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Passenger revenues during the quarter ended June 30, 2001 were $120.7 million, an 8.8 percent increase as compared to the same time period last year when the airline’s passenger revenues were $111.0 million. The airline’s total operating revenues during the quarter ended June 30, 2001 were $123.3 million, a 9.3 percent increase as compared to the same time period last year when the airline’s total operating revenues were $112.8 million.

President’s Comments
Frontier President Sam Addoms said, “Obviously, like the rest of the industry, we are experiencing the negative effects of a slowing economy, including lower demand for business travel and a deeply discounted fare environment. Additionally, last year’s fiscal first quarter revenue was positively impacted by a major competitor’s operational difficulties at Denver International Airport. As with any business, there is both a revenue and a cost side to the equation and clearly we have challenges in both of those areas today.

“During the fiscal first quarter, we took delivery of our first two Airbus aircraft and incurred approximately $2.0 million of expense related to our fleet transition. We were also impacted by three weather-related incidents during our fiscal first quarter, which contributed to an unusual increase in our expenses. During April, a spring blizzard disrupted our operation, increasing our passenger re-accommodation expenses and deicing costs. A May hailstorm in Omaha, Nebraska damaged one of our aircraft, and a June hailstorm in Denver damaged four additional aircraft and caused significant disruptions to our flight schedule. The impact of the hail damage during the quarter and subsequent aircraft repairs cost us approximately $1.8 million in additional expenditures, including entering into several short-term leases for charter aircraft in order to minimize inconvenience to our customers.

“Certainly, while some of these expenses were planned for, we must redouble our efforts to identify and implement cost saving opportunities and improve our productivity. As our Airbus fleet transition continues, we expect to make progress in both of these key areas. We anticipate that our fiscal first quarter marks the peak in our Airbus transition costs, especially when these transition costs are not offset by operating and cost efficiencies provided yet by the new aircraft.

“While we are experiencing a softening in our unit revenues this summer, the demand for Frontier’s service has not decreased and we continue to plan for annual capacity growth of approximately 20 percent. We look forward to entering two new markets, Austin, Texas and Reno/Lake Tahoe, Nevada on October 1.”

Operating Highlights
The airline’s traffic, as measured by revenue passenger miles (RPMs), grew at a rate of 16.5 percent during its fiscal first quarter, outpacing capacity growth, as measured by available seat miles (ASMs), of 12.9 percent. As a result, the airline’s load factor was 67.6 percent for its first fiscal quarter, a 2.1 point improvement over last year’s load factor of 65.5 percent during the same time period.

The airline carried 846,000 passengers, an 18.8 percent increase over the same period last year when the airline carried 712,000 passengers. Total revenue per available seat mile (RASM) for the quarter decreased 3.2 percent to 10.74 cents from 11.09 cents for the same period last year. The airline’s total revenue per passenger mile (yield) for the quarter decreased 6.2 percent to 15.88 cents from 16.92 cents for the same period last year. The airline’s average fare during its fiscal first quarter 2002 was $134, a 10.1 percent decrease from its fiscal first quarter 2001, when the average fare was $149.

The airline’s operating expenses during the quarter ended June 30, 2001 increased 28.1 percent to $112.0 million compared to $87.4 million for the same quarter last year. Cost per available seat mile (CASM) for the quarter increased 1.16 cents or 13.5 percent to 9.75 cents from 8.59 cents for the same quarter last year. Fuel cost per gallon during the quarter, including taxes and the cost of delivering fuel into the aircraft, increased 4.6 percent to 96.9 cents per gallon, compared to 92.6 cents for the same period last year. CASM excluding fuel increased 1.06 cents, or 14.8 percent, to 8.22 cents from the same period last year when CASM excluding fuel was 7.16 cents. The airline estimated the impact on CASM related to weather disruptions during its fiscal first quarter was 0.16 cents, which includes costs associated with interrupted trip expenses, deicing and maintenance expenses and that the impact on CASM related to its Airbus transition during the same time period was 0.15 cents.

Revenue Enhancements Initiated During the Quarter Included:

• Took delivery of two Airbus A319, which entered service on June 21, bringing the airline’s total fleet size to 27 aircraft,
• Announced and began selling tickets for a codeshare agreement with Great Lakes Aviation, Ltd. to seven Great Lakes markets including Casper, WY; Cody, WY; Gillette, WY; Cheyenne, WY; Amarillo, TX; Santa Fe, NM and Hayden, CO,
• Increased capacity in seven markets: Albuquerque, Atlanta, Dallas, Portland, Salt Lake City, San Francisco, Seattle; reducing capacity in one market, Las Vegas,
• Inaugurated service to the airline’s 23rd city with three daily round-trip flights to Houston, TX,
• Enrolled approximately 53,000 new members in its new frequent flyer program, EarlyReturns, bringing the total number of members to over 130,000.

Other Events During the Quarter Included:

• Named Jeff S. Potter as chief operating officer and executive vice president, and also appointed Potter as a member of the airline’s Board of Directors,
• Generated 21.5 percent of its flown revenue during the three months ended June 30, 2001 via the airline’s Web site, and 30.1 percent of its flown revenue during the three months ended June 30, 2001 via all Web sites,
• Announced aircraft financing with PK AIRFINANCE, which allows the airline to borrow up to $72 million for the purchase of three A319s in May, August and September 2001. The airline borrowed $24 million under this agreement in May 2001 at an interest rate of 6.71 percent,
• Sustained damage to five of 27 aircraft, approximately 20 percent of its fleet, during two severe hailstorms,
• Amended a five-year contract with the Frontier Airline Pilots Association in order to establish pilot pay rates using the same industry peer group used to establish the airline’s other employee pay scales.

Cash Flow and Balance Sheet Highlights
Cash, cash equivalents and short-term investments available for operations and investing activities on June 30, 2001 were $102.1 million. Cash provided by operating activities for the quarter ended June 30, 2001 was $23.1 million, compared to $24.5 million for the same period last year. The airline reported working capital of $41.8 million as of June 30, 2001, a 34.3 percent decrease from the airline’s working capital on March 31, 2001, when the airline reported working capital of $63.6 million. This decrease was largely the result of cash used for the purchase of the airline’s first Airbus aircraft and spare aircraft parts for the new Airbus fleet. The airline used $52.9 million during the period for the purchase of its first Airbus aircraft, necessary aircraft parts inventory associated with its transition to an all-Airbus fleet, and other general equipment purchases. The airline borrowed $24 million for the purchase of its first Airbus aircraft, and also paid $10.4 million during its fiscal first quarter for pre-delivery deposits for future purchases of Airbus aircraft, which includes $9.2 million in deposits for options exercised, which advanced the delivery dates on two Airbus aircraft from the third and fourth calendar quarter of 2004 to May and June 2002.

The airline will host a conference call to discuss its quarterly earnings on Aug. 3, 2001 at 9:00 a.m. Mountain Daylight 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://tm.intervu.net/template/smirror/ivtemplates/ccbn/2001/august/03/ipc-ccbn-frnt-08032001-54908-rl-8.ram

Denver-based Frontier Airlines is the second largest jet service carrier at Denver International Airport, serving 23 cities coast to coast with a fleet of 27 aircraft and employing approximately 2,500 aviation professionals. In June 2001, BusinessWeek ranked Frontier 14th on its list of Hot Growth Companies. Frontier provides capacity and other data and industry comparisons 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, discussions pertaining to expanding Frontier’s service into new markets, the use of the airline’s Airbus aircraft to add capacity and the plan to bring affordable fares to more communities. 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 revenues, unit revenues, unit costs, earnings per share and capacity include, but are not limited to: the stability of the U.S. economy, inflation, the economic environment of the airline industry and the economic environment in general that may, individually or in combination with other factors, affect behavior of the fare-paying public; 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 Form 10-K for its fiscal year ended March 31, 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.

-Financial Tables to Follow-

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