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Jan 27, 2000|
Frontier Airlines Reports Seventh Consecutive Profitable Quarter
DENVER (Jan. 27, 2000) - Frontier Airlines (Nasdaq: FRNT ) today announced its seventh consecutive profitable quarter for the quarter ended Dec. 31, 1999. The airline reported net income for its fiscal third quarter of $3.2 million, or $0.17 per diluted common share, compared to net income of $2.5 million, or $0.15 cents per diluted common share, for the same time period last year. Operating revenues increased 45.9 percent to $74.0 million for the quarter ended Dec. 31, 1999 on increased capacity of 42.3 percent, as compared to the same time period last year. The airline recorded $2.0 million of income tax expense, or $0.10 per diluted share, during its third fiscal quarter. No tax expense was recorded during the same time period last year since the airline utilized tax loss carryforwards, which had not previously been recognized, to eliminate its tax liability.
For the nine months ended Dec. 31, 1999, the airline reported net income of $19.8 million, or $1.05 cents per diluted common share, compared to $12.8 million, or $0.86 per diluted common share, for the same time period last year. Operating revenues increased 57.8 percent to $237.3 million for the nine months ended Dec. 31, 1999 on increased capacity of 46.5 percent.
Total revenue per available seat mile (RASM) for the airline's fiscal third quarter increased to 8.22 cents from 8.01 cents, or a 2.6 percent increase over the same period last year. Total revenue per passenger mile (yield) for the quarter increased to 15.72 cents from 14.97 cents, or a 5.1 percent increase over the same period last year.
For the nine months ended Dec. 31, 1999, RASM increased to 9.07 cents from 8.42 cents, or a 7.7 percent increase over the same period last year. The airline's yield for the nine months ended Dec. 31, 1999 increased to 15.29 cents from 14.14 cents, or an 8.1 percent increase over the same period last year.
"It is a pleasure to note the posting of our seventh consecutive quarterly profit," said Addoms. "The December quarter represents our weakest seasonal marketing period. To continue to make good earnings headway while experiencing slack passenger demand in December and incurring higher fuel costs in the quarter is an affirmation of Frontier's ability to manage in difficult environments.
"Consumer concerns over Y2K resulted in significantly lower December revenue and traffic. We believe that had this one-time event not occurred, our quarterly results would have been much more positive. In addition, our fuel costs per gallon during our fiscal third quarter were 49 percent higher than the previous year."
The airline's operating expenses during the quarter ended Dec. 31, 1999 increased 44.2 percent to $69.9 million compared to $48.5 million for the same quarter last year. Cost per available seat mile (CASM) for the quarter increased to 7.76 cents from 7.66 cents for the same quarter last year. Fuel costs per gallon during the quarter increased 49.2 percent to 84.9 cents per gallon, compared to 56.9 cents for the same period last year. CASM excluding fuel costs were 6.49 cents, as compared to the same period last year when CASM excluding fuel costs were 6.73 cents. The airline's CASM was positively impacted during its fiscal third quarter 2000 because of a $1.5 million credit for an engine repair adjustment, which reduced CASM by 0.17 cents. This 0.17 cent increase in CASM was offset by a 0.03 cent impact from the accrual for the airline's employee performance bonus program, which was not accrued during its fiscal third quarter 1999. Excluding the net amount of these items, the airline's CASM would have been 6.63 cents or a 0.10 cent improvement over its fiscal third 1999 quarter.
The airline's breakeven load factor for its fiscal third quarter 2000 was 48.5 percent, a decrease of 2.3 points from the airline's fiscal third quarter 1999 when the airline reported a breakeven load factor of 50.8 percent. For the nine months ended Dec. 31, 1999, the airline's breakeven load factor was 51.1 percent, a decrease of 3.4 points from the prior period.
Cash, cash equivalents and short-term investments available for operations on Dec. 31, 1999 were $69.1 million, following a quarter of extensive investment activities of approximately $10.1 million that included a new CFM 737-300 engine, additional spare parts for the airline's Boeing fleet and initial down payments on the airline's Airbus aircraft orders.
Revenue enhancements impacting the quarter included:
Cost reduction initiatives implemented during the quarter included:
Business developments during the quarter included:
Business developments during the quarter included:
"We are moving forward on the Airbus project and are in the process of developing a strong internal Airbus transition team," said Addoms. "Additionally, in January, we announced plans to lease four Boeing aircraft that will serve as bridge aircraft during the upcoming spring and summer seasons, bringing the net number of aircraft in our fleet to 23. These aircraft will add approximately 20 percent capacity for Frontier during fiscal year 2001.
"This past year has continued to provide evidence of Frontier's opportunity to step up to the consumer challenge of providing attractively priced, high quality, passenger air service. Frontier is beginning to see the more favorable results of its efforts to exceed industry performance norms, and to begin creating its own unique quality and value proposition."
Denver-based Frontier Airlines commenced operations on July 5, 1994. Unlike other airlines, Frontier's low fares donot have a Saturday night stay requirement. In addition, Frontier offers frequent flyer miles in Continental Airlines' OnePass® program. The airline currently serves 21 cities coast to coast with a fleet of 20 Boeing 737 jets and employs approximately 1,900 travel professionals. Frontier's Web site may be viewed at http://www.frontierairlines.com .
Statements contained in this press release which are not historical facts are forward-looking statements as that item is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission.