Frontier Airlines reported record third-quarter revenue of $1.355 billion, up 53% year-over-year, but posted a $104 million net loss. The reported loss masks underlying improvement in the airline's core business. Excluding special charges, principally $134 million in costs tied to returning 13 Airbus A320neos to lessors ahead of schedule, Frontier earned an adjusted profit of $40 million, compared with an adjusted loss of $77 million in the same quarter last year.
Revenue per available seat mile jumped 30% and load factor reached 79%, showing Frontier generated substantially more revenue relative to the capacity it offered, rather than simply operating more flights. Capacity grew 18%.
Fuel costs remain a significant headwind. Frontier spent $425 million on fuel in the quarter, up from $234 million a year earlier. Higher fuel prices added approximately $150 million in expense based on consumption, with average fuel price reaching $3.96 per gallon, 56% higher than the prior year and $0.26 above guidance assumptions. The airline's adjusted profit of $40 million reflects the full impact of elevated fuel costs.
Frontier plans to replace the 13 A320neos with 10 larger A321neos through direct leases, which management believes may improve economics over time. For the fourth quarter, Frontier's adjusted earnings outlook ranges from a loss of $0.15 per share to a profit of $0.05 per share, assuming fuel costs of approximately $4.75 per gallon.