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Frontier President Jeff Potter stated: "We are very pleased with our results and commend Frontier's outstanding employees for their perseverance during this extremely challenging period in our industry. Because of the Frontier team's resolve to analyze and reduce our capacity needs, reduce capital and other non-essential spending as well as sacrifice personal income and at the same time increase our productivity, we were able to significantly lessen the impact of September 11 on our fiscal third quarter. During the quarter, our capacity and daily average aircraft utilization were reduced by nearly six percent and 15 percent, respectively. However, we were able to successfully manage our yield in this weakened fare environment by increasing it nearly five percent during the quarter on a year over year basis."

Operating Highlights
Passenger revenues during the airline's fiscal third quarter decreased 18.6 percent to $90.6 million, and total operating revenues decreased 19.0 percent to $92.6 million for the quarter ended Dec. 31, 2001 on a year over year basis. Passenger revenue per available seat mile (RASM) for the airline's fiscal third quarter decreased 13.7 percent to 8.97 cents from 10.39 cents for the same period last year. Passenger revenue per passenger mile (yield) increased 5.4 percent to 17.11 cents from 16.24 cents for the same period last year.

The airline's operating expenses during the quarter ended Dec. 31, 2001 decreased 3.7 percent to $95.8 million compared to $99.5 million for the same quarter last year. Cost per available seat mile (CASM) for the quarter increased 0.5 percent to 9.34 cents from 9.29 cents for the same quarter last year. Fuel costs during the quarter decreased 35.3 percent to $0.79 per gallon, compared to $1.22 per gallon for the same period last year. CASM, excluding fuel costs, for the quarter increased 10.9 percent to 8.17 cents, as compared to the same period last year when CASM, excluding fuel costs, was 7.37 cents.

The airline's breakeven load factor, excluding the federal grant and other unusual items, for its fiscal third quarter 2002 decreased 0.6 points to 53.7 percent from 54.3 percent for the same period last year.

Unusual Items
As a result of the enactment of the Air Transportation Safety and Stabilization Act, the Company was authorized to receive as much as $20.2 million of pre-tax grant funds to cover incremental losses from Sept. 11 through Dec. 31, 2001. After the events of Sept. 11, despite the actions taken by the Company to reduce its operating expenses, Frontier nonetheless incurred an operating loss. As of Dec. 31, 2001, Frontier had received $17.5 million in pre-tax government grant monies. Based on the incremental losses incurred from Sept. 11 through Dec. 31, 2001, Frontier estimates that it will ultimately be entitled to retain $12.6 million of the federal grant received through Dec. 31, of which $3.8 million was recognized as non-operating income in the Company's fiscal third quarter.

The Company's income tax credit was a result of accruing income taxes during the fiscal year ended March 31, 2001 at a rate that was greater than the actual effective tax rate as determined upon the filing of the 2001 income tax returns in December 2001, offset by an increase in the estimated effective tax rate for fiscal year 2002 to 38.8 percent.

Frontier's fleet of 29 aircraft includes seven Boeing 737-200A aircraft. The events of Sept. 11 have resulted in a number of 737-200 aircraft worldwide to be permanently retired from scheduled service. The Company intends to return all of its 737-200A aircraft to its lessors between September 2002 and October 2005, and the Company has concluded that a portion of the carrying value of 737-200A spare parts and a spare engine have been permanently impaired. The $1.5 million pre-tax write down taken in the airline's fiscal third quarter 2002 reflects the Company's estimate of this impairment.

Potter continued, "We are extremely grateful to our government for its prompt enactment of the Air Transportation Safety and Stabilization Act. Because of the grant monies provided by the Act, Frontier was able to maintain its successful record, reporting profitability for our fifteenth consecutive quarter. Clearly, the grant monies, in Frontier's case, are doing what they were intended to do, compensate for losses that are related to September 11 and help the airline industry weather the decrease in revenue as a result of diminished consumer confidence. With this stabilization, we can now look forward to continuing Frontier's growth plan in this new environment. We realize that challenges will continue to arise as we move forward, and that these challenges will include new ways of implementing security at airports and in and around our aircraft. However, we are confident that by working with our various governmental agencies, we can do our part to restore confidence in our air travel system.

Liquidity
Cash, cash equivalents and short-term investments available for operations on Dec. 31, 2001 were $91.8 million as compared to $90.7 million on Sept. 30, 2001. The airline's cash position on Dec. 31, 2001 included $8.8 million in deferred excise tax payments, which were paid in January 2002, and an estimated $5.0 million in excess government grant monies that the airline anticipates it may return. While the airline's cash flow from operations during its fiscal second quarter was negative at approximately $85,000 per day, the airline's estimated cash flow from operations, excluding monies received from the federal grant and monies retained by the deferral of excise taxes, during its third fiscal quarter began to approach breakeven. The airline reported working capital of $43.7 million as of Dec. 31, 2001, a 5.0 percent decrease from the airline's working capital at Sept. 30, 2001, when the airline reported working capital of $46.0 million.

Business initiatives during the quarter included:

• Increased the percentage of Internet-related flown revenue generated from the airline's Web site to 28.2 percent of the airline's total revenue from 6.4 percent for the same period last year, and increased the percentage of Internet-related flown revenue generated from all Internet sites to 38.8 percent of the airline's total revenue from 15.1 percent for the same period last year.
• Expanded the codeshare partnership with Great Lakes Aviation to 29 new markets, bringing the total number of Frontier/Great Lakes codeshare markets to 35.
• Reinstated round-trip service to Ronald Reagan Washington National Airport on Dec. 12 during phase II of that airport's reopening.
• Inaugurated service to Reno/Lake Tahoe and Austin, Texas on Oct. 1, 2001.
• Updated the Company's Web site, www.frontierairlines.com, with improved navigation and added services including the Frontier Travel Center, in partnership with a wholly owned subsidiary of Expedia, Inc., where users can book hotels and car rentals on Frontier's site.
• Resumed on-board catering service on Dec. 11 (service was discontinued on Oct. 1 due to increased security requirements and as a cost saving measure).
• Reinforced flight deck doors on the fleet of Boeing 737 aircraft and developed a plan to implement reinforced flight deck doors on all Airbus aircraft by March 1, 2002.
• Implemented 100 percent positive bag match program in mid-December in accordance with the Aviation and Transportation Security Act (ATSA).
• Named Paul H. Tate as Chief Financial Officer.
• Increased the number of EarlyReturns frequent flyer members 18 percent from approximately 182,000 on Sept. 30 to approximately 220,000 on Dec. 31, 2001.
• Signed the airline's 7,600th corporate account.
  

Fiscal Fourth Quarter Initiatives
Several initiatives are being implemented in the Company's fourth fiscal quarter, including entering three new markets this month: New Orleans, Sacramento and Fort Lauderdale. Additionally, Frontier will begin its codeshare relationship with Mesa Air Group during the current quarter, beginning service to San Jose and supplementing Frontier's existing service in its Houston market. In order to accommodate the new growth, Frontier plans to take delivery of its sixth Airbus jet in February 2002, bringing the total fleet to 30 aircraft.

The airline will host a conference call to discuss its quarterly earnings on Feb. 6, 2002 at 9:00 a.m. MST. The call is available via the World Wide Web on the airline's Web site at www.frontierairlines.com or by using the following URL: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=FRNT&script=1020&item_id=w,578395,0.
Denver-based Frontier Airlines is the second largest jet service carrier at Denver International Airport, serving 26 cities coast to coast with a fleet of 29 aircraft and employing approximately 2,500 aviation professionals. In June 2001, BusinessWeek ranked Frontier 14th on its list of Hot Growth Companies and in September 2001, Fortune magazine ranked Frontier 41st on its 100 Fastest Growing Companies list. 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. Frontier provides capacity information and other operating statistics on its Web site, which may be viewed at www.frontierairlines.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
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, discussions pertaining to expanding Frontier's service into new markets. 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: additional incidents that could cause the public to question the safety and/or efficiency of air travel; operational disruptions; industry consolidation; air traffic control-related difficulties; the impact of labor issues; actions of the federal and local governments; enhanced security requirements; changes in the government's policy regarding relief to the airline industry; the stability of the U.S. economy; the economic environment of the airline industry; the timing of, and expense associated with, expansion and modification of our operations in accordance with our business strategy or in response to competitive pressures or other factors; increased federal scrutiny of low-fare carriers generally that may increase our operating costs or otherwise adversely affect us; actions of competing airlines, such as increasing capacity and pricing actions of United Airlines and other competitors; the availability of suitable aircraft, which may affect our ability to achieve operating economies and implement our business strategy; the unavailability of, or inability to secure upon acceptable terms, financing necessary to purchase aircraft that we have ordered; issues relating to our transition to an Airbus aircraft fleet; uncertainties regarding aviation fuel prices; operational disruptions as a result of bad weather; air traffic control-related difficulties; the impact of labor issues; and actions of the U.S. and local government and regulatory agencies. 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-K for its fiscal year ended March 31, 2001; the Company's Form 10-Q for the quarter ended Sept. 30, 2001; the Company's Form 8-K filed May 7, 2001 and the Company's Form 8-K filed January 22, 2001, as amended by the Company's Form 8-K/A filed July 11, 2001.

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