Frontier Group Holdings, Inc.

Hello, thank you for standing by and welcome to the Frontier Group Holdings, Inc. Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker today, David Erdman, Senior Director, Investor Relations. Please go ahead.

Thank you and good afternoon, everyone. Welcome to our third quarter 2022 earnings call. Today's speakers will be Barry Biffle, President and CEO, Jimmy Dempsey, EVP and CFO, and Daniel Schurz, Senior Vice President, Commercial. Each will deliver brief prepared remarks and then we'll get to your questions. But first, let me quickly review the customary Safe Harbor provisions. During this call, we will be making forward-looking statements which are subject to risks and uncertainties. Actual results may differ materially from those predicted in these forward-looking statements. Additional information concerning risk factors which could cause such differences are outlined in the announcement we published earlier along with reports we file with the SEC. We will also discuss non-GAAP financial measures which are reconciled to the nearest comparable GAAP measure in the appendix of the earnings announcement. In addition, Comments about relative operating statistics exclude pandemic affected quarters during 2020. Lastly, if you didn't already notice the announcement in the earnings release, we will be hosting an Investor Day the morning of November 15th in New York. The event will be live streamed and archived on our website. Preregistration is required for all participants, whether in-person or virtual. However, in-person participants must register at least 24 hours in advance. Registration link is provided on our investor relations webpage at ir.flyfrontier.com. So I'll give the floor to Barry to begin his comments. Barry?

Thanks, David, and good afternoon, everyone. First, I want to thank all of Team Frontier employees for serving our customers in the quarter and doing a great job producing these great results. With a supportive demand environment for affordable travel, record ancillary revenue performance, and improving unit costs, we posted back-to-back quarterly profits and expanded our adjusted pre-tax margin to 5.2%, nearly double the second quarter margin. Total operating revenue was 35% higher over the 2019 quarter, while capacity increased by 8% over the same period, contributing to a 26% increase in revenue per available seat mile. In fact, over the first nine months of the year, we've grown capacity by 12% while increasing total operating revenues by 31% compared to the same period in 2019, demonstrating the strength of our leisure-focused, ultra-low-cost business model. The strong revenue performance was underpinned by the achievement of a record $78 of ancillary revenue per passenger during the quarter, which eclipsed the record set last quarter by $3. Since the third quarter of 2019, we've grown ancillary revenue per passenger a remarkable 38%, and we're confident in achieving our targeted run rate of $85 per passenger by the end of 2023. We'll talk more about how we plan to continue to innovate and optimize our ancillary product offerings at our Investor Day on November 15th. Leisure travel demand remains strong and has undergone a fundamental increase versus customer propensity to travel prior to the pandemic. To gain more insight into emerging trends, we recently polled our customers to understand how they're thinking about future travel plans and their ability to travel. The results of the survey revealed an inclination to fly more frequently than they did pre-pandemic, with over half of the survey respondents indicating that they now have more money and more flexibility to do so. The results of this poll demonstrate resiliency in the leisure segment. We expect the benefits from this resilient demand to be amplified by industry capacity, which continues to lag GDP growth. As we look to capitalize on this consumer sentiment, we expect the benefit from our ability to offer ultra-low fares. These fares are underpinned by our industry-leading position in both ancillary revenue per passenger and unit costs. We operated with the lowest adjusted chasm plus net interest of all U.S.-based carriers in the first half of 2022, and our unit costs improved from the second quarter. We are focused on expanding our cost advantage versus the rest of the industry, supported by increased utilization, relentless cost management, and the significant gauge benefit from the A321neo aircraft. Our first A321neo arrived about a month ago. It's an incredible aircraft with a livery reflecting the new Pratt & Whitney geared turbofran technology, which is helping to deliver a stunning 120 ASMs per gallon, along with significantly lower carbon emissions and engine noise. All are fundamental elements to furthering our standing as America's greenest airline. This is the first of 168 A321neos scheduled to be delivered through 2029, including direct leases, 36 of which are expected by the end of 2023. With 240 seats, this aircraft will provide a transformational shift in our business. We'll be able to fly more passengers, more sustainably, and with lower chasm. We launched our cadet program in the third quarter and have over 1,300 applications to date. We also announced our rotary transition program last week. Coupled with our university aviation programs, these three recruiting platforms will provide the backbone for our pilot recruiting in 2023 and beyond, and we expect the majority of our new pilots will come from these programs within a year. Overall, we are positioned to capitalize on a strong leisure market given we have the lowest break-even fare driven by the highest ancillary revenue per passenger and the lowest cost. With that, I'll now hand the call over to Daniel for a commercial update.