The adjusted loss guidance reflects underlying expectations regarding tax expenses of $3 to $5 million and approximately 229 million weighted average shares outstanding on a diluted basis, which remain unchanged from prior guidance. Additionally, Frontier expects first quarter 2026 capacity to be down by 1 to 1.5 percent compared to the same period last year, also within the prior guidance range.
Strong travel demand and moderating competitive capacity have contributed to a meaningful increase in unit revenues. The revenue per available seat mile (RASM), adjusted to a 1,000-mile stage length, is now expected to increase by mid-teens percentage over the corresponding prior year quarter, compared to the previously expected growth of over 10 percent. This positive trend is supported by consistent underlying average stage length and available seat miles (ASM).
As of the date of this filing, the company reports that strong demand and fare trends are continuing into the spring booking period, which is expected to support significant revenue growth compared to the previous year. However, the recent rise in jet fuel prices, now averaging approximately $3.00 per gallon for the first quarter of 2026, is projected to drive an additional $45 to $50 million in fuel expenses.
Despite these challenges, Frontier's fuel efficiency advantage of over 40 percent compared to major U.S. carriers positions the company favorably to mitigate the impact of elevated fuel prices, should they persist. The company also expects total liquidity at the end of March 2026 to exceed $900 million, an increase from $874 million reported at the end of December 2025. The full-year 2026 guidance is currently under review, with an update expected alongside the release of first quarter 2026 results.
