Shares of Frontier Group Holdings, Inc. (ULCC), the parent company of Frontier Airlines, surged 7.64% in Wednesday's trading session, despite reporting a net loss for the third quarter of 2025. The ultra-low-cost carrier's stock rally appears to be driven by investor optimism surrounding the company's fourth-quarter guidance and improved revenue metrics.

For the third quarter, Frontier Group reported total revenue of $886.0 million, down from $935.0 million in the same period last year, on 4% lower capacity. The company posted a net loss of $77.0 million, or $(0.34) per share. However, investors seemed to focus on the positive aspects of the report, including a 2% year-over-year increase in stage-adjusted revenue per available seat mile (RASM) to 8.8 cents.

The market's bullish reaction may be attributed to Frontier's upbeat fourth-quarter outlook. The company expects adjusted diluted earnings per share to range from $0.04 to $0.20 for Q4 2025, signaling a potential return to profitability. This positive guidance, combined with the airline's cost control efforts and strategic capacity management, appears to have overshadowed the Q3 loss, fueling investor confidence in Frontier's near-term prospects.