Frontier Group (NASDAQ: ULCC) stock flew higher on Thursday after posting stronger than expected profits and projecting continued improvement.

For the third quarter, the air carrier posted GAAP EPS of $0.13, beating expectations by $0.03. Meanwhile, a 43.8% rise in revenue to $906M only narrowly missed estimates. Management touted a 26% increase in revenue per available seat mile as compared to 2019, cost controls, and a significant sequential improvement in adjusted pre-tax margin to 5.2% as key positives in the quarter. Further, $78 in ancillary revenue per passenger was cited as a record.

“Leisure demand has structurally changed with customers having more flexibility and a desire to travel more often,” CEO Barry Biffle said. “With our Low Fares Done Right model and significant order book of A320neo family aircraft, Frontier is positioned to capture a disproportionate share of the growing leisure segment as America’s ultra-low-cost carrier.”

Adjusted cost per available seat mile fell 5%, largely due to a 13% lower average fuel cost per gallon in the quarter.

Moving forward, fuel costs are expected to be between $3.70 to $3.75 per gallon for the fourth quarter, down from the $3.75 to $3.80 in the third quarter forecasts. Overall operating expenses (excluding fuel) are anticipated to be between $565M and $585M, down from $902M in the second quarter and $850M in the third quarter. Adjusted pre-tax margin is anticipated to be between 3 and 7 percent in the final quarter of the fiscal year.

Shares of Frontier Group Holdings (ULCC) surged 16.19% in afternoon trading on Thursday.

Dig into the details of the earnings results.