Frontier Group Holdings Inc.: Encouraging signs of improvement, but SLBs and pilot economics remain material overhangs

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Frontier Group Holdings Inc.: Encouraging signs of improvement, but SLBs and pilot economics remain material overhangs

J P M O R G A N North America Equity Research

29 July 2026

Frontier Group Holdings Inc. Underweight

ULCC, ULCC US

Encouraging signs of improvement, but SLBs and pilot Price (29 Jul 26):$6.50

economics remain material overhangs ▲Price Target (Dec-27):$6.00 Prior (Dec-26):$5.00

We are impressed with Frontier’s newfound pricing power in the face of higher fuel

and Spirit’s exit, as well as its continued cost diligence. The equity market appears Airlines

enthused as well, as evidenced by Wednesday’s relative outperformance. But we Jamie Baker AC

remain concerned with Frontier’s continued reliance on sale-leasebacks, as well as (1-212) 622-6713

pilot economics that we do not believe to be sustainable. It’s also not clear whether jamie.baker@jpmorgan.com

Frontier can profitably and permanently muscle its way into a competitive James M Kirby

landscape increasingly oligopolized by brand-loyal airlines, though we’ve long (1-212) 622-8297

james.m.kirby@jpmchase.com

argued there is a place for opportunistic skimmers/spill carriers. Turning to pilots, J.P. Morgan Securities LLC

it’s unclear what degree of wage advantage Frontier can ultimately maintain

relative to competitors, and we can’t offer any clarity as to negotiating momentum.

But in terms of magnitude, we believe Frontier may face a $100 million day of Key Changes (FYE Dec)

reckoning, which could prove challenging for a franchise that hasn’t generated Prev Cur Δ

profitability at the airline level since its IPO. Our newly-introduced 2028 earnings Adj. EPS - 26E ($) (1.28) (0.28) 78.0%

Adj. EPS - 27E ($) 0.04 0.20 384.7%

forecast assumes just such an annual cost pressure, which likely explains why we