Frontier Airlines Posts Fiscal 1Q Profit
By Aaron Karp, Air Transport World | Jul. 31, 2006
Frontier Airlines posted net income of $4 million for its fiscal first quarter ended June 30, a solid improvement over a net loss of $2.7 million in the year-ago quarter.
President and CEO Jeff Potter said the carrier was profitable despite "intensified competition" at its Denver hub--where Southwest Airlines launched flights this year--and high fuel costs, but warned that long-term profitability is still a challenge. "It doesn't end with one good quarter," he said.
Revenues for the quarter totaled $302.1 million, up 27.8% over revenues of $236.4 million in the year-ago quarter, as operating expenses rose 22.6% to $291.4 million including a 51.2% surge in fuel costs to $90.4 million. Operating income was $10.7 million, an improvement over an operating loss of $1.2 million last year.
Mainline RPMs grew 24.2% to 2.28 billion on an 18.9% increase in capacity to 2.79 billion ASMs. Load factor rose 3.5 points to 81.9% as total yield climbed 4% to 11.69 cents and CASM excluding fuel decreased 6.1% to 6.15 cents.
Frontier will take control of six more gates at DEN by mid-2007 as it seeks to grow in the face of competition from Southwest. Potter said it is committed "to retain our position as the airline of choice in Denver" despite the new rival.