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Mar 26, 2003
Frontier Airlines Provides Additional Q4 FY03 Guidance
DENVER (March 26, 2003) - Frontier Airlines (Nasdaq: FRNT) today provided additional earnings per share (EPS) guidance for its fiscal fourth quarter ended March 31, 2003. The airline had previously estimated that it would report a fiscal fourth quarter 2003 loss in a range similar to its fiscal third quarter loss of $6.2 million, or $0.21 per common share, which included a special charge of $1.1 million. The airline issued additional guidance in order to quantify the effects of a blizzard in Denver last week that caused Denver International Airport to shut down for two days. Frontier cancelled 371 flights during the two-day shutdown and, due to associated passenger re-accommodations, experienced a substantial reduction in the company's ability to take close-in bookings. As the result of this revenue loss and costs associated with the blizzard, along with higher than anticipated fuel costs, the airline estimates its earnings per share (EPS) for its fiscal fourth quarter will fall within the range of ($0.34) to ($0.38) loss per share. The Company plans to release its actual fiscal fourth quarter results on May 22, 2003 after the close of normal and after-hours trading sessions.
The airline also announced that it recently entered into a marketing program that will enable the airline to receive fees in the future based on the program's performance. At signing, the third party paid the airline $10 million, which represents a pre-payment of some of the fees it is anticipated the airline will earn through the program's performance. This $10 million will be reflected as unrestricted cash in the airline's financial statements for the quarter ended March 31, 2003; however, that amount will not be taken into income until it is earned as program fees in accordance with the program agreement. There are also certain circumstances in the agreement that would require re-payment of the $10 million in pre-paid fees to the third party.
Providing updated information related to the airline's fuel hedging program for its fiscal first quarter FY04, the airline reported that it has entered into an additional derivative contract, covering approximately 15 percent of its jet fuel requirements from April 1 through June 30, 2003, at a price of $0.7925 per gallon. The Company now has hedged 30 percent of its fuel requirement for April and May 2003; 20 percent for June 2003; and five percent thereafter through Nov. 30, 2003.
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 35 aircraft, which feature a single-class configuration. In 2002, for the fourth consecutive year, Frontier's maintenance and engineering department has received the Federal Aviation Administration's highest award, the Diamond Certificate of Excellence. This award signifies 100 percent of the airline's maintenance and engineering employees have completed advanced aircraft maintenance training programs. In April 2002, Entrepreneur ranked Frontier one of two "Best Low-Fare Airlines." Frontier provides capacity information and corporate information on its Web site, which may be viewed at www.frontierairlines.com.
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