Key Highlights

● Frontier reported record third-quarter revenue of $1.36 billion.

● Adjusted earnings of 18 cents a share beat a forecast loss.

● Revenue topped analyst estimates of $1.29 billion.

● Higher oil prices remain a cost headwind for airlines.

Frontier Group Holdings (NASDAQ:ULCC) climbed after the parent of Frontier Airlines reported record quarterly revenue and an unexpected profit. Third-quarter revenue reached a record $1.36 billion, ahead of analysts' estimate of $1.29 billion and up sharply from a year earlier.

Adjusted earnings came in at 18 cents a share, compared with expectations for a loss of 6 cents, the kind of surprise that tends to catch investors' attention in an industry where margins are thin.

A Profit Where a Loss Was Expected

Swinging to a profit when Wall Street expected red ink stood out, and the revenue beat gave investors another positive data point, though detailed figures on traffic, fares or costs were not broken out in the reports available.

Frontier Airlines is one of the largest ultra-low-cost carriers in the United States, offering low base fares and charging separately for extras such as seat selection and baggage, a model that relies on keeping costs low and packing planes with passengers.

Fuel Costs in Focus

Frontier's results arrived against a challenging backdrop for airlines. Oil climbed again the same day, with crude settling back above $100 a barrel, after Yemen's Houthis claimed a ballistic-missile attack on a Saudi refinery, a claim Riyadh has not confirmed.

Jet fuel is one of an airline's biggest expenses, so higher crude prices can squeeze profits even for a carrier reporting strong top-line growth.