May 5 (Reuters) - Frontier Group, the parent of low-cost carrier Frontier, forecast a bigger-than-expected second-quarter loss on Tuesday, as a surge in jet fuel prices erodes margins.
The airline's shares plunged 9% in pre-market trading.
Airlines around the world have cut capacity and raised fees for checked bags and added fuel surcharges to contend with sky-rocketing fuel expenses after Iran's closure of the Strait of Hormuz drastically cut oil supplies.
While most airlines in the U.S. meet their
fuel requirements domestically, they still remain exposed to the higher prices.
Low-cost carriers, unlike their full-service counterparts, have fewer levers to raise ancillary revenue to weather a spike in fuel prices that typically form about a quarter of their operating expense.
U.S. budget airlines have sought $2.5 billion in government aid to address the spike in fuel costs, but Transportation Secretary Sean Duffy said he does not think the government needs to bail them out as they "have access to cash."
Frontier's quarterly results come just days after rival Spirit became the first casualty of the Iran war-driven fuel shock last week, as it failed to secure the government support required to exit its second bankruptcy.
For the second quarter, Frontier expects a loss in the range of 45 cents to 60 cents, the mid-point of which is bigger than analysts' expectation of a 43 cent loss, according to data compiled by LSEG.
The Denver-based airline's adjusted loss per share widened to 30 cents in the three months to March 31 from 19 cents a year earlier.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Maju Samuel)
