Frontier forecasts third-quarter profit above estimates on higher airfares after Spirit's exit

July 29 (Reuters) - Ultra-low-cost carrier Frontier Airlines on Wednesday forecast third-quarter earnings above Wall Street estimates, betting on stronger pricing power following rival Spirit's exit even as the Middle East conflict keeps jet fuel costs elevated.

The liquidation of Spirit Airlines has allowed Frontier to raise fares by more than 50% and limit the impact of a ballooning fuel bill on its margins, as U.S. carriers report success in passing on a portion of their higher costs to travelers.

Frontier CEO Jimmy Dempsey said he expects revenue per available seat mile, a proxy for pricing power, to increase 20% in the third quarter from a year earlier — the third consecutive quarter of double-digit growth.

Shares of the Denver-based carrier were up 1.8% in early morning trading.

"We are pleased to see macro conditions remain strong and I'm confident we have the right plan in place to restore sustainable earnings growth for the long term," Dempsey said in a statement.