Frontier Group Holdings (ULCC) risk factors, FY2024 10-K

Risks Related to Our Industry

1. 01If we are unable to attract and retain qualified personnel, including our senior management team or other key employees, at reasonable costs or fail to maintain our company culture, our business, results of operations and financial condition could be harmed
2. 02elect to or be required to implement in the future, or the effect thereof on our business, which could cause us to lose or experience difficulties hiring qualified personnel. If we are unable to hire, train and retain qualified employees, our business could be harmed
3. 03The airline industry is exceedingly competitive, and we compete against legacy network airlines, LCCs and other ULCCs; if we are not able to compete successfully in our markets, our business, results of operations and financial condition may be materially adversely affected
4. 04There has been significant consolidation within the airline industry and, in the future, there may be additional consolidation. Business combinations could significantly alter industry conditions and competition within the airline industry and could enable our competitors to reduce their fares
5. 05increased fuel prices and could have a material adverse effect on our business, results of operations and financial condition
6. 06We are subject to extensive regulation by the FAA, the DOT, the TSA, the CBP and other U.S. and foreign governmental agencies, compliance with which could cause us to incur increased costs and adversely affect our business, results of operations and financial condition
7. 07Restrictions on, or increased taxes applicable to, charges for non-fare products and services paid by airline passengers and burdensome consumer protection regulations or laws could harm our business, results of operations and financial condition
8. 08We are subject to risks associated with climate change, including increased regulation of our CO2 emissions, changing consumer preferences and the potential increased impacts of severe weather events on our operations and infrastructure
9. 09emissions, either due to direct regulation on us, regulation on our suppliers or others in our value chain, or otherwise. Such activity may also impact us indirectly by increasing our operating costs, including fuel costs
10. 10We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations and financial condition
11. 11several among the participating airlines. Any costs (including remediation and spill response costs) incurred by such fuel consortia could also have an adverse impact on our business, results of operations and financial condition
12. 12We face competition from air travel substitutes and technology advancements
13. 13Future public health threats or outbreaks of disease, including pandemics similar to the COVID-19 pandemic, as well as measures to reduce the spread of such disease and the related economic impact, could have a material adverse impact on our business, results of operations and financial conditions
14. 14Threatened or actual terrorist attacks or security concerns, particularly those involving airlines, could have a material adverse effect on our business, results of operations and financial condition
15. 15Risks associated with our presence in international emerging markets, including political or economic instability, and failure to adequately comply with existing legal requirements, may materially adversely affect our business, results of operations and financial condition
16. 16or in the future and the resulting instability may have a material adverse effect on our business, results of operations and financial condition
17. 17Increases in insurance costs or reductions in insurance coverage may have a material adverse effect on our business, results of operations and financial condition
18. 18A decline in, or temporary suspension of, the funding or operations of the U.S. federal government or its agencies may adversely affect our future operating results or negatively impact the timing and implementation of our growth prospects

Risks Related to Our Business

1. 19If we fail to implement our business strategy successfully, our business, results of operations and financial condition could be materially adversely affected
2. 20Our low-cost structure is one of our primary competitive advantages, and many factors could affect our ability to control our costs
3. 21We may not be able to grow or maintain our unit revenues or maintain our non-fare revenues
4. 22We depend on a sole-source supplier for our aircraft and two suppliers for our engines
5. 23We may be subject to competitive risks due to the long-term nature of our fleet and order book which commits us to Airbus aircraft and the engines available for such aircraft for a substantial period of time into the future
6. 24Furthermore, as technological evolution occurs in our industry, we may be competitively disadvantaged because we have extensive existing fleet commitments that would prohibit us from adopting new technologies on an expedited basis
7. 25Increased labor costs, union disputes, employee strikes and other labor-related disruption may adversely affect our business, results of operations and financial condition
8. 26remain competitive or that any new agreements into which we enter will not have terms with higher labor costs or that the negotiations of such labor agreements will not result in any work stoppages
9. 27Our inability to expand or operate reliably or efficiently out of airports where we maintain a large presence could have a material adverse effect on our business, results of operations and financial condition
10. 28Any damage to our reputation or brand image could adversely affect our business or financial results
11. 29Our reputation and business could be adversely affected in the event of an emergency, accident or similar public incident involving our aircraft or personnel
12. 30Negative publicity regarding our customer service could have a material adverse effect on our business, results of operations and financial condition
13. 31We rely on maintaining a high daily aircraft utilization rate to implement our low-cost structure, which makes us especially vulnerable to flight delays, flight cancellations, aircraft unavailability or unplanned reductions in demand
14. 32We are highly dependent upon our cash balances and operating cash flows
15. 33Our ability to obtain financing or access capital markets may be limited
16. 34Our maintenance costs will increase over the near term, we will periodically incur substantial maintenance costs due to the maintenance schedules of our aircraft fleet and obligations to the lessors and we could incur significant maintenance expenses outside of such maintenance schedules in the future
17. 35We have a significant amount of aircraft-related fixed obligations and obligations under other debt arrangements that could impair our liquidity and thereby harm our business, results of operations and financial condition
18. 36We rely on third-party specialists and other commercial partners to perform functions integral to our operations
19. 37staffing shortages, we or our third-party service providers will be able to timely source all of the products and services we require in the course of our business, or that we will be successful in procuring suitable alternatives
20. 38We rely on third-party distribution channels to distribute a portion of our airline tickets
21. 39We rely heavily on technology and automated systems to operate our business, and any failure of these technologies or systems or any failure on our part to implement any new technologies or systems could materially adversely affect our business
22. 40Although we have significantly reconfigured our network since 2013, our business remains dependent on select large markets and increases in competition or congestion or a reduction in demand for air travel in these markets would harm our business
23. 41Changes in legislation, regulation and government policy have affected, and may in the future have a material adverse effect on, our business, results of operations, cash flows and financial condition
24. 42U.S. tax legislation may adversely affect our business, results of operations, cash flows and financial condition
25. 43Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
26. 44Realization of these NOL carryforwards depends on our future taxable income, and there is a risk that, due to economic factors, a portion of our existing NOL carryforwards could expire before we can generate sufficient taxable income to use them
27. 45Any tariffs imposed on commercial aircraft and related parts imported from outside the United States may have a material adverse effect on our fleet, business, results of operations and financial condition
28. 46Our business could be materially adversely affected if we lose the services of our key personnel
29. 47We rely on our private equity sponsor
30. 48Our quarterly results of operations fluctuate due to a number of factors, including seasonality and other factors
31. 49Our lack of membership in a marketing alliance or codeshare arrangements (other than with Volaris) could harm our business and competitive position

Risks Related to Owning Our Common Stock

1. 50The market price of our common stock may be volatile, which could cause the value of an investment in our stock to decline
2. 51The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies. Broad market fluctuations may materially adversely affect the trading price of our common stock
3. 52If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our stock price and trading volume could decline
4. 53The issuance or sale of shares of our common stock, or rights to acquire shares of our common stock, or the exercise of warrants issued as part of the funding provided under the CARES Act, could depress the trading price of our common stock
5. 54The value of our common stock may be materially adversely affected by additional issuances of common stock or preferred stock by us or sales by recipients of the Share Distribution
6. 55Our anti-takeover provisions may delay or prevent a change of control, which could adversely affect the price of our common stock
7. 56Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities
8. 57Our amended and restated certificate of incorporation and amended and restated bylaws include provisions limiting ownership, control and voting by non-U.S. citizens
9. 58We are no longer a “controlled company” within the meaning of the Nasdaq Stock Market rules. However, we may continue to rely on exemptions from certain corporate governance requirements during the applicable transition periods
10. 59We are a holding company and rely on dividends, distributions, and other payments, advances, and transfers of funds from our subsidiaries to meet our obligations
11. 60We may become involved in litigation that could have a material adverse effect on our business, results of operations and financial condition
12. 61on gender, age, race or religious affiliation), sexual harassment, privacy, patent, commercial, product liability, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings
13. 62Also, in recent years, there has been significant litigation in the United States and abroad involving patents and other intellectual property rights. We have in the past faced, and may face in the future, claims by third parties that we infringe upon their intellectual property rights