Prepared remarks
Hello everyone. Thank you for joining us and welcome to the Frontier Group Holdings Second Quarter 2026 Earnings Conference Call. I will now hand the conference over to David Erdman, Senior Director of Investor Relations. David, please go ahead.
Thanks and good morning, everyone. Welcome to our second quarter 2026 earnings call. Joining me this morning in speaking order are James Dempsey, President and Chief Executive Officer, Bobby Schroeter, Chief Commercial Officer, and Mark Mitchell, Chief Financial Officer. Each will deliver brief prepared remarks and then we'll open the call for Q&A. Before we begin, however, I will remind you that today's discussion will include forward-looking statements subject to risks and uncertainties, and we will refer to certain non-GAAP financial measures. Reconciliations can be found in the earnings release issued earlier today and on our Investor Relations website. We also will be referencing stage-adjusted unit metrics which are based on a conversion to 1,000 miles. So I'll turn the call over to Jimmy to begin his prepared remarks. Jimmy?
Thanks, David, and good morning, everyone. Our second quarter performance was well ahead of our earlier expectations and marks a meaningful step forward in Frontier's transformation. The progress we've delivered this quarter validates the actions we have taken to strengthen the airline and position the business for sustained profitability. I'm incredibly proud of the focus, urgency and execution across Team Frontier as we continue advancing the plan we announced in February. Adjusted loss per share narrowed to $0.10 compared to our original guidance range of a loss of $0.45 to $0.60 per share, with top-line performance the primary factor. We delivered an all-time company record for quarterly revenue of $1.3 billion, up 38% year-over-year, with RASM up 28%, augmented by strong travel demand, the continued progression of our revenue management initiatives, and a more favorable competitive capacity backdrop. We ended the quarter with liquidity of $1.16 billion, further strengthening our balance sheet and giving us added flexibility as we execute against our transformation priorities. Across the business, the team has been executing with discipline and momentum against the four priorities we set out in February: right-sizing our fleet, strengthening cost discipline, improving operational reliability, and deepening customer loyalty. Beginning with fleet right-sizing, this work is now largely complete and is creating a more efficient, more productive platform for the future. In the second quarter, we returned all 24 aircraft under the AerCap agreement. Moreover, we are in advanced discussions to early terminate leases associated with 13 A320neo aircraft in the coming months and substantially replace that capacity with direct leases for up to 10 newer, more cost-efficient A321neo aircraft by the first quarter of 2027, facilitating slower capacity growth in Q4 of approximately 7%. On cost discipline, we are seeing clear benefits from the actions we have taken to bring productivity back into the airline and remain on track to deliver $200 million of targeted annual run-rate cost savings by 2027. Operational reliability also continued to improve, supported by a system-wide maintenance strategy that is contributing to stronger completion factor and on-time performance. For the first half of the year, Frontier ranked fourth among domestic carriers in completion factor and delivered a controllable completion factor of 99.3%. As demonstrated by today's results, customer loyalty and revenue management are gaining momentum. In late June, we extended and improved our Barclays co-brand credit card partnership. In addition, I'm pleased we recently announced the fleet-wide rollout of Starlink high-speed Wi-Fi. We expect it to launch in early 2027. The introduction of Wi-Fi in conjunction with first-class seating significantly enhances our onboard experience and it reinforces our overarching commitment to delivering meaningful value to customers while maintaining industry-leading fares. In conclusion, we are focused on strengthening the fundamentals of our business and segmenting our revenue base to meet customer expectations. We have real momentum and I'm confident in the path ahead for Frontier. As noted in our guidance update, we anticipate returning the airline to profitability in the second half of the year. With that, I'll turn the call over to Bobby to walk through the commercial updates.
Thanks, Jimmy. RASM came in at $0.1152, 28% higher year-over-year. The vast majority of the increase is a reflection of more disciplined revenue management alongside an improved overall supply-demand backdrop, which is further enhanced by Spirit's exit from overlapping markets. These factors are allowing us to substantially mitigate higher fuel prices. Total revenue per passenger rose 20% to approximately $131 on flown load factor of 80.3%, up one point on capacity that was 8% higher. Loyalty continues to be one of our fastest-growing, highest-margin revenue streams and the second quarter reinforced the strength of that platform. For example, the revenue contribution from the Barclays co-brand card increased nearly 30% year-over-year, supported by record co-brand card acquisition activity and continued double-digit growth in cardholder spend through the first half of the year, reflecting customers' recognition of the value we are delivering in the program. Customer loyalty is increasingly tied to what we deliver on board as well. With our upcoming first-class product and the Starlink rollout Jimmy mentioned, we will be delivering a meaningfully better in-flight experience—one that gives the customers who fly us today more reason to come back. And it puts Frontier in play for customers our fares alone haven't reached. That's what converts a one-time booking into a repeat customer and a repeat customer into our cardholder. As we layer in first-class, Starlink Wi-Fi, and additional loyalty enhancements, we are building a more durable, increasingly diversified revenue base while preserving the cost discipline that defines Frontier's model. Domestic capacity in the third quarter is scheduled to be flat year-over-year, while competitive capacity is down over four points. Our third quarter scheduled capacity is expected to increase 2% to 3% sequentially and 17% to 18% year-over-year as we continue to normalize productivity and seize the unique opportunity to backfill lost capacity in the high-value carrier space. Fourth quarter growth, assuming execution of the deals Jimmy mentioned previously, is expected to be approximately 7% year-over-year, more in line with our long-term growth targets. With that, I will now turn the call over to Mark.
Thanks, Bobby. Total adjusted operating expenses in the second quarter were $1.3 billion, or $0.1177 per ASM, including $436 million of fuel expense at an average cost of $4.17 per gallon, approximately $180 million higher compared to forward indications from early February. Total adjusted operating expenses excluding fuel and the early return agreement were $870 million, or $0.0742 per ASM stage-adjusted, reflecting a sequential decline of over 10% on higher aircraft utilization. Second quarter adjusted net loss was $22 million, or $0.10 per share, significantly favorable to our expected guidance range of a $0.45 to $0.60 loss. The beat was driven by stronger-than-expected revenue performance and disciplined cost management. We ended the quarter with total liquidity of $1.16 billion, significantly above our guidance range, representing 27% of trailing 12-month adjusted revenue. The increase during the quarter was supported by stronger sales than expected, the signing bonus received in connection with the Barclays amendment, which was slightly above expectations, and disciplined capital allocation. We ended the quarter with 165 Airbus aircraft, having taken delivery of two A320neos and four A321neos, and returning all 24 A320neos pursuant to the early return agreement. During the third quarter, we expect to take delivery of one additional A320neo and five A321neos from our Airbus order book. As Jimmy mentioned, we are in advanced discussions to early terminate the leases associated with 13 A320neo aircraft and enter into direct leases for up to 10 newer and more cost-efficient A321neo aircraft. Assuming execution of these agreements, we would expect to operate a fleet of no greater than 168 Airbus aircraft by the end of the first quarter of 2027 and remain at that level through the end of 2027. We will provide an update should formal agreements be executed. Turning to guidance, third quarter adjusted diluted EPS is expected to range from a loss of $0.10 per share to a profit of $0.10 per share at an average fuel cost of $3.70 per gallon. Fourth quarter adjusted diluted EPS is expected to range from break-even to a profit of $0.20 per share at an average fuel cost of $3.45 per gallon, which would reflect the third consecutive quarter of earnings improvement. Operator, we're ready to open the line for questions.
Questions and answers
Your first question comes from the line of Savi Syth with Raymond James. Please go ahead.
The kind of question that I had was on the capacity growth. I think Bobby mentioned that maybe this kind of 7% capacity growth level in 4Q is kind of maybe the target level. I was wondering if you can talk a little bit about that. And it looks like you're continuing to favor maybe a higher-gauge aircraft. Just any high-level thoughts on as you think about kind of medium-term growth and how you're thinking about the strategy there?
Hi, Savi. It's Jimmy. We haven't changed what we said earlier this year. We talked about somewhere between 7% and 10% capacity growth on an annualized basis over the medium term. We're obviously going through a significant fleet transition at the moment, so it's quite lumpy in terms of the capacity that we have to fly versus what we want to get to. And you're also lapping quite an unproductive airline a year ago. If you look at capacity growth in Q3, it's elevated compared to where we want it to be. We're taking advantage of an opportunity that we have to return 13 aircraft. I really like the timing of it. We return 13 aircraft in the next couple of months if we execute this deal. Then we largely don't replace the fleet until after the winter. We'll take the fleet down from where it is as you cross through the winter, and it gives us an opportunity to retrofit the first-class seats onto the aircraft through this winter. You'll see our capacity dip from a growth perspective down to roughly 6% to 8% in the fourth quarter; we haven't really settled on the final number and we're working on timing, but it will be in that range, which is a nice change from Q3, which is an 18% capacity growth.
Yes, and just to add on, I know you were talking about the gauge. The growth we're talking about is asset productivity, and there is some gauge conversation in there. We like the A321neo. We think it's the best unit-cost machine in domestic flying. So we're looking at how we switch those out with some of these deals. You're talking about an up-gauge of about 29%, but the unit costs or the cost per departure are significantly less than that. So from a P&L perspective, we think that's a really great move for us.
That's very helpful color. And if I just on the implications of the unit cost side, any kind of thoughts as we think about, like, the next six to 12 months on unit costs and how that might progress?
Yes, Savi. As you look at unit cost, we had good progression from Q1 to Q2. We're still in the midst of the transition, but the substantial completion of the fleet right-sizing puts us in a good place. We're on track with our cost-savings plan. What you saw in Q2 was a 12% sequential improvement, slightly higher year-over-year because of some higher maintenance activity, some transition-related items, and some incremental sales and marketing on higher revenue. As you fast forward into Q3 and Q4, you'll see continued progress where you get a full quarter of the rent savings and labor productivity come through. You're still in a bit of a transition on the ownership cost front, and we're still expecting some higher maintenance activity and certainly incremental sales and marketing. When you put that together, you'll see progress on the plan, but some headwinds that we're working to mitigate in addition to Q3 from a year-over-year basis, lower sale-leaseback gains. As you look beyond Q3, what we're really targeting as a business, because based upon our '27 fleet plan there's little to no sale-leaseback gains in there, is targeting profitability in '27. From a unit-cost perspective, we want our costs to trend favorably when you adjust out the sale-leaseback gains.
In summary, Savi, we're seeing real improvement in productivity in the business. Take out the noise of sale-leaseback gains, and the airline's unit costs are actually improving. We're pretty happy with where we're going.
We will move on to the next question from John Godyn with Citigroup.
I wanted to just follow up on the long-term ASM growth, Savi's first question. Maybe you could just speak about the drivers and the contours of that growth over multiple years in the face of what could be rising profitability. When you think about 7% versus 10%, or even being above 10% at certain times, is that a margin trigger? Is that a return trigger? We may be in a period here where profitability is improving, and people are trying to get a handle on the interplay of your capacity growth decisions with respect to that.
John, if you look across the medium term for the airline, we established earlier this year that we wanted to have a fleet of around 170 aircraft and to keep the fleet steady over a two-year period. That gives the airline an opportunity to mature into its fleet. The airline in 2019 had 95 aircraft at the end of 2019, and it grew quite meaningfully in the next four to five years. Giving the airline an opportunity to mature and improve operational performance is foundational to running a good airline. Establishing a stable fleet over two years is very important to me. That discipline around fleet is something we've invested a huge amount of time in getting right, and we think we're moving into the right place. You then take that fleet and you know you have an order book that runs from 2028 through 2033. We're trying to shape that order book and that will drive growth in the airline after you get the airline back to productivity with flexibility somewhere between 7% and 10%. If you push productivity hard, you can go above 10%, but we need to see if that makes sense. I like the idea of growing the airline in the high single digits to create a more stable revenue backdrop and to give us the ability to mature the airline without operational stress. It will be lumpy—there may be periods through the next five years with slightly higher than 7% or 8% and other periods around 5% or 6%—but high single digits is where I'd like to see the airline in the medium term. Right now, rather than looking beyond 2028, we're focused on getting the airline in a strong condition before it adds aircraft to the fleet.
No, I think that's great. Investors will appreciate a thoughtful, disciplined message there. One more on the play-by-play in markets after the Spirit wind-down. I think I heard you guys talk about four percent capacity—competitive capacity declines in your markets. That number implies some backfill from other players. Could you plug us into the competitive dynamic in the wake of it? Obviously you guys are benefiting considerably and doing a great job, but what's the competitive situation like?
This is the U.S. airline business with four very dominant airlines that supply over 80% of domestic capacity. It's extremely competitive and continues to be so. What has happened is structural change from two things: Spirit started restructuring last November and cut meaningful capacity, and we also changed the way we were managing revenue, moving to a much more disciplined revenue management strategy around the end of Q4 into Q1 of this year. Those two things drove high-teen RASM improvement through Q1 prior to Spirit's liquidation. On our last earnings call, we laid out that Spirit's removal would cause about a 3 to 5 point improvement in RASM; it's probably a little higher than that. That, combined with our ability to mitigate high oil prices, has come from the structural change over the last couple of months. But it's still a very competitive marketplace.
Your next question comes from the line of Atul Maheshwari with UBS.
First question: you'll be lapping some big RASM numbers next year and growth plans are moderate. Given the compares from this year, are you optimistic that you can drive a positive RASM-CASM-ex spread ex the sale-leaseback gains next year? If so, what would be the key drivers of that positive spread?
We're not guiding into next year at this point, but the airline is on a very good path. We've moved the airline back to talking about profitability toward the end of this year. We have big investments going on into the onboard product and operational performance. The introduction of Wi-Fi in early 2027 and the rollout of our first-class seats across this winter should add a significant improvement in product offering and revenue diversification. That's positive. We'll move into next year focused on unit costs. We're not forecasting next year, but the airline is certainly on the right trajectory to return to sustainable profitability, and that's what we're focused on today.
Got it, that's helpful. As my follow-up, average daily aircraft utilization is currently a little under 10 hours a day. Where do you see this metric over the medium term? As you approach that medium-term level versus where you are currently, is there a way to size the CASM-ex tailwind that this might provide?
Our objective is to get the airline to around 11 to 11.5 hours of utilization. You'll have seasonal variation, but moving through Q3 the airline has a utilization rate just over 10 hours. We are behind in getting back to higher utilization given the spike in oil prices; we've effectively trimmed about five or six points in available capacity across the summer months to manage the high oil price environment. We'll continue to be diligent in deploying our fleet. We're building flexibility with the objective to get the airline above 11 hours of utilization over the medium term, and that productivity will enable improved unit cost output.
Your next question comes from the line of Scott Group with Wolfe Research.
If I look back at Q2, you were talking about a 20% plus RASM and it ended up up 28%. This quarter you're saying 20% plus again. Any directional color on where you think we could end up? Historically RASM has picked up from Q2 to Q3; is that achievable again? Any near-term RASM color?
There are a couple of things. We grew the airline at a slower pace in Q2, which contributes to RASM, than we're growing in Q3. The airline has structurally changed its revenue platform, which helps achieve current RASM levels. But we do have growth in Q3 that's lapping a very unproductive airline last year. Sequentially, the growth level is not that dissimilar to seasonal expectations. Given 18% ASM growth year-over-year, a reasonable RASM output is just over 20%, which is what we're seeing.
Makes sense. I want to make sure I understand your point about next year. Lapping the sale-leaseback: is that roughly a four or five point CASM headwind? Is the point you're making that core CASM could be down year-over-year and so reported CASM's up is largely due to the lack of sale-leaseback gains? How should we think about this?
Scott, in '25 you had about $300 million in sale-leaseback gains, which on an ASM basis is probably $0.07 or $0.08 per stage-adjusted ASM. As we look into '27, we expect our costs to trend to be roughly flat excluding that impact.
It's dependent on growth and inflation across the airport world and other parts of the business. A CASM-ex fuel number to work off somewhere in the mid-7s makes a lot of sense to me in the medium term. We're challenging the business to get it lower, but that's a reasonable number to work on.
Your next question comes from the line of Ravi Shanker with Morgan Stanley.
On the current environment, do you feel like there's still room for consumers to accept more jet fuel price pass-throughs at the industry level without seeing demand destruction? What's the current sense on elasticity?
I don't have a crystal ball to predict the future. I think there's been structural change in our revenue base, which is very positive. In our booking engine we see 20% plus RASM improvement into Q3 with slightly slower growth in Q4. The year-over-year comps get harder. We think we've put a good structural change into the business with more disciplined revenue management, and the change in competitive capacity is a big positive for Frontier, enabling us to mitigate high oil at the moment. Volatility in oil price and consumers' willingness to pay are difficult to predict.
I'll add that the demand environment is strong, the fare environment is constructive, and demand is strong not just for fares but for our increasingly diverse revenue base, such as ancillaries. There are many constructive elements in the environment.
Understood, that makes sense. As a quick follow-up, can you give a little more detail around the new credit card agreement and specifically the thinking behind the duration of the agreement? Given changing loyalty dynamics, did you consider a shorter agreement to get more opportunities to re-negotiate?
Barclays is an incredible partner. You've seen results from things we've transformed over the past year or two, and there's more to come in terms of capability to continue making our loyalty program the best place for customers to engage on acquisition and spend. Our thought process on the length: we have a partner that is leaning into this with us and getting us to a place where we think we can grow the overall loyalty pie significantly over the next few years. We got what we wanted out of the deal and partnering with Barclays is the best move we could make for the next decade.
Your next question comes from the line of Michael Linenberg with Deutsche Bank.
Regarding the Barclays pre-purchase mileage facility, you sold $175 million this quarter. How much capacity is left on that facility before you hit the cap?
The facility under the new agreement has a maximum amount of $375 million. At the end of the quarter we were roughly at $120 million outstanding. So you have plenty of runway as we progress through the term of the agreement.
Your next question comes from the line of Jamie Baker with JPMorgan Securities LLC.
The industry seems to have achieved new levels of pricing power and Frontier is part of that. My question is, what lessons learned at Frontier do you think are unique to your passenger demographics? Is it a subset of travelers comfortable paying higher fares, or a broad-based rising tide? Are you seeing travellers modify booking behavior? Understanding the permanence of this would be helpful.
Running a better airline operationally drives attachment from customers into the value we provide from pricing. We are running a better operation this year, which is meaningful. Our completion factor has risen considerably; we were fourth ranked in the industry across the first six months. That's noticed by our customer base. The tools from revenue management improve the output we get and the discipline in the fares we offer. A large portion of Q1's improvement was revenue management—greater discipline around the deployment of bundles and bundle pricing and the ability to do that through NDC and into the OTAs. Pricing bundles competitively and creating attractiveness for the customer has benefited Frontier. Then you have structural change across the industry that enables managing a higher oil price environment. So it's a mix of factors but a large part is our discipline around revenue management.
A quick follow-up: given a similar number of deliveries in the third quarter, is $47 million for sale-leaseback gains a reasonable number to pencil into our models?
Yes, somewhere in that neighborhood—call it $50 million to $60 million.
Your next question comes from the line of Brandon Oglenski with Barclays.
As you look into 2027, you said you expect the airline to be profitable and you want to keep the fleet flat. Is there inherent utilization or capacity increases we should be expecting next year? Is that high single-digit growth rate the right one to pencil in?
We haven't defined our plan for next year yet. We have flexibility to grow the airline by high single digits if the market provides the opportunity. It depends on oil prices. As it stands, we would anticipate growing somewhere between 5% and 8% next year, but we've got to go through a planning cycle. We prefer to get the airline back into a productive state; we're probably about five or six points behind in capacity because of the oil price. You should see some growth into next year in the high single digits and we'll work from there. Lower growth raises unit costs, so we understand the trade-offs and will decide as we approach 2027.
You guys have talked about first class for a while and Starlink is a big announcement. How do you view these initiatives and new products rolling into results?
From a timing perspective, first-class rollout is planned for Q4 going into early next year. Starlink we anticipate starting in early 2027 and rolling through into the summer; it may continue through the year. Regarding revenue, first class was informed by our view on UpFront Plus and the value that brought. The paid load factor on UpFront Plus is now over 80%, which aligns with what you see across the industry for premium products. That showcases demand for premium products from our customer base and gives confidence that first class will be accretive beyond the premium products we have today.
Your next question comes from the line of Daniel McKenzie with Seaport Global.
One housekeeping question for Mark, and then a broader question. How much cash do you expect the additional lease returns to unlock and is it included in the CapEx portion of the release today? Would that filter through cash flow from operations? I'm trying to get at cash that could be produced by the business this year.
Our CapEx guide from last time has not changed. The transactions we've executed and the maintenance savings expected will flow through operating expenses. Given those returns just occurred, our CapEx plan would have incorporated any anticipated CapEx. The right way to look at this is going forward: you're getting a material ownership cost benefit by the early return of these aircraft.
Yes, and then Jimmy, is it too early to talk about a return on invested capital in the medium term that exceeds the cost of capital? Going back to an earlier question on the link between growth and profitability and your North Star, what's behind how you're managing the company given the structural changes that better position Frontier?
We're focused on fundamentals: cost, revenue management, right fleet size, establishing the network to support our fleet, and improving the balance sheet and liquidity. We've invested heavily in fleet discipline. The field we play on changed post-COVID; there are significant loyalty cash flows from credit card programs that fund a large portion of basic economy in the domestic market, and our loyalty program is immature relative to the industry. We see huge opportunity in loyalty, but you must run a good operation to do that. You must invest in operations and enhance product. We're doing all of those things—Wi-Fi, first-class seats, additional segmentation—and our purpose is bringing the airline back to sustainable profitability. We're not giving long-term targets yet; we're managing to bring the airline back to core fundamentals to have a strong platform for growth and discussions around growth versus return on invested capital. That's the objective: to get the airline back to generating operating cash flows and cash flow production over the long term. We've made real progress this year, but we still have a lot to do. We're probably about a year out from an operation we're fully comfortable with. We must establish premium products and allow them to season and get customer awareness. We're excited about the path.
If I can squeeze one final question in, given the reference to premium products and getting those up to maturity, can you share that revenue uplift? What percent of revenues are they today and what would you expect the premium revenue bucket to look like as a percent of total once up to maturity?
We don't have Wi-Fi and first-class seats on board today, so we don't have revenue linked to them now. We'll come back when we launch these and give a sense of the revenue uplift. We don't disclose that at this moment.
UpFront Plus has a paid load factor above 80%, in line with legacy carriers' premium products, showcasing demand. That gives us confidence to roll out first class. We believe there's opportunity not only on revenue but it also helps provide products and services demanded by different segments. Premium seating and Wi-Fi can put Frontier in the consideration set for customers we couldn't reach before. We'll provide more information in the coming months.
Your next question comes from the line of Duane Pfennigwerth with Evercore ISI.
On the fleet, can you confirm that the fleet is basically fixed now through year-end 2027, or are there A321 lease deals that could bring you back to the table if the economics were attractive enough?
There's always openness within Frontier to look at lease deals if the economics make sense. From what we see on the horizon, we think we are nearing the conclusion of some fleet opportunities. Maybe some items to tinker with, but we're largely getting to the point where we like the fleet we have. We like the transition from A320neo to A321neo for flexibility in interior cabin and operating cost benefits. If opportunities arise, we'll evaluate them, but the economics must make sense.
Second question: how do you define competitive capacity and specifically the set of routes? Is it essentially capacity on routes you've served for over a year, or does it consider newer routes you serve for less than a year?
Think of it as a snapshot. We're looking at what the network is compared to competitors within those routes in the markets specifically, and then taking that snapshot versus the previous year if we're looking at it year-over-year. That includes both mature and newer routes.
If you have it, what's the mix of new routes less than a year and how has that been changing and trending over time?
As we pulled the airline down from a fleet perspective, we've added a modest amount of frequency. Immature markets are considerably below historical levels. Historically we may have been running 25% to 35% immature markets; we're in the low teens in maturity at the moment.
Your next question comes from the line of Christopher Stathoulopoulos from Susquehanna International Group.
You mentioned a structural change in the revenue platform: segmentation, loyalty, premium products. There's also structural change in cost. As these initiatives mature, should we expect that on a per-flight or per-hub basis these changes will be ROIC accretive across the system, particularly in markets with larger airlines and different hub economics?
It will be a mix of markets, but the objective is to invest in loyalty and premium products that improve revenue output. A key principle is improving loyalty to create a more stable revenue base. Product segmentation and premiumization have been done successfully by other airlines, and we think that will be accretive to Frontier. We still have a meaningful cost advantage given how we operate and our focus on cost discipline. We're providing incremental value to customers at low fares, and we expect that to be accretive across the network.
If I looked at your top 25 or top 50 routes and ranked them by stage-length adjusted TRASM, as initiatives materialize in '27 and beyond, should we expect meaningful change in margin profile for lower-ranked routes given cost convergence and harmonization?
We believe the product resonates network-wide. UpFront Plus, which blocks the middle seat and the front two rows, has significantly increased revenue for that real estate. Paid load factors are strong and are driving significant increases in revenue for those parts of the aircraft. It's typically network-wide rather than focused on specific routes.
Quick follow-up: as you do a bottoms-up build for FY '27 capacity, any color on net active fleet for next year and decomposition of stage gauge and departures?
We'll have to come back on the net active fleet for next year. There's a lot of work going on modifying the existing fleet and aircraft coming out of service, particularly across Q1 and the back end of this year. It shouldn't be that dissimilar to this year with some flying stripped out to facilitate cabin modification. We'll provide more detail as we finalize plans.
We have reached the end of the Q&A session. I will now turn the call back to Jimmy Dempsey for brief closing remarks.
Thanks, everyone, for attending the call. We're pleased with the direction of the business. We still have work to do to complete the items we laid out earlier in the year. We're excited about the product updates, particularly high-speed Wi-Fi, which is a big change for the airline and complementary to first-class seats. We're focused on providing very low fares with value to our customers. If you have further questions, please reach out to me or the team. We appreciate your support. Thanks very much.
This concludes today's call. Thank you for attending. You may now disconnect.