Frontier beats quarterly profit estimates, defers jet deliveries
Aug 8 (Reuters) -Frontier Group ULCC.O, the parent of budget carrier Frontier Airlines, beat Wall Street estimates for second-quarter profit on Thursday, and said it will defer taking deliveries of 54 Airbus AIR.PA jets.
Airlines in the U.S. are experiencing a summer travel boom and expect to ferry 271 million passengers during the season, a 6.3% increase over last year, according to Airlines for America, a group representing major carriers.
However, carriers have increased seats in the domestic market in excess of demand, pressuring airfares at the price-sensitive end of the market.
Frontier's profit beat was facilitated by tighter cost initiatives which included simplifying its network. It also benefited from its sale and leaseback deals in the quarter.
The carrier said on Thursday it was deferring deliveries of 54 Airbus jets to between 2029 to 2031. Frontier previously expected to get the deliveries for the jets from 2025 to 2028.
Airlines operating certain Airbus A320neo jets have also been impacted by troubles with Pratt & Whitney's Geared Turbofan (GTF) engines, which have forced them to take a number of its aircraft out of service.
Last month JetBlue JBLU.O also said that it would defer deliveries of 44 Airbus airplanes to 2030 and beyond as part of its efforts to drive up earnings.
On an adjusted basis, Frontier earned 14 cents per share in the second quarter ended June 30, compared with analyst estimates of 12 cents per share, according to LSEG data.
Its cost per available seat mile came in at 8.98 cents, down 6% from the previous year.
Reporting by Shivansh Tiwary and Nathan Gomes in Bengaluru; Editing by Shailesh Kuber
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