Frontier Group Holdings, Inc. (ULCC): Business Model Canvas [Dec-2025 Updated]

You're looking at a carrier making big, calculated moves, and honestly, understanding the mechanics behind Frontier Group Holdings, Inc. (ULCC)'s strategy-especially after their 'New Frontier' pivot-is key to seeing where the near-term risk and reward lie. This isn't just about the lowest base fare anymore; it's a complex machine built on an ultra-lean cost base, evidenced by a Q1 2025 Cost per Available Seat Mile (CASM) ex-fuel of just 7.24¢, aggressively monetized through ancillary fees averaging around $70 per passenger in 2025, and the high-volume, recurring revenue from the GoWild All-You-Can-Fly Annual Pass (promotional price $349). To see exactly how they are balancing their 164 aircraft fleet, new 'First Class' seating options, and significant lease liabilities against those revenue streams, dive into the full Business Model Canvas below.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Key Partnerships

You're looking at the essential external relationships Frontier Group Holdings, Inc. (ULCC) relies on to keep its ultra-low-cost carrier (ULCC) machine running lean. These aren't just vendors; they are structural components of the cost base and growth strategy.

Barclays Bank Delaware for the Co-Branded Credit Card Program

The affinity agreement with Barclays Bank Delaware is key for loyalty revenue, which was a significant contributor. For the third quarter of 2025, loyalty revenue per passenger jumped by more than 40 percent year-over-year to $7.50. The Frontier Airlines World Mastercard carries an annual fee of $79 after the initial year, which is free. Cardmembers earn 5x miles on purchases at flyfrontier.com, 3x on restaurants, and 1x on all other purchases. A specific incentive is the $100 flight voucher earned after spending $2,500 annually. Furthermore, the loyalty program and brand-related assets secure a Revolving Loan Facility providing $205 million in commitments.

Airbus as the Sole-Source Aircraft Manufacturer

Frontier Group Holdings, Inc. maintains a singular focus on Airbus for its fleet, which simplifies maintenance and training. As of June 30, 2025, the fleet stood at 164 Airbus single-aisle aircraft, with 84 percent being the highly fuel-efficient A320neo family. The fleet composition on that date included 55 A321neo and 82 A320neo aircraft. The airline took delivery of three A321neo aircraft during the second quarter of 2025. The company has firm purchase commitments for an additional 180 aircraft to be delivered through 2031, with 153 A321neo aircraft making up the bulk of future committed deliveries. To manage near-term capital needs, Frontier deferred 54 aircraft deliveries originally scheduled between 2025 and 2028.

Aircraft Lessors for Fleet Financing

The entire operating fleet relies on leasing structures. As of June 30, 2025, all 164 Airbus aircraft were financed through operating leases with expiration dates spanning from 2026 and 2037. The total lease liabilities for Frontier Group Holdings, Inc. were reported at $4.3 billion as of the second quarter of 2025. The airline actively uses sale-leaseback transactions to fund deliveries. As of August 5, 2025, the company had secured sale-leaseback financing commitments covering expected deliveries through 2025, and all planned 2026 deliveries through the third quarter of 2026.

Here's a look at the fleet structure and financing reliance as of mid-2025:

Pratt & Whitney and SMBC Aero Engine Lease (SAEL) for Engine Supply and Maintenance

The engine supply chain is heavily concentrated with Pratt & Whitney. In July 2025, Frontier executed a significant agreement to select Pratt & Whitney's PW1100 GTF engines to power 91 Airbus A321neo firm aircraft orders. This deal brings the total commitment to 235 GTF-powered A320neo family aircraft. The agreement also locks in a long-term service contract for engine maintenance and includes 28 spare engine commitments. The first of these newly contracted aircraft is expected to deliver in late 2026. Management has noted potential operational risks related to mandatory GTF engine inspections.

Airport and Ground Handling Service Providers at Non-Hub Airports

Frontier Group Holdings, Inc. operates a network that served approximately 100 airports across the United States and select international destinations as of late 2024. The low-cost model relies on outsourcing non-core functions. The maintenance strategy specifically contracts with third-party specialists for heavy maintenance and engine restoration to manage costs.

Key operational outsourcing elements include:

• Reliance on third-party specialists for heavy maintenance.
• Use of third-party specialists for engine restoration.
• Service network covering approximately 100 airports.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Key Activities

You're looking at the core engine of Frontier Group Holdings, Inc. (ULCC) operations as of late 2025. It's all about driving revenue from non-ticket sources while keeping the cost base tight, even with fleet expansion pressures. Here's the quick math on what they are actively doing.

Aggressive ancillary revenue generation and product unbundling

The unbundling strategy remains central. You pay for the seat, and everything else-bags, seat selection, priority boarding-is a separate transaction. This is how Frontier Group Holdings, Inc. (ULCC) keeps base fares low enough to attract customers in a competitive environment.

The focus is clearly shifting toward higher-margin loyalty revenue, which is less susceptible to immediate fare wars. For instance, loyalty revenue per passenger in the second quarter of 2025 hit $3.00. Management has an ambitious target to double that to $6.00 per passenger by the end of 2026, with a longer-term goal of $10.00 per passenger by the end of 2028.

The overall success of this unbundling is reflected in the total revenue per passenger figures, which remain a key metric for the Ultra-Low-Cost Carrier (ULCC) model.

Maximizing daily aircraft utilization and operational efficiency

Keeping those Airbus frames flying as many hours as possible is non-negotiable for a low-cost operator. However, you can see a recent trend of disciplined capacity deployment, which temporarily impacted utilization rates to manage revenue yields.

The airline still emphasizes its fuel efficiency, a direct result of its modern fleet. In the third quarter of 2025, Frontier Group Holdings, Inc. (ULCC) generated 105 available seat miles (ASMs) per gallon, which is a 2 percent improvement over the corresponding 2024 quarter.

The utilization activity shows a deliberate trade-off in 2025:

• Reduction in average daily aircraft utilization (Q3 2025): 15 percent reduction.
• Reduction in average daily aircraft utilization (Q2 2025): 13 percent reduction.
• Reduction in average daily aircraft utilization (Q1 2025): 8 percent reduction.

Network planning focused on high-demand leisure and VFR routes

Frontier Group Holdings, Inc. (ULCC) continues to build out its route map, prioritizing leisure and Visiting Friends and Relatives (VFR) markets where their low-fare structure has the most impact. This activity is about adding frequency and breadth in key domestic and near-international markets.

The network expansion activity is concrete:

• New routes announced in Q3 2025: 42 new routes.
• New routes launched in Q2 2025: 35 new routes.

The Q3 2025 announcement included service additions in major metros like Atlanta, Chicago, Dallas-Fort Worth, and Houston, plus international debuts in Guatemala, Honduras, Mexico, and Turks and Caicos.

Managing the large order book of new Airbus A320neo family aircraft

Managing the influx of new, fuel-efficient aircraft is a massive activity, especially given the industry-wide engine issues. Frontier Group Holdings, Inc. (ULCC) has actively managed its delivery schedule to align with its growth strategy and financial capacity.

The fleet status as of late 2025 shows a strong commitment to the newer generation:

The order book management involved significant deferrals and cancellations:

• Aircraft deliveries deferred from 2025-2028: 54 aircraft.
• New delivery window for deferred aircraft: Starting 2029.
• A321XLR order: Canceled.
• A320neo orders converted to A321neo: 18 aircraft.
• Expected deliveries in 2025: 21 aircraft.
• Expected deliveries in 2026: 22 aircraft.

Maintaining the Ultra-Low-Cost Carrier (ULCC) cost structure

This activity is about relentless cost control, even when facing external pressures like higher fuel prices. The Cost per Available Seat Mile (CASM) is the key benchmark here. You can see the cost creep in 2025 compared to 2024, which management attributes partly to the utilization discipline mentioned earlier.

Financial figures for the third quarter of 2025 highlight the cost base:

The non-fuel CASM of 7.53 cents in Q3 2025 compares to 6.89 cents in Q3 2024, showing the pressure on non-fuel operating costs.

The airline is also using financing activities to manage cash flow related to fleet growth, such as issuing a $105 million par value note in Q4 secured by spare parts and tooling as of late 2025.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Key Resources

Frontier Group Holdings, Inc. maintains a core set of physical and intellectual assets driving its ultra-low-cost structure.

The fleet is centered on the Airbus A320neo family, which is the largest such fleet among U.S. carriers and contributes to Frontier Group Holdings, Inc. being 'America's Greenest Airline' based on fuel efficiency metrics from the second quarter of 2025.

The proprietary digital booking platform is supported by the overall cost structure, with the third quarter of 2025 Cost per Available Seat Mile (CASM) reported at 9.95 cents.

The subscription and loyalty offerings are designed to lock in future revenue and customer commitment.

The high-density seating configuration is a physical manifestation of the low-cost model, maximizing revenue per flight.

The subscription model pricing has seen variations:

• GoWild! All-You-Can-Fly Annual Pass 2025-2026 pre-sale price: $299.
• GoWild! All-You-Can-Fly Annual Pass 2025-2026 post-pre-sale price: $499.
• GoWild! All-You-Can-Fly Annual Pass 2026-2027 introductory price (November 2025): $349 (regularly $599).
• Airfare paid by passholders: $0.01 per flight, plus taxes and fees.
• FRONTIER Miles standard earning multiplier: 10X ($1 spent equals 10 miles).

Financial context for the period includes:

• Third Quarter 2025 Total Revenue: $886 million.
• Third Quarter 2025 Net Loss: $77 million.
• Third Quarter 2025 Fuel Cost per Gallon: $2.54.
• Total Liquidity: $691 million as of September 30, 2025.
• Total Aircraft on Order (through 2031): 180 additional aircraft.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Value Propositions

Frontier Group Holdings, Inc. (ULCC) centers its value proposition on delivering the lowest possible base fare, which is the foundation of its ultra-low-cost carrier model.

For price-sensitive travelers, the core offering is the base fare, which supports operational efficiency metrics. For instance, in the third quarter of 2025, Frontier Group Holdings achieved a load factor of 81%. The revenue per passenger for that same quarter was reported at $106. The airline emphasizes disciplined capacity deployment to maintain this low-cost structure, evidenced by a stage-adjusted Revenue per Available Seat Mile (RASM) improving to 8.76 cents in Q3 2025, a 2% increase year-over-year.

The unbundled pricing model is the mechanism that allows Frontier Group Holdings to offer those low base fares. You pay only for what you select, which means everything beyond the seat and one personal item is an optional, revenue-generating add-on. This strategy is clearly reflected in the growth of its ancillary revenue streams, a key part of the overall value capture.

Here's a look at the financial performance supporting the unbundling strategy as of late 2025:

This structure means that while the base fare is low, the total spend is highly variable based on customer choices for extras like seat selection, baggage, and priority services. The airline is actively enhancing its loyalty program to drive more high-margin ancillary spend.

Frontier Group Holdings is introducing new premium seating options in late 2025 to capture higher revenue from travelers willing to pay for comfort, moving beyond the purely no-frills proposition. This is a direct response to market trends where customers seek more premium experiences.

• New 'First Class' Seating: Debuting in late 2025, these are described as 'luxurious' and 'spacious' seats located in the first two rows in a two-by-two configuration.
• UpFront Plus Seating: Introduced earlier, this option guarantees an empty middle seat and extra legroom, with upgrades starting at $49.
• Elite Upgrade Path: Members achieving Elite Gold status or higher are eligible for free upgrades to the new First Class seats, subject to availability.

The GoWild All-You-Can-Fly Pass offers a unique subscription value proposition for highly flexible, frequent travelers, essentially selling access to the network for a flat fee plus mandatory charges. The Annual Pass for the 2025-2026 period was promoted at a discounted price of $299, down from the regular $599 renewal cost.

The economics for the pass holder involve paying a nominal airfare of $0.01 per segment, plus government-mandated taxes and fees, which start at $14.90 per segment. This pass is designed to fill seats that would otherwise go unsold, but it comes with significant restrictions that you must factor in for this value to hold true.

The core restrictions defining the GoWild Pass value proposition include:

• Booking Window: Domestic flights can only be secured the day before departure (within 24 hours).
• International Booking: Requires a 10-day advance booking window.
• Exclusions: The pass does not cover baggage, seat selections, or other add-ons, which must be purchased separately.
• Blackout Dates: Travel is restricted on numerous high-demand days, such as July 3-7 and November 25, 26, 29-30 in 2025.
• Status Perks: Pass holders receive Silver Status, which includes benefits like free seat selection and waived flight change fees (for changes made 7+ days out).

Finance: draft 13-week cash view by Friday.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Customer Relationships

Frontier Group Holdings, Inc. (ULCC) structures its customer relationships around a high degree of digital self-service, programmatic rewards for frequent flyers, and a clear transactional boundary for its core, lowest-priced offerings.

Largely automated, low-touch digital self-service via app and website

The airline drives customers toward digital channels for core interactions. Frontier Group Holdings planned to launch a redesigned mobile app for Android, followed by iOS, and redesign its website later in 2025, reinforcing this digital focus. The overall model supports a low-touch interaction, which is critical as the airline manages capacity discipline, such as reducing scheduled capacity in the second quarter of 2025 to maximize liquidity. The load factor improved to 79.3% in the second quarter of 2025, indicating better seat productivity achieved through these managed interactions. Total revenue per passenger in Q2 2025 remained flat at $109 year-over-year. The market for self-service systems, which these tools fall under, was projected to reach approximately $28,400 million by 2025.

Programmatic loyalty through FRONTIER Miles and GoWild Pass

The FRONTIER Miles program is central to driving engagement and ancillary spend, operating on a revenue-based earn structure. The airline offers the highest earn per dollar spent in the industry for non-elite members. Frontier Group Holdings aims to generate $10 in loyalty-related revenue per passenger by 2028. Co-brand loyalty revenue per passenger saw an increase of over 40% year-over-year in the second quarter of 2025. The structure of the program is detailed below:

The airline also aggressively targets competitor loyalty members. For a limited time, members of rival programs could purchase Frontier Elite Gold status for $69, which grants them 14x miles earned per dollar spent.

New enhanced customer support for elite status members and near-flight issues

While the base service is low-touch, premium tiers receive targeted support enhancements. Elite Gold status, whether earned or purchased for $69, includes priority customer care. Elite Gold members and above receive complimentary upgrades to premium seating options, including the new First Class seating debuting in late 2025. Platinum and Diamond Elite members gain access to unlimited free companion travel starting mid-2025. The airline is focused on enhancing the experience for customers seeking more space, with the UpFront Plus seating option achieving over 70% sold load factors within six months of its launch in late 2024.

Transactional focus with minimal post-sale interaction for base fares

The relationship for the lowest-fare customer is highly transactional, with clear financial consequences for changes or failure to travel. Frontier Group Holdings eliminated change fees for Blue, Blue Plus, Blue Extra, and Mint fares, meaning the only cost is the resulting difference in airfare. However, the Blue Basic fare carries specific administrative charges for voluntary cancellation. The cancellation fee for North American routes on a Blue Basic fare is $100 per person, while international segments incur a $200 per person fee. If the original Blue Basic segment price is less than the fee, the entire airfare is forfeited. A failure to notify the airline of a missed flight segment (a no-show) results in the complete forfeiture of the entire monetary worth paid for that segment, and all subsequent unused segments on the booking are automatically canceled. The airline reported a net loss of $70 million in the second quarter of 2025, underscoring the need for disciplined revenue management, even on base fares.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Channels

You're looking at how Frontier Group Holdings, Inc. gets its product-the seat on the plane-into the hands of the customer as of late 2025. The channel strategy is heavily weighted toward direct digital sales, supported by a high-margin loyalty product.

The primary channel remains the direct-to-consumer website, flyfrontier.com, and the mobile application, which is slated for a new launch shortly, with a new website following early next year.

The co-branded Mastercard is a critical channel for both loyalty engagement and direct sales promotion. Spending among holders of the co-branded Frontier World Mastercard saw a 19% year-over-year increase in the second quarter of 2025. This channel directly supports the loyalty revenue goal, which was $3 per passenger in the second quarter of 2025, with an expectation to reach $6 per passenger by the end of 2026, and a long-term target of $10 per passenger by the end of 2028.

While the direct digital channels are prioritized, Frontier is also leaning more heavily into travel management companies and corporate online booking tools with its BizFare offering, a distribution channel where they were historically more limited. Specific volume data for third-party Online Travel Agencies (OTAs) is not broken out, but the focus on direct and corporate tools suggests a strategic move away from high-commission third parties.

Airport ticket counters serve as the final point of sale for last-minute needs and in-person transactions, and this channel is included in the highest tier of the loyalty earning structure.

Here is a look at the key financial and loyalty metrics tied to these channels:

The structure of the co-branded card heavily incentivizes direct engagement:

• Earn up to 15x Miles on eligible purchases at flyfrontier.com.
• Earn 5x Miles on flyfrontier.com purchases.
• Earn 3x Miles on eligible restaurant purchases.
• Earn 1x Miles on all other purchases.
• Cardmembers receive Two Free Checked Bags on Frontier Flights.
• Cardmembers receive priority boarding in Group 4.
• The card offers 0% introductory APR for 15 months on balance transfers made within 45 days of account opening.
• The card has no foreign transaction fees.

For the overall revenue outlook tied to these distribution efforts, Frontier Group Holdings forecasts an annual revenue growth rate of 8.16% for 2025-2027, which is forecast to beat the US Airlines industry average forecast of 3%.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Customer Segments

Frontier Group Holdings, Inc. (ULCC) targets distinct customer groups through its ultra low-cost carrier (ULCC) model, emphasizing low fares done right.

Extreme price-sensitive leisure travelers and vacationers

This segment is the core focus, driven by the airline's low-fare structure across its network, including international leisure destinations in Mexico and the Caribbean.

• Total Operating Revenue for Q3 2025 was $886 million.
• Total Operating Revenue for Q1 2025 was a record $912 million.
• Forecasted annual revenue for 2025 is $3,729,000,000.
• Total Revenue per passenger in Q3 2025 was $106.
• Total Revenue per passenger in Q2 2025 was $109.
• Total Revenue per passenger in Q1 2025 was $116.

Visiting Friends and Relatives (VFR) market on non-stop routes

Frontier Airlines carves out success by targeting VFR passengers, particularly on international routes connecting the U.S. with the Caribbean and Mexico.

• International routes, such as San Juan to Santo Domingo, see strong demand serving both leisure and VFR markets.
• The San Juan to Santo Domingo route operates 79 monthly flights, providing nearly 16,500 seats per month.
• The Punta Cana to San Juan route operates 82 times per month, with over 17,800 available seats.
• The Cancun-Philadelphia route leads in total seat volume with 62 flights per month and over 14,400 available seats.

Budget-conscious small business travelers utilizing the new fare classes

This segment is addressed through the overall low-cost model and potentially through new fare class offerings, though specific data on small business adoption is not explicitly quantified in recent reports.

GoWild Pass subscribers seeking high-frequency, flexible travel

The GoWild! Pass is designed for high-frequency users seeking flexibility, with specific pricing and booking windows defining this segment's value proposition.

• The GoWild! All-You-Can-Fly Summer Pass for May 1 through Sept. 30, 2025, was priced at $399 for a limited time.
• A limited-time early access offer for the 2026-2027 GoWild! Pass was available for $299, normally $599.
• The GoWild! Pass for 2025-2026 was offered at $499, discounted from the typical $699.
• Each GoWild! booking incurs an airfare of $0.01 plus taxes, fees, and charges.
• Domestic flights require confirmed bookings the day before departure.
• International flights can be booked starting 10 days from departure.
• As of March 31, 2025, 82 percent of Frontier Group Holdings, Inc.'s fleet was comprised of the A320neo family aircraft.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Cost Structure

Frontier Group Holdings, Inc. (ULCC) cost structure is heavily geared toward maintaining an ultra-low-cost base, driven by low Cost per Available Seat Mile (CASM) ex-fuel, which was reported at 7.24¢ in Q1 2025.

The major components of the cost structure, based on recent financial reporting periods, are detailed below:

A high proportion of fixed costs are tied up in aircraft financing, evidenced by the approximately $4.3 billion in lease liabilities as of Q2 2025. The entire fleet as of June 30, 2025, was financed through operating leases.

Major variable costs include fuel and airport fees. While fuel expense was $238 million in Q1 2025, the ex-fuel CASM increase in Q2 2025 was driven by higher station costs, which includes airport fees. The average fuel cost in Q1 2025 was $2.55 per gallon, with guidance projecting it down to approximately $2.30 per gallon for the remainder of 2025.

Significant labor costs are a structural consideration, given the status of collective bargaining agreements:

• 87% of the total workforce was union-represented as of June 30, 2025.
• Union contracts for 87% of staff were either open or in mediation as of June 30, 2025, heightening wage-inflation risk.

Frontier Group Holdings, Inc. (ULCC) - Canvas Business Model: Revenue Streams

You're looking at how Frontier Group Holdings, Inc. (ULCC) converts its Ultra-Low-Cost Carrier (ULCC) model into actual dollars, which is heavily dependent on getting you to pay for everything a legacy carrier might include. Here's the quick math on where the money came from in late 2025.

Total operating revenue for Frontier Group Holdings, Inc. in the second quarter of 2025 was reported at exactly $929 million. This figure came in on 2 percent lower capacity compared to the prior year period.

The core of the revenue generation is the separation of the base ticket from everything else. You pay the base fare, and then the ancillary revenue engine kicks in. For the three months ended June 30, 2025, the total revenue from passenger services was $898 million, which is the vast majority of the total operating revenue.

We can break down the components of that passenger revenue from Q2 2025 to see the unbundling in action. Honestly, the base ticket revenue is only one piece of the puzzle.

The focus on ancillary fees is key to the model. For the third quarter of 2025, the total ancillary revenue per passenger was $66.70. This is right in the ballpark of the expected average around $70 per passenger in 2025 that the strategy targets for fees like bags, seats, and bundles.

The GoWild All-You-Can-Fly Annual Pass is a major driver for future cash flow and customer lock-in, even if the per-flight revenue is minimal. The promotional price point for the 2025-2026 pass was set at $349 for early buyers, which is a significant discount from the typical renewal price of $699 mentioned in earlier iterations of the pass.

Revenue from the co-branded credit card program with Barclays also contributes, primarily through increased spending and loyalty engagement. For the second quarter of 2025, the introduction of new benefits, like the free unlimited companion travel for top-tier members, supported a 19 percent increase in cardholder spending over the corresponding 2024 quarter. This shows you the financial lift from that partnership.

Here are the key revenue stream metrics we are tracking:

• Total Operating Revenue (Q2 2025): $929 million
• Ancillary Revenue Per Passenger (Q3 2025): $66.70
• Promotional GoWild! Pass Price (Specified): $349
• Credit Card Spending Growth (YoY Q2 2025): 19 percent

Finance: draft 13-week cash view by Friday.