Shares of Frontier Group Holdings, Inc. (NASDAQ: ULCC) plummeted 6.60% in pre-market trading on Tuesday following the release of disappointing second-quarter results and a weak third-quarter outlook. The budget airline reported larger-than-expected losses and missed revenue estimates, reflecting the challenges faced by the domestic air travel market.

Frontier Group posted a quarterly loss of $0.31 per share, significantly wider than the analyst consensus estimate of $0.20 per share. This represents a stark reversal from the $0.14 per share profit reported in the same period last year. The company's total operating revenue for the quarter came in at $929 million, falling short of the analyst expectations of $984.491 million and marking a 4.52% decrease from the previous year.

Adding to investor concerns, Frontier provided a gloomy outlook for the third quarter, forecasting an adjusted loss per share between $0.26 and $0.42, considerably worse than analysts' estimate of an $0.11 loss. The company cited soft domestic travel demand as a key factor pressuring fares and impacting its financial performance. In response to these challenges, Frontier plans to reduce its third-quarter capacity by 3% to 5% compared to the previous year. Despite these headwinds, CEO Barry Biffle expressed optimism, stating, "The domestic supply and demand balance is anticipated to improve sequentially over the next several months in Frontier markets." The company also projects mid-to-high single-digit revenue per available seat mile (RASM) growth in the third quarter on a stage-adjusted basis, potentially setting the foundation for profitability in 2026.