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Chief Executive Officer’s Comments
Frontier President and CEO Jeff Potter said, “We are disappointed with our fiscal third quarter results, and clearly Frontier continues to operate in an environment of diminished demand resulting from a sustained economic downturn, global uncertainties and an unstable and extremely competitive industry environment. The bright spot in our performance can once again be found in our unit cost reductions. Those results, combined with a relatively strong travel period over the holiday season, enabled us to operate profitably during the month of December, keeping in mind that one of the busiest days associated with the Thanksgiving travel period fell in the month of December 2002. Looking forward, in light of the difficult revenue environment coupled with high fuel costs, both of which are expected to continue for the foreseeable future, we now anticipate reporting a fiscal fourth quarter 2003 loss in the range as our fiscal third quarter loss.”

Operating and Financial Highlights
The airline’s traffic, as measured by revenue passenger miles (RPMs), grew at a rate of 71.2 percent during fiscal third quarter 2003, while capacity growth, as measured by available seat miles (ASMs), increased by 50.9 percent, from the same time last year. As a result, the airline’s load factor was 59.5 percent for its fiscal third quarter, an increase of 7.1 load factor points compared to last year’s load factor of 52.4 percent during the same time period. During fiscal third quarter 2003, the airline’s breakeven load factor increased 9.3 load factor points from 54.3 percent to 63.6 percent.

The airline’s cost per available seat mile (CASM) for the quarter decreased 11.3 percent to 8.28 cents from 9.34 cents for the same quarter last year. CASM excluding fuel decreased 16.2 percent to 6.84 cents from the same period last year when CASM excluding fuel was 8.17 cents. The airline reported aircraft utilization of 9.5 hours during its fiscal third quarter 2003, a 22.2 percent increase from 7.8 hours during the same period last year.

Chief Financial Officer Paul Tate said, “We initiated a fuel hedging program in late November 2002, which allowed us to reduce fuel expenses in the month of December 2002, on a pretax basis, by $68,067. We also have entered into derivative contracts covering approximately 15 percent of our jet fuel requirements through May 2003 at an average price of $0.77 per gallon.”

The Company accounts for the derivative contracts entered into as trading contracts under FAS133, and therefore records any settlements received or paid as an adjustment to the cost of fuel. Changes in the fair value of the contracts attributable to future prices are recorded as nonoperating income. As a result, the fiscal third quarter 2003 results include an unrealized hedge gain of $237,933 in nonoperating income. There were no fuel hedges in effect earlier in the fiscal third quarter 2003 or in the fiscal third quarter 2002.

For the quarter ended Dec. 31, 2002, the airline’s average cost of fuel was $0.97 per gallon, including taxes, into-plane flowage fees. On average, taxes, into-plane fees and flowage fees are approximately $0.15 per gallon.

The airline reported revenues of $120.3 million during its fiscal third quarter 2003, a 29.9 percent increase over the same period last year, when the airline reported revenue of $92.6 million. Passenger revenue per passenger mile (yield) for the airline’s third fiscal quarter 2003 decreased 23.6 percent to 12.93 cents from 16.93 cents for the same period last year. Passenger revenue per available seat mile (RASM) for the quarter decreased 13.4 percent to 7.69 cents from 8.88 cents for the same period last year. The airline’s average fare during its fiscal third quarter 2003 was $111, a 17.2 percent decrease from its fiscal third quarter 2002, when the average fare was $134.

Business Developments During the Quarter Included:
• Received conditional approval from the Air Transportation Stabilization Board (ATSB) for a $63 million federal loan guarantee of a $70 million commercial loan facility;
• Signed a purchase and long-term services agreement with LiveTV to install satellite-receiving equipment that will bring DIRECTV AIRBORNE- satellite programming to every Airbus seatback by the end of February 2003;
• Accepted delivery of four 132-seat Airbus A319 aircraft;
• Launched inaugural international service to Cancun and Mazatlan, Mexico;
• Inaugurated service to Fort Myers, Fla., Oklahoma City, Okla., and Tucson, Ariz., and discontinued service to Boston, Mass.;
• Inaugurated Frontier JetExpress service, operated by Mesa Airlines, Inc., to Oakland, Calif., and discontinued service to St. Louis, Mo.;
• Increased the percentage of Internet-related flown revenue generated from the airline’s Web site to 36.5 percent of the airline’s total revenue, and increased the percentage of Internet-related flown revenue generated from all Internet sites to 50.4 percent of the airline’s total revenue;
• Enrolled approximately 53,000 new members in EarlyReturns, bringing the total number of members of the airline’s frequent flyer program to over 469,000.

Liquidity
Cash, cash equivalents and short-term investments available for operations and investing activities on Dec. 31, 2002 totaled $31.5 million. The airline reported working capital of $1.3 million as of Dec. 31, 2002, compared to working capital of $5.4 million on Sept. 30, 2002.

Frontier’s Chief Financial Officer Paul Tate noted, “During our fiscal third quarter, cash use included $5.3 million for aircraft pre delivery deposits and $5.0 million to begin the installation of hardware associated with our new DIRECTV programming. We have taken several actions designed to improve our liquidity. We received conditional approval during our fiscal third quarter from the Air Transportation Stabilization Board (ATSB) for a $63 million federal loan guarantee of a $70 million commercial loan facility. Subject to satisfaction of the conditions imposed by the ATSB and obtaining the necessary internal approvals, we expect to close on this transaction during the Company’s fiscal fourth quarter 2003. In addition, during our fiscal third quarter, we completed the sale/leaseback of one Airbus A319 aircraft, which resulted in proceeds of $5.3 million, net of debt repayment and early extinguishment costs. We are also working with a third party to complete an assignment of our March 2003 Airbus A319 delivery. Both aircraft would be leased to the Company under a five-year operating lease. We are hopeful that this transaction will be completed during our fiscal fourth quarter, resulting in the return of our pre delivery deposit payments of approximately $7.1 million.”

Potter concluded, “Unfortunately, our fiscal third quarter financial results do not reflect the hard work and magnificent efforts of our employees, who reached several milestones during the quarter, including opening four new domestic markets, including one JetExpress market; inaugurating our first international flights; and implementing our new DIRECTV service. More importantly, those accomplishments were achieved while posting double-digit unit cost reductions. While we continue to be tested in the area of stimulating demand and improving unit revenue, I am confident that the Frontier team, which has faced its share of past challenges, will work very hard to overcome these current economic difficulties, and that the unique esprit de corps of our 3,100 aviation professionals will keep our customers returning to Frontier.”

Senior leadership will host a conference call to discuss the airline’s quarterly earnings on Feb. 5, 2003 at 9:00 a.m. Mountain Standard Time. The call is available via the World Wide Web on the airline’s Web site at www.frontierairlines.com or using the following URL: http://www.vcall.com/EventPage.asp?ID=82604.

About Frontier
Denver-based Frontier Airlines employs approximately 3,100 aviation professionals and is the second largest jet service carrier at Denver International Airport. Frontier and its regional jet partner Frontier JetExpress offer service to 39 cities. Frontier’s fleet consists of 37 aircraft, which feature a single-class configuration. In 1999, 2000 and 2001, Frontier's maintenance and engineering department received the Federal Aviation Administration's highest award, the Diamond Certificate of Excellence, in recognition of 100 percent of its maintenance and engineering employees completing advanced aircraft maintenance training programs. In April 2002, Entrepreneur ranked Frontier one of two "Best Low-Fare Airlines.” Frontier provides capacity information and other operating statistics on its Web site, which may be viewed at www.frontierairlines.com.

Legal Notice Regarding Forward-Looking Statements
Frontier notes that this press release contains forward-looking statements and that certain information contained in this press release involves risks and uncertainties that could result in actual results differing materially from expected results. These statements include, but are not limited to, projections for the current quarter, the ability to complete the March 2003 delivery assignment, and the intention of Frontier to improve its liquidity through the ATSB guaranteed loan. Forward-looking statements represent the Company’s expectations and beliefs concerning future events, based on information available to the Company as of the date of this press release. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Some of the factors that could significantly impact the forward-looking statements in this press release include, but are not limited to: the uncertainty of spring break and other bookings and increased business travel spending; capacity and pricing actions of directly competing airlines; uncertainties related to the bankruptcy of United Airlines; general industry capacity and pricing decisions; the inability to satisfy all conditions of the ATSB guaranteed loan; additional incidents, including a potential war with Iraq, that could cause the public to question the safety and/or efficiency of air travel industry consolidation; the stability of the U.S. economy; uncertainties regarding aviation fuel prices; and operational disruptions as a result of bad weather. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release. Additional information regarding these and other factors may be contained in the Company’s SEC filings, including without limitation, the Company’s 10-Q for its fiscal second quarter ended Sept. 30, 2002 and the Company’s 10-K for its fiscal year ended March 31, 2002.

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