due to a number of factors, including actions by our competitors, price changes in aircraft fuel and the timing and amount of maintenance expenses.
Our quarterly results of operations fluctuate due to a number of factors, including seasonality and other factors. We expect our quarterly results of operations to continue to fluctuate due to a number of factors, including actions by our competitors, price changes in aircraft fuel and the timing and amount of maintenance expenses.
If we are unable to obtain sufficient insurance (including aviation hull and liability insurance, property and business interruption coverage and cybersecurity incident coverage) to cover such liabilities or losses, whether due to insurance market conditions or otherwise, our business, results of operations and financial condition could be materially adversely affected.
If we are unable to obtain sufficient insurance (including, but not limited to: aviation hull and liability insurance, property and business interruption coverage and cybersecurity incident coverage) to cover such liabilities or losses, whether due to insurance market conditions or otherwise, our business, results of operations and financial condition could be materially adversely affected.
Although Indigo Partners and its affiliates, including William Franke, continue to own a substantial percentage of our outstanding common stock following the Share Distribution, Indigo Partners and its affiliates may nonetheless elect to reduce their ownership in our company or reduce their involvement on our board of directors, which could reduce or eliminate the benefits we have historically achieved through our relationship with Indigo Partners, such as management expertise, industry knowledge and volume purchasing.
Although Indigo Partners and its affiliates, including William Franke, the Chair of our Board, continue to own a substantial percentage of our outstanding common stock, Indigo Partners and its affiliates may nonetheless elect to reduce their ownership in our company or reduce their involvement on our board of directors, which could reduce or eliminate the benefits we have historically achieved through our relationship with Indigo Partners, such as management expertise, industry knowledge and volume purchasing.
Draft legislation introduced in the U.S. Congress, referred to as the Protect Your Points Act, similarly aims to regulate the management of frequent flyer programs co-branded credit cards.
Draft legislation introduced in the U.S. Congress, referred to as the Protect Your Points Act, similarly aims to regulate the management of frequent flyer program co-branded credit cards.
Future agreements governing the indebtedness of our subsidiaries, similar to the CARES Act, could impose restrictions on our subsidiaries’ ability to pay dividend distributions or other transfers to us. Each of our subsidiaries is a distinct legal entity, and under certain circumstances legal and contractual restrictions may limit our ability to obtain cash from them.
Future agreements governing the indebtedness of our subsidiaries could impose restrictions on our subsidiaries’ ability to pay dividend distributions or other transfers to us. Each of our subsidiaries is a distinct legal entity, and under certain circumstances legal and contractual restrictions may limit our ability to obtain cash from them.
Our state NOLs may expire, if not utilized, from one year to having no expiration depending on the state the NOL is attributed to, and our foreign NOLs expire in 20 years.
Our state NOLs may expire, if not utilized, from one year to having no expiration depending on the state the NOL is attributed to, and our foreign NOLs expire in 19 years.
The FAA has issued final regulations governing pilot rest periods and work hours for all passenger airlines certificated under Part 121 of the Federal Aviation Regulations (“FAR”).
The FAA has issued final regulations governing pilot rest periods and work hours for all passenger airlines certified under Part 121 of the Federal Aviation Regulations (“FAR”).
Indigo Partners, LLC (“Indigo Partners”) is a private equity fund with significant expertise in the ultra low-cost airline business, and this expertise has been available to us through the persons affiliated with Indigo Partners on our board of directors and through a Professional Services Agreement that was put in place in connection with the 2013 acquisition from Republic Airways Holdings, Inc. and pursuant to which we are charged a fee by Indigo Partners of approximately $375,000 per quarter, plus expenses.
Indigo Partners, LLC (“Indigo Partners”) is a private equity fund with significant expertise in the ULCC business, and this expertise has been available to us through the persons affiliated with Indigo Partners on our board of directors and through a Professional Services Agreement that was put in place in connection with the 2013 acquisition from Republic Airways Holdings, Inc. and pursuant to which we are charged a fee by Indigo Partners of approximately $375,000 per quarter, plus expenses.
We were one of the first airlines to utilize the A320neo family and the LEAP engine, and it could take several years to determine whether the reliability and maintenance costs associated with a new aircraft and engine would have a significant impact on our operations.
We were one of the first airlines to utilize the A320neo family and the LEAP engine, and it could take several years to determine whether the reliability and maintenance costs associated with new aircraft and engines will have a significant impact on our operations.
These distribution channels are more expensive and at present have less functionality in respect of ancillary revenues than those we operate ourselves, such as our website. Certain of these distribution channels also effectively restrict the manner in which we distribute our products.
These distribution channels are more expensive and currently have less functionality in respect of ancillary revenues than those we operate ourselves, such as our website. Certain of these distribution channels also effectively restrict the manner in which we distribute our products.
In particular, if our reservation system fails or experiences interruptions, and we are unable to book seats for a period of time, we could lose a significant amount of revenue as customers book seats on other airlines, and our reputation could be harmed.
Likewise, if our reservation system fails or experiences interruptions, and we are unable to book seats for a period of time, we could lose a significant amount of revenue as customers book seats on other airlines, and our reputation could be harmed.
For example, in 2023, the DOT sent us a request for information to assist in its investigation into whether we cared for our customers as required by law during Winter Storm Elliott, including providing adequate customer service assistance, prompt flight status notifications, and proper and timely refunds. We are fully cooperating with the DOT request.
For example, in 2023, the DOT sent us a request for information to assist in its investigation into whether we cared for our customers as required by law during Winter Storm Elliott, including providing adequate customer service assistance, prompt flight status notifications, and proper and timely refunds.
If this legislation or any similar legislation or regulation were enacted, it could fundamentally alter the profitability of our agreement with our co-branded credit card partner and the benefits we provide to our consumers through our co-branded credit card.
If this legislation or any similar legislation or regulation is enacted, it could fundamentally alter the 27 profitability of our agreement with our co-branded credit card partner and the benefits we provide to our consumers through our co-branded credit card.
Additionally, any material failure by us or our third-party specialists to maintain compliance with the Payment Card Industry security requirements or to rectify a data security issue may result in fines and restrictions on our ability to accept credit and debit cards as a form of payment.
Additionally, any material failure by us or our third-party specialists to maintain compliance with legal requirements, including the Payment Card Industry security requirements or to rectify a data security issue may result in material fines and restrictions such as our ability to accept credit and debit cards as a form of payment.
Unauthorized use, unauthorized incursions or user exploitation of our information technology infrastructure could compromise the personally identifiable information of our passengers, prospective passengers or personnel, and other sensitive information and expose us to liability, damage our reputation and have a material adverse effect on our business, results of operations and financial condition.
Unauthorized use, unauthorized incursions or user exploitation of our IT Systems could compromise the personally identifiable information of our passengers, prospective passengers or personnel, and other sensitive information and expose us to liability, damage our reputation and have a material adverse effect on our business, results of operations and financial condition.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Director of Cybersecurity heads the division and is responsible for aspects of cybersecurity across our infrastructure, which includes cybersecurity architecture and engineering, cybersecurity operations, identity governance and IT governance, risk and compliance. Our Director of Cybersecurity has served in various cybersecurity roles for over 20 years at numerous organizations and consulting firms.
Biggest changeOur CIO holds a Bachelor’s degree from the University of Texas and has served in various IT and cybersecurity roles for over 20 years across numerous organizations, including Chief Operating Officer, Chief Technology Officer, Senior Vice President of Operations and IT director roles. • Our Senior Director of Cybersecurity heads the division and is responsible for aspects of cybersecurity across our infrastructure, which includes cybersecurity architecture and engineering, cybersecurity operations and IT governance risk and compliance.
Our cybersecurity risk management program includes: • risk assessments and rating platforms that are leveraged to help identify material cybersecurity risks to our critical systems, information, services and our broader enterprise information technology environment; • a cybersecurity team principally responsible for managing our cybersecurity risk assessment processes and our response to cybersecurity incidents through monitoring and identification activities; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; 55 • annual cybersecurity awareness training for employees and web and mobile developers, including responsible information security, data security and cybersecurity practices; • a computer incident response team (“CIRT”) that leverage our cybersecurity incident response plan which includes procedures for responding to cybersecurity incidents, escalating notifications and reporting requirements to regulatory bodies; and • a third-party risk management process for service providers, suppliers and vendors.
Our cybersecurity risk management program includes: • risk assessments and rating platforms that are leveraged to help identify cybersecurity risks to our critical systems, information, services and our broader enterprise information technology environment; • a cybersecurity team principally responsible for managing our cybersecurity risk assessment processes and our response to cybersecurity incidents through monitoring and identification activities; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • annual cybersecurity awareness training for employees and web and mobile developers, including responsible information security, data security and cybersecurity practices; • a computer incident response team (“CIRT”) that leverage our cybersecurity incident response plan which includes procedures for responding to cybersecurity incidents, escalating notifications and reporting requirements to regulatory bodies; and • a third-party risk management process for service providers, suppliers and vendors.
We did not identify a material security breach during the year ended December 31, 2024, nor have we identified risks from any known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
We did not identify any material security breaches during the year ended December 31, 2025, nor have we identified risks from any known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy In order to respond to the threat of security breaches and cyberattacks, we have developed and maintain a cybersecurity risk management program that is designed to protect and preserve the confidentiality, integrity and continued availability of our systems and information.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy In order to respond to the threat of security breaches and cyberattacks, we have developed and maintained a cybersecurity risk management program that is designed to protect and preserve the confidentiality, integrity and continued availability of our systems and information. The maturity of our cybersecurity program is assessed annually.
In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
In addition, management updates the Audit Committee, as necessary, regarding any significant cybersecurity incidents.
Cybersecurity Governance Our board of directors is responsible for risk oversight, including cybersecurity risks, which occurs at the board of directors level and through the Audit Committee’s oversight of cybersecurity and other information technology risks. Additionally, we have a Cybersecurity Disclosure Committee (“CDC”), which includes representation from our Information Technology, Legal, Internal Audit and Accounting and Reporting teams.
Additionally, we have a Cybersecurity Disclosure Committee (“CDC”), which includes representation from our Information Technology, Legal, Internal Audit and Accounting and Reporting teams. The CDC assists management with important aspects of compliance with public disclosure rules relating to cybersecurity incidents.
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Our cybersecurity risk management program also includes a cybersecurity incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incidents. The maturity of our cybersecurity program is assessed annually.
Added
We face certain ongoing risks from cybersecurity threats that, if realized, may result in a material impact to our operations, business strategy, results or financial condition.
Removed
The CDC is responsible for assessing the materiality of cybersecurity incidents based on quantitative and qualitative materiality factors, and for providing recommendations on public disclosures of cybersecurity incidents to the Audit Committee if an incident is identified to be possibly material.
Added
See “Risk Factors — Risk Related to Our Business — Unauthorized use, unauthorized incursions or user exploitation of our IT Systems could compromise the personally identifiable information of our passengers, prospective passengers or personnel, and other sensitive information and expose us to liability, damage our reputation and have a material adverse effect on our business, results of operations and financial condition.” 56 Cybersecurity Governance Our board of directors is responsible for risk oversight, including cybersecurity risks, which occurs at the board of directors’ level and through the Audit Committee’s oversight of cybersecurity and other information technology risks.
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Management’s Role Our cybersecurity management team is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for implementing our overall cybersecurity risk management program, including ongoing monitoring, and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants and professional services providers.
Added
Management’s Role Our cybersecurity management team is led by our Senior Vice President & Chief Information Officer (“CIO”) and Senior Director of Cybersecurity, who are primarily responsible for assessing and managing our material risks from cybersecurity threats.
Removed
Prior to the resignation of our Chief Information Officer (“CIO”) in November 2024, the cybersecurity management team was co-led by our CIO and Director of Cybersecurity. Our Director of Cybersecurity currently leads the team and, once we hire a new CIO, we expect that individual will serve as a co-leader.
Added
They lead an operations team that implements and monitors our overall cybersecurity risk management program through various processes and technologies deployed in our environment, and also supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants and professional services providers.
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Our Director of Cybersecurity earned a Bachelor of Business Administration in Management Information Systems (MIS) from Florida International University and a Master of Business Administration (MBA) in Management from Nova Southeastern University and also holds active cybersecurity certifications including the GIAC Certified Incident Handler (GCIH), Certified Information Security Manager (CISM), and Certified Information Systems Security Professional (CISSP). 56
Added
Our CIO and Senior Director of Cybersecurity have extensive cybersecurity experience as noted below: • Our Senior Vice President & CIO leads our information technology department and oversees our cybersecurity division.
Added
Our Senior Director of Cybersecurity has served in various cybersecurity roles for over 20 years at numerous organizations, across many industries. Our Senior Director of Cybersecurity earned a Bachelor of Science in Computer Information Systems from Excelsior University and a Master of Business Administration (MBA) from Colorado State University. 57

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe primarily operate out of Concourse A at Denver International Airport, including the ground-level boarding facility and accompanying gates. We typically use 14 gates within Concourse A, with access to 9 gates at the ground-level boarding facility and common use access to the remaining gates.
Biggest changeWe primarily operate out of Concourse A at Denver International Airport, where our primary base of operation is the ground load facility and accompanying gates. We typically use 14 gates within Concourse A, all of which are preferentially leased at the ground load facility. International arrivals and other overflow departures operate from Common-Use gates on Concourse A.
For these leases, the contractual term is used as the lease term. As of December 31, 2024, the remaining lease terms vary from one month to ten years. At the majority of the U.S. airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually.
For these leases, the contractual term is used as the lease term. As of December 31, 2025, the remaining lease terms vary from one month to thirteen years. At the majority of the U.S. airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually.
We also lease a hangar, consisting of approximately 154,900 square feet, which includes office space and is where we provide certain maintenance on our aircraft. Other airports through which we conduct significant operations include Orlando International Airport (MCO), McCarran International Airport (LAS), Hartsfield-Jackson Atlanta International Airport (ATL) and Philadelphia International Airport (PHL).
We also lease a hangar, consisting of approximately 154,900 square feet, which includes office space and is where we provide certain maintenance on our aircraft. Other airports through which we conduct significant operations include Orlando International Airport (MCO) and Hartsfield-Jackson Atlanta International Airport (ATL).
Because of the variable nature of the rates, these leases are not recorded on our consolidated balance sheets as right-of-use assets and lease liabilities. During the year ended December 31, 2024, 23% of our flights had Denver International Airport as either their origin or destination.
Because of the variable nature of the rates, these leases are not recorded on our consolidated balance sheets as right-of-use assets and lease liabilities. During the year ended December 31, 2025, 21% of our flights had Denver International Airport as either their origin or destination.
PROPERTIES Aircraft As of December 31, 2024, we operated a fleet of 159 aircraft as detailed in the following table: Aircraft Type Seats Average Age (Years) Number of Aircraft Number Owned Number Leased A320ceo 180 or 186 9 8 — 8 A320neo 186 5 82 — 82 A321ceo 230 8 21 — 21 A321neo 240 1 48 — 48 159 — 159 Ground Facilities Our facility leases are primarily for space at approximately 100 airports that are primarily located in the United States.
PROPERTIES Aircraft As of December 31, 2025, we operated a fleet of 176 aircraft as detailed in the following table: Aircraft Type Seats Average Age (Years) Number of Aircraft Number Owned Number Leased A320ceo 180 or 186 10 6 — 6 A320neo 186 6 89 — 89 A321ceo 230 9 21 — 21 A321neo 240 2 60 — 60 176 — 176 Ground Facilities Our facility leases are primarily for space at approximately 100 airports that are primarily located in the United States.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe believe the ultimate outcome of such lawsuits, proceedings and reviews is not reasonably likely, individually or in the aggregate, to have a material adverse effect on our business, results of operations and financial condition. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 57 PART II
Biggest changeWe believe the ultimate outcome of such lawsuits, proceedings and reviews is not reasonably likely, individually or in the aggregate, to have a material adverse effect on our business, results of operations and financial condition. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 58 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed and traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “ULCC.” Holders As of February 14, 2025, there were approximately 17 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed and traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “ULCC.” Holders As of February 13, 2026, there were approximately 14 holders of record of our common stock.
The comparison assumes $100 was invested on April 1, 2021 in each of our common stock and the indices and assumes that all dividends were reinvested. The stock performance shown on the following graph represents historical stock performance and is not necessarily indicative of future stock price performance. 58 Cumulative Total Returns Recent Sales of Unregistered Securities None.
The comparison assumes $100 was invested on April 1, 2021 in each of our common stock and the indices and assumes that all dividends were reinvested. The stock performance shown on the following graph represents historical stock performance and is not necessarily indicative of future stock price performance. 59 Cumulative Total Returns Recent Sales of Unregistered Securities None.
The following graph compares the cumulative total returns during the period from April 1, 2021 (the date our common stock commenced trading on Nasdaq) through December 31, 2024 of our common stock to the NYSE ARCA Airline Index and the Standard & Poor’s 500 Index.
The following graph compares the cumulative total returns during the period from April 1, 2021 (the date our common stock commenced trading on Nasdaq) through December 31, 2025 of our common stock to the NYSE ARCA Airline Index and the Standard & Poor’s 500 Index.
Dividend Policy There were no cash dividend declarations or payments during the year ended December 31, 2024 and we do not expect to pay cash dividends in the foreseeable future.
Dividend Policy There were no cash dividend declarations or payments during the year ended December 31, 2025 and we do not expect to pay cash dividends in the foreseeable future.
Issuer Purchases of Equity Securities We do not have a share repurchase program and no shares were repurchased during the fourth quarter of 2024. ITEM 6. [RESERVED] 59
Issuer Purchases of Equity Securities We do not have a share repurchase program and no shares were repurchased during the fourth quarter of 2025. ITEM 6. [RESERVED] 60

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in capacity was driven by the 16% increase in average aircraft in service during the year ended December 31, 2024, as compared to the year ended December 31, 2023, partially offset by a 9% 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. 64 Operating Expenses Year Ended December 31, Change Cost per ASM Change 2024 2023 2024 2023 Operating expenses ($ in millions): (a) Aircraft fuel $ 1,041 $ 1,130 $ (89) (8) % 2.61 ¢ 2.99 ¢ (13) % Salaries, wages and benefits 954 858 96 11 % 2.39 2.27 5 % Aircraft rent 675 554 121 22 % 1.69 1.47 15 % Station operations 637 516 121 23 % 1.60 1.36 18 % Maintenance, materials and repairs 209 179 30 17 % 0.52 0.47 11 % Sales and marketing 178 164 14 9 % 0.45 0.43 5 % Depreciation and amortization 72 50 22 44 % 0.18 0.13 38 % Transaction and merger-related costs — 1 (1) N/M — — N/M Other operating expenses (49) 140 (189) N/M (0.12) 0.38 N/M Total operating expenses $ 3,717 $ 3,592 $ 125 3 % 9.32 ¢ 9.50 ¢ (2) % Operating statistics: ASMs (millions) 39,871 37,822 2,049 5 % Average stage length (miles) 894 1,007 (113) (11) % Passengers (thousands) 33,296 30,218 3,078 10 % Departures 216,374 188,841 27,533 15 % CASM (excluding fuel) (¢) (b) 6.71 6.51 0.20 3 % Adjusted CASM (excluding fuel) (¢) (b) 6.81 6.50 0.31 5 % Fuel cost per gallon ($) 2.73 3.10 (0.37) (12) % Fuel gallons consumed (thousands) 381,444 364,606 16,838 5 % ________________ N/M = Not meaningful (a) Cost per ASM figures may not recalculate due to rounding.
Biggest changeCapacity, as measured by ASMs, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, remained consistent due to an 11% increase in average aircraft in service, offset by an 11% decrease in average daily aircraft utilization. 65 Operating Expenses Year Ended December 31, Change Cost per ASM Change 2025 2024 2025 2024 Operating expenses ($ in millions): (a) Aircraft fuel $ 929 $ 1,041 $ (112) (11) % 2.33 ¢ 2.61 ¢ (11) % Salaries, wages and benefits 1,016 954 62 6 % 2.56 2.39 7 % Aircraft rent 748 675 73 11 % 1.88 1.69 11 % Station operations 717 637 80 13 % 1.80 1.60 13 % Maintenance, materials and repairs 209 209 — — % 0.53 0.52 2 % Sales and marketing 159 178 (19) (11) % 0.40 0.45 (11) % Depreciation and amortization 91 72 19 26 % 0.23 0.18 28 % Other operating expenses 4 (49) 53 N/M 0.01 (0.12) N/M Total operating expenses $ 3,873 $ 3,717 $ 156 4 % 9.74 ¢ 9.32 ¢ 5 % Operating statistics: ASMs (millions) 39,754 39,871 (117) — % Average stage length (miles) 919 894 25 3 % Passengers (thousands) 33,200 33,296 (96) — % Departures 205,622 216,374 (10,752) (5) % CASM (excluding fuel) (¢) (b) 7.41 6.71 0.70 10 % Adjusted CASM (excluding fuel) (¢) (b) 7.41 6.81 0.60 9 % Fuel cost per gallon ($) 2.47 2.73 (0.26) (10) % Fuel gallons consumed (thousands) 375,527 381,444 (5,917) (2) % ________________ N/M = Not meaningful (a) Cost per ASM figures may not recalculate due to rounding.
Our net income of $85 million was also adjusted by the following non-cash items to arrive at cash used in operating activities: • $294 million in gains recognized on sale-leaseback transactions; partially offset by • $72 million in depreciation and amortization; • $16 million in stock-based compensation expense; • $1 million loss on extinguishment of debt; and • $1 million in amortization of cash flow hedges, net of tax.
Our net income of $85 million was also adjusted by the following non-cash items to arrive at net cash used in operating activities: • $294 million in gains recognized on sale-leaseback transactions; partially offset by • $72 million in depreciation and amortization; • $16 million in stock-based compensation expense; • $1 million loss on extinguishment of debt; and • $1 million in amortization of cash flow hedges, net of tax.
Financing Activities During the year ended December 31, 2024, net cash provided by financing activities was $288 million, primarily driven by: • $476 million in cash proceeds from debt issuances, consisting of $444 million of net borrowings on our Pre-delivery Credit Facilities, $20 million in draws on our Barclays facility and $12 million in new borrowings on our building note; • $264 million in net proceeds received from sale-leaseback transactions; and • $1 million in proceeds from the exercise of stock options; partially offset by • $447 million in cash outflows from principal repayments on debt, which include $431 million in Pre-delivery Credit Facilities payments and $16 million in payments pursuant to our previous building note; and • $6 million cash outflows for payments related to tax withholdings of share-based awards.
During the year ended December 31, 2024, net cash provided by financing activities was $288 million, primarily driven by: • $476 million in cash proceeds from debt issuances, consisting of $444 million of net borrowings on our Pre-delivery Credit Facilities, $20 million in draws on our Barclays facility and $12 million in new borrowings on our building notes; • $264 million in net proceeds received from sale-leaseback transactions; and • $1 million in proceeds from the exercise of stock options; partially offset by • $447 million in cash outflows from principal repayments on debt, which include $431 million in Pre-delivery Credit Facilities payments and $16 million in payments pursuant to our previous building note; and • $6 million cash outflows for payments related to tax withholdings of share-based awards.
In assessing the future potential lease return costs we consider the future anticipated costs and scope of maintenance events (largely driven by projected number of flight hours and cycles estimated to be utilized on the aircraft and engines prior to return), estimated timing of such events including the timing since the last expected major maintenance event, the date the aircraft is due to be returned to the lessor, contractual terms of the lease and maintenance provider agreements, current condition of each aircraft, age of the aircraft at lease expiration, type of engine, projected number of hours and cycles run on the engines at the time of return and the number of projected cycles run on the airframe at the time of return, among other estimates.
In assessing the future potential lease return costs, we consider the future anticipated costs and scope of maintenance events (largely driven by projected number of flight hours and cycles estimated to be utilized on the aircraft and engines prior to return), estimated timing of such events including the timing since the last expected major maintenance event, the date the aircraft is due to be returned to the lessor, contractual terms of the lease and maintenance provider agreements, current condition of each aircraft, number of heavy maintenance events on engines, age of the aircraft at lease expiration, type of engine, projected number of hours and cycles run on the engines at the time of return and the number of projected cycles run on the airframe at the time of return, among other estimates.
We expect that these new aircraft will require less maintenance when they are first placed into service (sometimes called a “maintenance holiday”) because the aircraft will benefit from manufacturer warranties and also will be able to operate for a significant period of time, generally measured in years, before the most expensive scheduled maintenance 62 obligations, known as heavy maintenance, are required.
We expect that these new aircraft will require less maintenance when they are first placed into service (sometimes called a “maintenance holiday”) because the aircraft will benefit from manufacturer warranties and also will be able to operate for a significant period of time, generally measured in years, before the most expensive scheduled maintenance obligations, known as heavy maintenance, are required.
The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.
The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for taxable income.
During the year ended December 31, 2024, as a result of the change in the overall net deferred tax position net income generated, we reduced the valuation allowance by $18 million and maintained a valuation allowance of $19 million against our federal and state NOL related deferred tax assets due to the uncertainty of future income to be generated.
During the year ended December 31, 2024, as a result of the change in the overall net deferred tax position and pre-tax income generated, we reduced the valuation allowance by $18 million and maintained a valuation allowance of $19 million against our federal and state NOL-related deferred tax assets due to the uncertainty of future income to be generated.
In addition, if our competitors engage in fare wars or similar behavior, our financial performance could be adversely impacted. Aircraft Fuel . Fuel expense represents one of the single largest operating expense for most airlines, including ours.
In addition, if our competitors engage in fare wars or similar behavior, our financial performance could be adversely impacted. 62 Aircraft Fuel . Fuel expense represents one of the single largest operating expense for most airlines, including ours.
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.
Some of the limitations applicable to these measures include: adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; EBITDA, and adjusted EBITDA do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements; and other companies in our industry may calculate adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
We consider sources of taxable income from prior period carryback periods, future reversals of existing taxable temporary differences, tax planning strategies and future taxable income when assessing the future utilization of deferred tax assets.
We consider sources of taxable income from prior period carryback 79 periods, future reversals of existing taxable temporary differences, tax planning strategies and future taxable income when assessing the future utilization of deferred tax assets.
(f) 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.
(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.
As of December 31, 2024, we did not have any other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our results of operations, financial condition or cash flows. 76 Commitments and Contractual Obligations As of December 31, 2024, our contractual purchase commitments include future aircraft and spare engine acquisitions.
As of December 31, 2025, we did not have any other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our results of operations, financial condition or cash flows. 76 Commitments and Contractual Obligations As of December 31, 2025, our contractual purchase commitments include future aircraft and spare engine acquisitions.
(c) We reached a legal settlement with a former lessor for breach of contract for a total of $40 million (please refer to “Notes to Consolidated Financial Statements — 12. Commitments and Contingencies” for additional information). $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.
(c) We reached a legal settlement with a former lessor for breach of contract for a total of $40 million (please refer to “Notes to Consolidated Financial Statements — 11. Commitments and Contingencies” for additional information). $38 million of the settlement represents a one-time reimbursement of damages incurred and $2 million relates to the reimbursement of previously recorded legal expenses.
“EPA” means the United States Environmental Protection Agency. “Fare revenue” consists of base fares for air travel, including miles redeemed under our frequent flyer program, unused and expired passenger credits, other redeemed or expired travel credits and revenue derived from charter flights. “Fare revenue per passenger” means fare revenue divided by passengers.
“EPA” means the United States Environmental Protection Agency. “Fare revenue” consists of base fares for air travel, including miles redeemed under our frequent flyer program, unused and expired passenger credits and revenue derived from charter flights. “Fare revenue per passenger” means fare revenue divided by passengers.
Although our operations have not been impacted as of December 31, 2024, this inspection program may have an adverse impact on our operations, particularly when we are required to temporarily take aircraft out of service.
Although our operations have not been impacted as of December 31, 2025, this inspection program may have an adverse impact on our operations, particularly when we are required to temporarily take aircraft out of service.
(b) These metrics are not calculated in accordance with GAAP. For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest”. Aircraft Fuel .
(b) These metrics are not calculated in accordance with GAAP. For the reconciliation to the corresponding GAAP measures of the aforementioned non-GAAP adjusted measures, see “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest.” Aircraft Fuel .
Our discussion and analysis of fiscal year 2024 compared to fiscal year 2023 is included herein. For a discussion of the results of operations for fiscal year 2022 and comparisons between fiscal year 2023 and fiscal year 2022, please refer to “Item 7.
Our discussion and analysis of fiscal year 2025 compared to fiscal year 2024 is included herein. For a discussion of the results of operations for fiscal year 2023 and comparisons between fiscal year 2024 and fiscal year 2023, please refer to “Item 7.
Any changes in the assumptions outlined above related to our co-branded credit card partnership at agreement inception would impact the allocation of consideration received and the resulting timing of when revenues from the each of the specific performance obligation would be recognized.
Any changes in the assumptions outlined above related to our co-branded credit card partnership at agreement inception or material modification would impact the allocation of consideration received and the resulting timing of when revenues from the each of the specific performance obligation would be recognized.
Given that the accounting for the arrangement will follow our heavy maintenance accounting and is dependent on many projected factors such as flight hours, shop visit timing and scope, and the stand-alone value of 79 certain maintenance services, there are significant estimates that impact the accounting of our per-flight-hour maintenance agreements including amounts capitalized, expensed and treated as capitalized maintenance as well as the timing of each.
Given that the accounting for the arrangement will follow our heavy maintenance accounting and is dependent on many projected factors such as flight hours, shop visit timing and scope, and the stand-alone value of certain maintenance services, there are significant estimates that impact the accounting of our per-flight-hour maintenance agreements including amounts capitalized as recoverable pre-paid maintenance, expensed and treated as capitalized maintenance as well as the timing of each.
In 2024 and 2023, we extended the term for certain aircraft operating leases that were slated to expire between 2025 and 2027, and between 2023 and 2024, respectively.
In 2025 and 2024, we extended the term for certain aircraft operating leases that were slated to expire between 2026 and 2027, and between 2025 and 2027, respectively.
For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” “Air traffic liability” means the value of tickets, unearned membership fees and other related fees sold in advance of travel.
For a discussion of such special items and a reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” “Air traffic liability” means the value of tickets, unearned membership fees, customer rights to book future travel, and other related fees sold in advance of travel.
(b) During the years ended December 31, 2024 and 2023, we recorded $5 million and $37 million non-cash valuation allowances, respectively, against our U.S. federal and state NOL deferred tax assets, which largely do not expire, mainly as a result of being in a three-year cumulative pre-tax loss position, which has no impact on cash taxes and is not reflective of our effective tax rate for deductible NOLs generated or actual cash tax obligations created.
(b) During the year ended December 31, 2024, we recorded a $5 million non-cash valuation allowance against our U.S. federal and state NOL deferred tax assets, which largely do not expire, mainly as a result of being in a three-year cumulative pre-tax loss position, which has no impact on cash taxes and is not reflective of our effective tax rate for deductible NOLs generated or actual cash tax obligations created.
See “Notes to Consolidated Financial Statements — 8. Debt”. (b) Represents interest and commitment fees on debt obligations and our undrawn Revolving Loan Facility. (c) Represents gross cash payments related to our operating fixed lease obligations that are not subject to discount as compared to the obligations measured on our consolidated balance sheets.
See “Notes to Consolidated Financial Statements — 7. Debt.” (b) Represents interest and commitment fees on debt obligations and our undrawn Revolving Loan Facility. (c) Represents gross cash payments related to our operating fixed lease obligations that are not subject to discount as compared to the obligations measured on our consolidated balance sheets.
Changes to the assumptions utilized in the estimation of these lease return costs are accounted for on a cumulative catch-up basis. As of December 31, 2024 and 2023, our total leased aircraft return cost liability was $49 million and $26 million, respectively.
Changes to the assumptions utilized in the estimation of these lease return costs are accounted for on a cumulative catch-up basis. As of December 31, 2025 and 2024, our total leased aircraft return cost liability was $19 million and $49 million, respectively.
For the years ended December 31, 2024 and 2023, we 78 recorded a benefit of $14 million and $53 million, respectively, to aircraft rent in our consolidated statement of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes at the original return date.
For the years ended December 31, 2025 and 2024, we recorded a benefit of $27 million and $14 million, respectively, to aircraft rent in our consolidated statement of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes at the original return date.
For the year ended December 31, 2024, holding other factors constant, a 10% change in our estimated frequent flyer breakage rate would have resulted in a change to passenger revenues of approximately $3 million, or less than 1%.
For the year ended December 31, 2025, holding other factors constant, a 10% change in our estimated frequent flyer breakage rate would have resulted in a change to passenger revenues of approximately $4 million, or less than 1%.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 20, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 18, 2025.
Furthermore, we have a valuation allowance related to our $11 million of foreign deferred tax assets.
Furthermore, we maintained a valuation allowance related to our $11 million of foreign deferred tax assets.
We believe that we are well positioned to 61 maintain our low unit operating costs relative to our competitors through on-going strategic initiatives, including continuing our cost optimization efforts and further realizing economies of scale. To the extent that we are unable to maintain our low-cost structure, our ability to compete effectively may be impaired.
We believe that we are well positioned to maintain our low unit operating costs relative to our competitors through on-going strategic initiatives, including continuing our cost optimization efforts, planned increases in aircraft utilization and further realizing economies of scale. To the extent that we are unable to maintain our low-cost structure, our ability to compete effectively may be impaired.
Our Low Fares Done Right strategy is underpinned by our low-cost structure, and has significantly reduced our cost base by optimizing aircraft utilization with disciplined capacity deployment across peak and off peak periods to align capacity with expected travel demand patterns, transitioning to larger and more fuel-efficient aircraft, maximizing seat density, renegotiating the majority of our distribution agreements, realigning and simplifying our network, enhancing our website and mobile app, boosting employee productivity and contracting with leading specialists to provide us with select operating and other services.
Our strategy is underpinned by our low-cost structure, and has significantly reduced our cost base by optimizing aircraft utilization to align capacity with expected travel demand patterns, transitioning to larger and more fuel-efficient aircraft, maximizing seat density, renegotiating the majority of our distribution agreements, realigning and simplifying our network, enhancing our website and mobile app, boosting employee productivity and contracting with leading specialists to provide us with select operating and other services.
As of December 31, 2024, the average age of our aircraft was approximately five years and all of the aircraft in our fleet were financed with operating leases, the last of which is scheduled to expire in 2036. Please refer to “Notes to Consolidated Financial Statements — 9. Operating Leases” for further discussion.
As of December 31, 2025, the average age of our aircraft was approximately five years and all of the aircraft in our fleet were financed with operating leases, the last of which is scheduled to expire in 2037. Please refer to “Notes to Consolidated Financial Statements — 8. Operating Leases” for further discussion.
The following table presents our distribution channel mix: Year Ended December 31, Change Distribution Channel 2024 2023 Our website, mobile app and other direct channels 72 % 72 % — pt Third-party channels 28 % 28 % — pt Depreciation and Amortization .
The following table presents our distribution channel mix: Year Ended December 31, Change Distribution Channel 2025 2024 Our website, mobile app and other direct channels 70 % 72 % (2) pt Third-party channels 30 % 28 % 2 pt Depreciation and Amortization .
The Revolving Loan Facility also permits us to enter into additional indebtedness secured by our loyalty program and brand-related assets, to the extent such indebtedness is pari passu to that of the Revolving Loan Facility. Our primary uses of cash are for working capital, aircraft PDPs, debt repayments and capital expenditures.
The Revolving Loan Facility also permits us to enter into additional indebtedness secured by our loyalty program and brand-related assets, to the extent such indebtedness is pari passu with the Revolving Loan Facility. Our primary uses of cash are for working capital, aircraft PDPs, debt repayments and capital expenditures. Our single largest capital commitment relates to the acquisition of aircraft.
We are currently in negotiations with the ALPA, the AFA-CWA and the IBT regarding the next labor contract. Please refer to “Notes to Consolidated Financial Statements — 12. Commitments and Contingencies” for additional information. Maintenance, Materials and Repairs and Maintenance Reserve Obligations .
We are currently in negotiations with the ALPA, AFA-CWA, and aircraft technicians represented by IBT regarding the next labor contract. Please refer to “Notes to Consolidated Financial Statements — 11. Commitments and Contingencies” for additional information. Maintenance, Materials and Repairs and Maintenance Reserve Obligations .
We had $502 million of total debt, net, of which $261 million was short-term and consisted primarily of amounts outstanding under our Pre-delivery Credit Facilities.
We had $614 million of total debt, net, of which $301 million was short-term and consisted primarily of amounts outstanding under our Pre-delivery Credit Facilities.
Other operating resulted in a net gain of $49 million during the year ended December 31, 2024, compared to an expense of $140 million during the year ended December 31, 2023.
Other operating resulted in an expense of $4 million during the year ended December 31, 2025, compared to a net gain of $49 million during the year ended December 31, 2024.
Miles are accumulated as a result of travel, purchases using the co-branded credit card and purchases from other participating partners. As of December 31, 2024 and 2023, our total frequent flyer liability was $49 million and $45 million, respectively. The contract to sell miles under the co-branded credit card partnership has multiple performance obligations.
Miles are accumulated as a result of travel, purchases using the co-branded credit card, For Less price guarantee, and purchases from other participating partners. As of December 31, 2025 and 2024, our total frequent flyer liability was $60 million and $49 million, respectively. The contract to sell miles under the co-branded credit card partnership has multiple performance obligations.
Investing Activities During the year ended December 31, 2024, net cash used in investing activities totaled $75 million, driven by: • $76 million in cash outflows for capital expenditures; and • $2 million in cash outflows relating to other investing activity; partially offset by • $3 million in net proceeds for PDP activity. 75 During the year ended December 31, 2023, net cash used in investing activities totaled $90 million, driven by: • $51 million in cash outflows for capital expenditures; • $36 million in net outflows for PDP activity; and • $3 million in cash outflows relating to other investing activity.
Investing Activities During the year ended December 31, 2025, net cash used in investing activities totaled $99 million, driven by: • $75 million in cash outflows for capital expenditures; and • $24 million in net expenditures for PDP activity. 75 During the year ended December 31, 2024, net cash used in investing activities totaled $75 million, driven by: • $76 million in cash outflows for capital expenditures; and • $2 million in cash outflows relating to other investing activity; partially offset by • $3 million in net proceeds for PDP activity.
Please refer to “Notes to Consolidated Financial Statements — 15. Income Taxes” for additional information. 70 Comparative Operating Statistics The following table sets forth our operating statistics for the years ended December 31, 2024 and 2023.
Please refer to “Notes to Consolidated Financial Statements — 13. Income Taxes” for additional information. 71 Comparative Operating Statistics The following table sets forth our operating statistics for the years ended December 31, 2025 and 2024.
Depreciation and amortization expense increased by $22 million, or 44%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to an increase in capitalized maintenance depreciation due to our growing fleet. Other Operating .
Depreciation and amortization expense increased by $19 million, or 26%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to an increase in capitalized maintenance depreciation driven by our growing fleet. Other Operating .
These deferred tax assets are comprised of $45 million, $11 million and $11 million related to NOLs available to reduce future federal, state and foreign taxable income, respectively.
These deferred tax assets are comprised of $93 million, $16 million and $15 million related to NOLs available to reduce future federal, state and foreign taxable income, respectively.
We have seven union-represented employee groups comprising approximately 87% of our employees as of December 31, 2024.
We have seven union-represented employee groups comprising approximately 86% of our employees as of December 31, 2025.
As of December 31, 2024, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $478 million, had $329 million outstanding. As of December 31, 2024, we had $404 million of PDPs held by Airbus, which have been partially financed by our Pre-delivery Credit Facilities.
As of December 31, 2025, our Pre-delivery Credit Facilities, which allow us to draw up to an aggregate of $391 million, had $348 million outstanding. As of December 31, 2025, we had $428 million of PDPs held by Airbus, which have been partially financed by our Pre-delivery Credit Facilities.
The following table presents the major indicators of our financial condition and liquidity as of: December 31, 2024 2023 ($ in millions) Cash and cash equivalents $ 740 $ 609 Total current assets, excluding cash and cash equivalents $ 250 $ 262 Total current liabilities, excluding current maturities of long-term debt and operating leases $ 927 $ 858 Current maturities of long-term debt, net $ 261 $ 251 Long-term debt, net $ 241 $ 219 Stockholders’ equity $ 604 $ 507 Debt to capital ratio 45 % 48 % Debt to capital ratio, including operating lease obligations 88 % 87 % Use of Cash and Future Obligations We expect to meet our cash requirements for the next twelve months through use of our available cash and cash equivalents, our Pre-delivery Credit Facilities, and cash flows from operating activities.
The following table presents the major indicators of our financial condition and liquidity as of: December 31, 2025 2024 ($ in millions) Cash and cash equivalents $ 671 $ 740 Total current assets, excluding cash and cash equivalents $ 287 $ 250 Total current liabilities, excluding current maturities of long-term debt, net and operating leases $ 1,023 $ 927 Current maturities of long-term debt, net $ 301 $ 261 Long-term debt, net $ 313 $ 241 Stockholders’ equity $ 491 $ 604 Debt to capital ratio 56 % 45 % Debt to capital ratio, including operating lease obligations 92 % 88 % Use of Cash and Future Obligations We expect to meet our cash requirements for the next twelve months through use of our available cash and cash equivalents, our Pre-delivery Credit Facilities, and cash flows from operating activities.
Our total debt, net was comprised of $329 million outstanding under our PDP Financing Facility, $100 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.
Our total debt, net was comprised of $348 million outstanding under our PDP Financing Facility, $105 million of 2025-1 EETCs, $101 million outstanding under our pre-purchased miles facility with Barclays Bank Delaware (“Barclays”), and $66 million in 10-year loans (collectively, the “PSP Promissory Notes”) from the U.S.
This amount is a component of interest expense within our consolidated statements of operations. 67 (h) 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.
(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.
Accordingly, you are cautioned not to place undue reliance on this information. 68 Year Ended December 31, 2024 2023 (in millions) Adjusted net income (loss) reconciliation (unaudited): Net income (loss) $ 85 $ (11) Non-GAAP Adjustments (a) : Legal settlement (38) — Transaction and merger-related costs — 1 Other operating costs - legal fees — 1 Write-off of deferred financing costs 1 — Pre-tax impact (37) 2 Tax benefit (expense) related to non-GAAP adjustments — — Valuation allowance (b) 5 37 Net income (loss) impact $ (32) $ 39 Adjusted net income (loss) $ 53 $ 28 Adjusted pre-tax income (loss) reconciliation (unaudited): Income (loss) before income taxes $ 86 $ 32 Pre-tax impact (37) 2 Adjusted pre-tax income (loss) $ 49 $ 34 69 Year Ended December 31, 2024 2023 (in millions) EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR reconciliation (unaudited): Net income (loss) $ 85 $ (11) Plus (minus): Interest expense 36 29 Capitalized interest (32) (28) Interest income and other (32) (36) Income tax expense (benefit) 1 43 Depreciation and amortization 72 50 EBITDA 130 47 Plus: Aircraft rent 675 554 EBITDAR $ 805 $ 601 EBITDA $ 130 $ 47 Plus (minus) (a) : Legal settlement (38) — Transaction and merger-related costs — 1 Other operating costs - legal fees — 1 Adjusted EBITDA 92 49 Plus: Aircraft rent 675 554 Adjusted EBITDAR $ 767 $ 603 __________________ (a) See “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” above for discussion on adjusting items.
Accordingly, you are cautioned not to place undue reliance on this information. 69 Year Ended December 31, 2025 2024 (in millions) Adjusted net income (loss) reconciliation (unaudited): Net income (loss) $ (137) $ 85 Non-GAAP Adjustments (a) : Legal settlement — (38) Write-off of deferred financing costs — 1 Pre-tax impact — (37) Tax benefit (expense) related to non-GAAP adjustments — — Valuation allowance (b) — 5 Net income (loss) impact $ — $ (32) Adjusted net income (loss) $ (137) $ 53 Adjusted pre-tax income (loss) reconciliation (unaudited): Income (loss) before income taxes $ (134) $ 86 Pre-tax impact — (37) Adjusted pre-tax income (loss) $ (134) $ 49 70 Year Ended December 31, 2025 2024 (in millions) EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR reconciliation (unaudited): Net income (loss) $ (137) $ 85 Plus (minus): Interest expense 46 36 Capitalized interest (35) (32) Interest income and other (26) (32) Income tax expense (benefit) 3 1 Depreciation and amortization 91 72 EBITDA (58) 130 Plus: Aircraft rent 748 675 EBITDAR $ 690 $ 805 EBITDA $ (58) $ 130 Plus (minus) (a) : Legal settlement — (38) Adjusted EBITDA (58) 92 Plus: Aircraft rent 748 675 Adjusted EBITDAR $ 690 $ 767 __________________ (a) See “Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest” above for discussion on adjusting items.
The primary difference between the effective tax rate and the federal statutory rate for the year ended December 31, 2024 was related to a decrease in our valuation allowance relating to federal and state net operating losses (“NOLs”). 66 Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest Year Ended December 31, 2024 2023 ($ in millions) Per ASM (¢) ($ in millions) Per ASM (¢) Non-GAAP financial data: (a) CASM 9.32 9.50 Aircraft fuel (1,041) (2.61) (1,130) (2.99) CASM (excluding fuel) (b) 6.71 6.51 Legal settlement (c) 38 0.10 — — Transaction and merger-related costs (d) — — (1) (0.01) Other operating costs - legal fees (e) — — (1) — Adjusted CASM (excluding fuel) (b) 6.81 6.50 Aircraft fuel 1,041 2.61 1,130 2.99 Adjusted CASM (f) 9.42 9.49 Net interest expense (income) (28) (0.07) (35) (0.09) Write-off of deferred financing costs (g) (1) — — — Adjusted CASM + net interest (h) 9.35 9.40 CASM 9.32 9.50 Net interest expense (income) (28) (0.07) (35) (0.10) CASM + net interest (h) 9.25 9.40 __________________ (a) Cost per ASM figures may not recalculate due to rounding.
The primary difference between the effective tax rate and the federal statutory rate for the year ended December 31, 2025 was related to an increase in our valuation allowance relating to federal and state net operating losses (“NOLs”). 67 Reconciliation of CASM to CASM (excluding fuel), Adjusted CASM (excluding fuel), Adjusted CASM, Adjusted CASM including net interest and CASM including net interest Year Ended December 31, 2025 2024 ($ in millions) Per ASM (¢) ($ in millions) Per ASM (¢) Non-GAAP financial data: (a) CASM 9.74 9.32 Aircraft fuel (929) (2.33) (1,041) (2.61) CASM (excluding fuel) (b) 7.41 6.71 Legal settlement (c) — — 38 0.10 Adjusted CASM (excluding fuel) (b) 7.41 6.81 Aircraft fuel 929 2.33 1,041 2.61 Adjusted CASM (d) 9.74 9.42 Net interest expense (income) (15) (0.04) (28) (0.07) Write-off of deferred financing costs (e) — — (1) — Adjusted CASM + net interest (f) 9.70 9.35 CASM 9.74 9.32 Net interest expense (income) (15) (0.04) (28) (0.07) CASM + net interest (f) 9.70 9.25 __________________ (a) Cost per ASM figures may not recalculate due to rounding.
While we have, over recent years, reduced our concentration in Denver to decrease the impact of seasonality in our business, 23% of our flights during the year ended December 31, 2024 had Denver International Airport as either their origin or destination, as compared to 24% of our flights during the year ended December 31, 2023. Labor.
As we increase our routes in other markets, we have reduced our concentration in Denver to decrease the impact of seasonality in our business. During the year ended December 31, 2025, 21% of our flights had Denver International Airport as either their origin or destination, as compared to 23% of our flights during the year ended December 31, 2024. Labor.
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.
Pratt & Whitney. Since 2022, we have introduced aircraft into our fleet that use the Pratt & Whitney PW1100 Geared Turbo Fan (“GTF”) engine, and we have selected this engine for our planned future deliveries. During 2023, Pratt & Whitney announced the requirement, mandated by the U.S.
Aircraft rent expense increased by $121 million, or 22%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to a larger fleet and increased aircraft lease return costs. Station Operations .
Aircraft rent expense increased by $73 million, or 11%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to a larger fleet, partially offset by lower aircraft lease return costs. Station Operations .
There can be no assurance that the projections utilized will not materially change in the future given the inherent difficulty in forecasting future utilization of aircraft over their lease terms; however, the estimates utilized are the best available at the time the financial statements were issued.
There can be no assurance that the projections utilized will not materially change in the future given the inherent difficulty in forecasting future utilization of aircraft over their lease terms, as well as the shop visit timing particularly considering new engine technology we deploy in our fleet; however, the estimates utilized are the best available at the time the financial statements were issued.
Operating Expenses Total operating expenses during the year ended December 31, 2024 increased to $3,717 million, resulting in a cost per available seat mile (“CASM”) of 9.32¢, a decrease of 2% compared to the year ended December 31, 2023. Fuel expense was $89 million lower, as compared to the corresponding prior year period.
Operating Expenses Total operating expenses during the year ended December 31, 2025 increased to $3,873 million, resulting in a cost per available seat mile (“CASM”) of 9.74¢, an increase of 5% compared to the year ended December 31, 2024. Fuel expense was $112 million lower, as compared to the corresponding prior year period.
Our results of operations for any interim period are not necessarily indicative of those for the entire year because the air transportation business and our route network are subject to seasonal fluctuations. We generally expect demand to be greater in the second and third quarters compared to the rest of the year.
Our results of operations for any interim period are not necessarily indicative of those for the entire year because the air transportation business and our route network are subject to seasonal fluctuations. We generally expect demand to be greater in the summer months and less in the winter months, apart from the holiday season.
Our net loss of $11 million was also adjusted by the following non-cash items to arrive at cash used in operating activities: • $147 million in gains recognized on sale-leaseback transactions; partially offset by • $50 million in depreciation and amortization; • $43 million in deferred tax expense primarily due to the recognition of a valuation allowance; • $14 million in stock-based compensation expense; and • $1 million in amortization of cash flow hedges, net of tax.
Our net loss of $137 million was also adjusted by the following non-cash items to arrive at net cash used in operating activities: • $302 million in gains recognized on sale-leaseback transactions; partially offset by • $91 million in depreciation and amortization; • $21 million in stock-based compensation expense; • $3 million in deferred tax expense; and • $1 million in amortization of cash flow hedges, net of tax.
Income Tax Valuation Allowance As of December 31, 2024, our total deferred tax assets, net of a $30 million valuation allowance, were $988 million, which included $67 million of deferred tax assets related to NOL carry forwards.
Income Tax Valuation Allowance As of December 31, 2025, our total deferred tax assets, net of a $65 million valuation allowance, were $1,225 million, which included $124 million of deferred tax assets related to NOL carry forwards.
Our single largest capital commitment relates to the acquisition of aircraft. As of December 31, 2024, we operated all of our 159 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 December 31, 2025, we operated all of our 176 aircraft under operating leases. PDPs relating to future deliveries under our agreement with 73 Airbus are required at various times prior to each aircraft’s delivery date.
Our effective tax rate for the year ended December 31, 2024 was an expense of 1.2%, compared to an expense of 134.4% for the year ended December 31, 2023, on pre-tax income for both periods.
Our effective tax rate for the year ended December 31, 2025 was an expense of 2.2%, compared to an expense of 1.2% for the year ended December 31, 2024, on pre-tax loss and income, respectively.
As of December 31, 2024, we had a firm obligation to purchase 187 A320neo family aircraft and 11 additional spare engines to be delivered by 2031. Of our aircraft commitments, 29 had committed operating leases for deliveries occurring between 2025 and 2026.
As of December 31, 2025, we had a firm obligation to purchase 168 A320neo family aircraft and 21 additional spare engines to be delivered by 2031. Of our aircraft commitments, 20 had committed operating leases for deliveries occurring between 2026 and 2027. We intend to evaluate financing options for the remaining aircraft.
We believe that fare discounts, along with more customer optionality over product offerings, have and will continue to stimulate demand for Frontier due to our Low Fares Done Right strategy.
We believe that fare discounts, along with more customer optionality over product offerings and enhancements to our frequent flyer program, have and will continue to stimulate demand for Frontier.
Year Ended December 31, 2024 2023 Change Operating statistics (unaudited) (a) ASMs (millions) 39,871 37,822 5 % Departures 216,374 188,841 15 % Average stage length (miles) 894 1,007 (11) % Block hours 554,399 523,440 6 % Average aircraft in service 146 126 16 % Aircraft – end of period 159 136 17 % Average daily aircraft utilization (hours) 10.3 11.3 (9) % Passengers (thousands) 33,296 30,218 10 % Average seats per departure 205 199 3 % RPMs (millions) 30,630 30,798 (1) % Load factor 76.8 % 81.4 % (4.6) pts Fare revenue per passenger ($) 43.09 42.26 2 % Non-fare passenger revenue per passenger ($) 67.50 73.85 (9) % Other revenue per passenger ($) 2.79 2.66 5 % Total ancillary revenue passenger ($) 70.29 76.51 (8) % Total revenue per passenger ($) 113.38 118.77 (5) % RASM (¢) 9.47 9.49 — % CASM (¢) 9.32 9.50 (2) % CASM (excluding fuel) (¢) (b) 6.71 6.51 3 % CASM + net interest (¢) (b) 9.25 9.40 (2) % Adjusted CASM (¢) (b) 9.42 9.49 (1) % Adjusted CASM (excluding fuel) (¢) (b) 6.81 6.50 5 % Adjusted CASM (excluding fuel), SLA 1,000 (¢) (b)(c) 6.44 6.52 (1) % Adjusted CASM + net interest (¢) (b) 9.35 9.40 (1) % Adjusted CASM + net interest, SLA 1,000 (¢) (b)(d) 8.84 9.43 (6) % Fuel cost per gallon ($) 2.73 3.10 (12) % Fuel gallons consumed (thousands) 381,444 364,606 5 % Full-time equivalent employees 7,913 7,214 10 % _________________ (a) Figures may not recalculate due to rounding.
Year Ended December 31, 2025 2024 Change Operating statistics (unaudited) (a) Available Seat Miles (“ASMs”) (millions) 39,754 39,871 — % Departures 205,622 216,374 (5) % Average stage length (miles) 919 894 3 % Block hours 541,304 554,399 (2) % Average aircraft in service 162 146 11 % Aircraft – end of period 176 159 11 % Average daily aircraft utilization (hours) 9.2 10.3 (11) % Passengers (thousands) 33,200 33,296 — % Average seats per departure 209 205 2 % RPMs (millions) 31,187 30,630 2 % Load factor 78.4 % 76.8 % 1.6 pts Fare revenue per passenger ($) 44.60 43.09 4 % Non-fare passenger revenue per passenger ($) 63.79 67.50 (5) % Other revenue per passenger ($) 3.78 2.79 35 % Total ancillary revenue passenger ($) 67.57 70.29 (4) % Total revenue per passenger ($) 112.17 113.38 (1) % Total revenue per available seat mile (“RASM”) (¢) 9.37 9.47 (1) % RASM, stage-length adjusted to 1,000 miles (¢) (c) 8.98 8.95 — % Cost per available seat mile (“CASM”) (¢) 9.74 9.32 5 % CASM (excluding fuel) (¢) (b) 7.41 6.71 10 % CASM + net interest (¢) (b) 9.70 9.25 5 % Adjusted CASM (¢) (b) 9.74 9.42 3 % Adjusted CASM (excluding fuel) (¢) (b) 7.41 6.81 9 % Adjusted CASM (excluding fuel), stage-length adjusted to 1,000 (¢) (b)(c) 7.10 6.44 10 % Adjusted CASM + net interest (¢) (b) 9.70 9.35 4 % Adjusted CASM + net interest, stage-length adjusted to 1,000 (¢) (b)(c) 9.30 8.84 5 % Fuel cost per gallon ($) 2.47 2.73 (10) % Fuel gallons consumed (thousands) 375,527 381,444 (2) % Full-time equivalent employees 7,656 7,913 (3) % _________________ (a) Figures may not recalculate due to rounding.
As of December 31, 2024, we had capitalized $209 million of rate per hour payments which are probable to be recovered via future shop visits. Recent Accounting Pronouncements See “Notes to Consolidated Financial Statements — 1.
As of December 31, 2025, we had capitalized $275 million of rate per hour payments considered pre-paid maintenance, included within other assets on our consolidated balance sheets, which are probable to be recovered via future shop visits. Recent Accounting Pronouncements See “Notes to Consolidated Financial Statements — 1.
Aircraft fuel expense decreased by $89 million, or 8%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023. The decrease was primarily due to a 12% decrease in fuel cost per gallon, partially offset by the 5% increase in gallons consumed, driven by higher capacity. Salaries, Wages and Benefits .
Aircraft fuel expense decreased by $112 million, or 11%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease was primarily due to a 10% decrease in fuel cost per gallon, as well as a 2% decrease in gallons consumed. Salaries, Wages and Benefits .
See “Notes to Consolidated Financial Statements — 9. Operating Leases”. (d) Represents purchase commitments for aircraft and engines. See “Notes to Consolidated Financial Statements — 12. Commitments and Contingencies”.
See “Notes to Consolidated Financial Statements — 8. Operating Leases.” (d) Represents purchase commitments for aircraft and engines. See “Notes to Consolidated Financial Statements — 11.
Overview The following table provides select financial and operational information for the years ended December 31, 2024 and 2023 (in millions, except percentages): Year Ended December 31, Change 2024 2023 Total operating revenues $ 3,775 $ 3,589 5 % Total operating expenses $ 3,717 $ 3,592 3 % Income (loss) before income taxes $ 86 $ 32 169 % Available seat miles (“ASMs”) 39,871 37,822 5 % Revenues Total operating revenues for the year ended December 31, 2024 totaled $3,775 million, an increase of 5% compared to the year ended December 31, 2023.
Overview The following table provides select financial and operational information for the years ended December 31, 2025 and 2024 (in millions, except percentages): Year Ended December 31, Change 2025 2024 Total operating revenues $ 3,724 $ 3,775 (1) % Total operating expenses $ 3,873 $ 3,717 4 % Income (loss) before income taxes $ (134) $ 86 N/M Available seat miles (“ASMs”) 39,754 39,871 — % Earnings (loss) per share, diluted $ (0.60) $ 0.37 N/M Revenues Total operating revenues for the year ended December 31, 2025 totaled $3,724 million, a decrease of 1% compared to the year ended December 31, 2024.
CASM (excluding fuel), a non-GAAP measure, increased 3% to 6.71¢, on a 5% increase in capacity, for the year ended December 31, 2024, as compared to the corresponding prior year period, due to the aforementioned drivers of increased non-fuel expenses.
CASM (excluding fuel), a non-GAAP measure, increased 10% to 7.41¢, while capacity remained consistent, for the year ended December 31, 2025, as compared to the corresponding prior year period, due to the aforementioned drivers of increased non-fuel expenses.
This movement was primarily driven by the increase in sale-leaseback gains, as a result of 23 aircraft inductions subject to sale-leaseback transactions during the year ended December 31, 2024, compared to 11 aircraft inductions subject to sale-leaseback transactions in the corresponding prior year period, as well as a legal settlement gain of $40 million during the year ended December 31, 2024.
This movement was primarily driven by a legal settlement gain of $40 million during the year ended December 31, 2024, as well as increases to travel, taxes, insurance, and IT costs, partially offset by the increase in sale-leaseback gains compared to the corresponding prior year period. Other Income (Expense).
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.
Federal Aviation Administration, that certain engines be removed for inspection due to a possible condition in the powdered metal used to manufacture certain engine parts.
Except to the extent set forth in the applicable notes to our consolidated financial statements, the table below does not include commitments that are contingent on events or other factors that are uncertain or unknown at this time.
The table below does not include commitments that are contingent on events or other factors that are uncertain or unknown at this time.
After giving effect to the aforementioned non-GAAP operating adjustments and related tax impacts, as well as the $5 million valuation allowance and the write-off of $1 million in unamortized deferred financing costs for the year ended December 31, 2024, and the $37 million valuation allowance in the year ended December 31, 2023, our adjusted net income, a non-GAAP measure, was $53 million and $28 million, respectively, for the years ended December 31, 2024 and 2023.
There were no non-GAAP adjustments for the year ended December 31, 2025. Considering the aforementioned non-GAAP adjustments and the $5 million valuation allowance and the write-off of $1 million in unamortized deferred financing costs for the year ended December 31, 2024, our adjusted net income, a non-GAAP measure, was $53 million for the year ended December 31, 2024.
No warrants have been exercised as of December 31, 2024. 72 We continue to monitor our covenant compliance with various parties, including, but not limited to, our lenders and credit card processors. As of the date of this report, we are in compliance with all of our covenants.
As of December 31, 2025, Warrants to purchase 237,274 shares of FGHI common stock were outstanding and set to expire during 2026. We continue to monitor our covenant compliance with various parties, including, but not limited to, our lenders and credit card processors. As of the date of this report, we are in compliance with all of our covenants.
During the year ended December 31, 2023, net cash used in operating activities totaled $261 million, which was driven by an $11 million net loss, $211 million of outflows from changes in operating assets and liabilities and non-cash adjustments totaling $39 million.
During the year ended December 31, 2024, net cash used in operating activities totaled $82 million, which was driven by non-cash adjustments totaling $204 million, partially offset by $85 million of net income and $37 million of inflows from changes in operating assets and liabilities.
Other Income (Expense). Other income decreased by $7 million, or 20%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023. The decrease was primarily due to lower interest income from lower balances in interest-bearing cash accounts and the increase in interest expense, net of capitalized interest. Income Taxes.
Other income decreased by $13 million, or 46%, during the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease was primarily due to increased interest expense, driven by higher principal balances on our debt and decreased interest income from lower interest-bearing cash accounts, partially offset by greater capitalized interest. Income Taxes.
During the year ended December 31, 2023, net cash provided by financing activities was $199 million, primarily driven by: • $163 million in net proceeds received from sale-leaseback transactions; • $171 million in cash proceeds from debt issuances, consisting of $162 million in draws on our PDP Financing Facility, net of issuance costs, and a $9 million draw on our Barclays facility; and • $1 million in proceeds from the exercise of stock options; partially offset by • $131 million in cash outflows from principal repayments on debt, which include $130 million in PDP Financing Facility payments and $1 million in payments pursuant to our floating rate building note; and • $5 million cash outflows for payments related to tax withholdings of share-based awards.
Financing Activities During the year ended December 31, 2025, net cash provided by financing activities was $555 million, primarily driven by: • $492 million in cash proceeds from debt issuances, net of issuance costs, consisting of $205 million drawn on our Revolving Loan Facility, $181 million of net borrowings on our Pre-delivery Credit Facilities, $105 million of borrowings related to Class A-1 Equipment Certificates and $1 million drawn on our Barclays facility; • $441 million in net proceeds received from sale-leaseback transactions; and • $6 million in proceeds from the exercise of stock options; partially offset by • $380 million in cash outflows from principal repayments on debt, which include $205 million in Revolving Loan Facility payments, $163 million in Pre-delivery Credit Facilities payments and $12 million in payments pursuant to our previous building notes; and • $4 million cash outflows for payments related to tax withholdings of share-based awards.
Once these maintenance holidays expire, these aircraft will require more maintenance as they age and our maintenance and repair expenses for each of our aircraft will be incurred at approximately the same intervals. When these more significant maintenance activities occur, this will result in out-of-service periods during which our aircraft are dedicated to maintenance activities and unavailable to generate revenue.
Once these maintenance holidays expire, these aircraft will require more maintenance as they age and our maintenance and repair expenses for each of our aircraft will be incurred at approximately the same intervals.
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.
Department of the Treasury (the “Treasury”), partially offset by $6 million in deferred debt acquisition costs.
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss) and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR Year Ended December 31, 2024 2023 (in millions) Non-GAAP financial data (unaudited): Adjusted pre-tax income (loss) (a) $ 49 $ 34 Adjusted net income (loss) (a) $ 53 $ 28 EBITDA (a) $ 130 $ 47 EBITDAR (b) $ 805 $ 601 Adjusted EBITDA (a) $ 92 $ 49 Adjusted EBITDAR (b) $ 767 $ 603 __________________ (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.
Adjusted CASM including net interest and CASM including net interest are not determined in accordance with GAAP, may not be comparable across all carriers and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. 68 Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss), Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss) and Net Income (Loss) to EBITDA, EBITDAR, Adjusted EBITDA, and Adjusted EBITDAR Year Ended December 31, 2025 2024 (in millions) Non-GAAP financial data (unaudited): Adjusted pre-tax income (loss) (a) $ (134) $ 49 Adjusted net income (loss) (a) $ (137) $ 53 EBITDA (a) $ (58) $ 130 EBITDAR (b) $ 690 $ 805 Adjusted EBITDA (a) $ (58) $ 92 Adjusted EBITDAR (b) $ 690 $ 767 __________________ (a) Adjusted pre-tax income (loss), adjusted net income (loss), EBITDA and adjusted EBITDA are included as supplemental disclosures because we believe they are useful indicators of our operating performance.
Maintenance, materials and repair expense increased by $30 million, or 17%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023. This increase was primarily due to a 16% increase in average aircraft in service, which resulted in higher aircraft repair and maintenance costs, partially offset by lower contract labor. Sales and Marketing .
Maintenance, materials and repair expense remained consistent during the year ended December 31, 2025, as compared to the year ended December 31, 2024. This was primarily due to the 66 11% increase in average aircraft in service, which resulted in higher aircraft repair and materials costs, partially offset by lower engine repair costs from recognition of vendor credits.
This 8% decrease in fuel expense for the year ended December 31, 2024 was primarily driven by the 12% decrease in fuel cost per gallon, partially offset by the 5% increase in fuel gallons consumed, as a result of our 5% capacity increase.
This 11% decrease in fuel expense for the year ended December 31, 2025 was primarily driven by a 10% decrease in fuel cost per gallon, as well as the 2% decrease in fuel gallons consumed.
(g) In September 2024, we reduced the capacity of the PDP Financing Facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs.
(e) In September 2024, we reduced the capacity of the pre-delivery deposit payments (“PDPs”) Financing Facility from $365 million to $135 million. The downsize of the facility resulted in a one-time write-off of $1 million in unamortized deferred financing costs. This amount is a component of interest expense within our consolidated statements of operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur results of operations can vary materially due to changes in the price and availability of aircraft fuel and are also impacted by the number of aircraft in use and the number of flights we operate. Aircraft 82 fuel represented approximately 28% and 31% of total operating expenses for the years ended December 31, 2024 and 2023, respectively.
Biggest changeOur results of operations can vary materially due to changes in the price and availability of aircraft fuel and are also impacted by the number of aircraft in use and the number of flights we operate. Aircraft fuel represented approximately 24% and 28% of total operating expenses for the years ended December 31, 2025 82 and 2024, respectively.
During the year ended December 31, 2024, as applied to our average debt balances, a hypothetical increase of 100 basis points in average annual interest rates on our variable-rate debt would have increased the annual interest expense by $4 million. 83
During the year ended December 31, 2025, as applied to our average debt balances, a hypothetical increase of 100 basis points in average annual interest rates on our variable-rate debt would have increased the annual interest expense by $4 million. 83
Based on our annual fuel consumption over the last 12 months, a hypothetical 10% increase in the average price per gallon of aircraft fuel would have increased aircraft fuel expense by approximately $104 million. Interest Rates .
Based on our annual fuel consumption over the last 12 months, a hypothetical 10% increase in the average price per gallon of aircraft fuel would have increased aircraft fuel expense by approximately $92 million. Interest Rates .
We are subject to market risk associated with changing interest rates, due to Secured Overnight Financing Rate (“SOFR”) based interest rates on our PDP Financing Facility, Second PDP Financing Facility and Revolving Loan Facility, which remains undrawn as of December 31, 2024, as well as Effective Federal Funds Rate (“EFFR”) based interest rates on our affinity card advance purchase of miles with Barclays.
We are subject to market risk associated with changing interest rates, due to Secured Overnight Financing Rate (“SOFR”) based interest rates on our PDP Financing Facility, Second PDP Financing Facility, PSP Promissory Notes and Revolving Loan Facility, which remains undrawn as of December 31, 2025, as well as Effective Federal Funds Rate (“EFFR”) based interest rates on our affinity card advance purchase of miles with Barclays.

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