Frontier posts worst quarterly loss in its history, will sell 4 jets
01-25-2008, 07:02 PM
#1
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Frontier posts worst quarterly loss in its history, will sell 4 jets
http://blogs.usatoday.com/sky/2008/0...tier-loss.html
Frontier Airlines reported its largest ever quarterly loss for the October-to-December period, saying soaring fuel costs and the delayed start-up of its new turboprop subsidiary contributed to the result. The carrier lost $32.5 million (89 cents a share) for the quarter, which compared to a $14.4 million (39 cents a share) loss during the same quarter a year ago. Saying the results were "clearly unacceptable," Frontier CEO Sean Menke added "this loss is even more unbearable when it follows one of the best quarters in our history," according to the Rocky Mountain News.
Frontier said it lost $8.4 million related to its regional jet operations, or flights operated by contract partners. "We had three different regional jet fleets flying for us at some point during the December quarter," Frontier CFO Paul Tate says. In addition, its delayed Lynx turboprop resulted in $4.8 million in costs and losses, according to the Rocky Mountain News. Reuters adds Frontier also "said it would sell four of its nearly two dozen Airbus jetliners to slow its capacity growth and improve its cash position." The airline still plans to take delivery of two new Airbus A320 jets, according to The Denver Post. With the changes, Frontier said its capacity growth will drop to 12%-14% this quarter instead of the 18%-20% the airline had initially planned for.
In addition to soaring fuel costs, Frontier also faced intense competition last quarter at its Denver hub, where United is an entrenched rival and Southwest dramatically ramped up operations. Frontier already made some cost-cutting moves last quarter, trimming 100 jobs and ending several poor-performing routes –- mostly non-Denver routes -– that allowed the carrier to instead expand in more profitable markets. Despite the record loss, CFO Tate said the quarter was a "disconnect on results." He pointed out that unit revenue increased 5.9% while unit costs -– excluding fuel -– dropped 6.4%. "If you look at it from the 30,000-foot view, one would think we just knocked the cover off the ball," Tate is quoted as saying by The Associated Press.
Frontier Airlines reported its largest ever quarterly loss for the October-to-December period, saying soaring fuel costs and the delayed start-up of its new turboprop subsidiary contributed to the result. The carrier lost $32.5 million (89 cents a share) for the quarter, which compared to a $14.4 million (39 cents a share) loss during the same quarter a year ago. Saying the results were "clearly unacceptable," Frontier CEO Sean Menke added "this loss is even more unbearable when it follows one of the best quarters in our history," according to the Rocky Mountain News.
Frontier said it lost $8.4 million related to its regional jet operations, or flights operated by contract partners. "We had three different regional jet fleets flying for us at some point during the December quarter," Frontier CFO Paul Tate says. In addition, its delayed Lynx turboprop resulted in $4.8 million in costs and losses, according to the Rocky Mountain News. Reuters adds Frontier also "said it would sell four of its nearly two dozen Airbus jetliners to slow its capacity growth and improve its cash position." The airline still plans to take delivery of two new Airbus A320 jets, according to The Denver Post. With the changes, Frontier said its capacity growth will drop to 12%-14% this quarter instead of the 18%-20% the airline had initially planned for.
In addition to soaring fuel costs, Frontier also faced intense competition last quarter at its Denver hub, where United is an entrenched rival and Southwest dramatically ramped up operations. Frontier already made some cost-cutting moves last quarter, trimming 100 jobs and ending several poor-performing routes –- mostly non-Denver routes -– that allowed the carrier to instead expand in more profitable markets. Despite the record loss, CFO Tate said the quarter was a "disconnect on results." He pointed out that unit revenue increased 5.9% while unit costs -– excluding fuel -– dropped 6.4%. "If you look at it from the 30,000-foot view, one would think we just knocked the cover off the ball," Tate is quoted as saying by The Associated Press.
01-26-2008, 12:35 PM
#5
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not looking good for Frontier. Read on another forum they're about to drop LA-San Jose del Cabo, when American and Mexicana are seeing good loads and making money on the route.
Something needs to be done
Something needs to be done
01-26-2008, 07:58 PM
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Position: FO
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