By Sabela Ojea

Frontier Group forecast lower-than-expected quarterly revenue and said it would reduce its capacity in the quarter ahead after demand for domestic flights slumped in March.

The parent company of Frontier Airlines on Thursday said that the weakened travel demand it experienced last month resulted in fare discounting and promotions across the industry.

The warning came a day after Delta Air Lines pulled its guidance for 2025 and said it planned to reduce growth and pare its flight scheduled in the back half of the year as it confronts weak demand. Analysts expected other airlines to follow suit, as travellers pull back on flying in the face of broad economic uncertainty from looming tariffs.

Delta and other carriers entered the year expecting customers to have a strong appetite for leisure and business travel, with Delta predicting 2025 to be its best financial year ever. But the industry has encountered a tougher environment of late.

While consumers pull back on leisure travel, government trips have also plummeted amid the cost-cutting drive in Washington. U.S. trade policies have also dampened cross-border travel from Canada while European governments have updated advisories about America's border travel.

Frontier said that it expects first-quarter revenue to rise just 5% year over year, far less than the 14% growth to $988.2 million expected by analysts. Capacity reductions will mainly take place on less busy days of the week during the second quarter, Frontier said, adding that it will make adjustments as it monitors the demand environment.

All told, the company expects scheduled capacity to be down in the low-single digits.

While Trump's tariff orders have loomed over airline stocks, the sector staged a rally Wednesday after the administration announced 90-day pause to some tariffs levied against most countries except for China.

Frontier shares rose 2% to $3.64 in after-hours trading on Thursday.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

April 10, 2025 17:53 ET (21:53 GMT)

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