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Frontier Group reports bigger than expected Q3 loss due to soft domestic demand

Frontier Group, the parent company of discount airline Frontier Airlines, announced a larger-than-expected third-quarter loss on Tuesday due to a softening domestic travel market. This caused its shares in early trading to drop 9%.

In April, several major U.S. airlines, including Frontier Airlines, revised their financial projections, citing the uncertainty caused by President Donald Trump's tariffs and cuts to government spending, which prompted consumers to reduce travel plans.

Budget-conscious travelers are still cautious despite the fact that airline executives and analysts claim there is a stabilization in demand.

This year's summer season, which is traditionally the most profitable for the industry, has been underwhelming. The low demand for economy seats forced airlines to cut fares.

LSEG data shows that the carrier's third-quarter adjusted loss will be between 26 and 42 cents per share, compared to analysts' estimates of 11 cents.

The executives are betting on the fact that the capacity reductions this year will improve airfare and pricing power.

Frontier expects that its third quarter capacity will fall between 3% and 5% compared to the same period last year.

Barry Biffle, CEO of Frontier Markets, said that the balance between domestic supply and demand is expected to improve over the next few months.

It reported a loss of 31 cents for each share during the quarter ending in June. This compares to a profit of 14 cents per shares a year ago. Analysts predicted a loss between 27 and 30 cents.

The total revenue dropped 4.5%, to $929.12 million. This was lower than the $946.12 millions expected by Wall Street. Reporting by Shivansh Tiwary from Bengaluru, and Doyinsola Oladipo from New York. Editing by Shilpa Majumdar.

(source: Reuters)