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"After the September 11 terrorist attacks, the Federal Aviation Administration immediately suspended all commercial airline flights, and clearly our September traffic results reflect the effects of those events," said President and Chief Operating Officer Jeff Potter. "While the immediate effect to Frontier's load factor and bookings was substantial, we are encouraged by the potential recovery of our traffic, especially during recent days, when we have experienced bookings equal to, or on some days, higher than, pre-September 11 levels despite a capacity reduction of 20 percent. We recently announced that, due to this increased demand, we will increase additional flights in a few key markets, effective November 15, and this schedule increase resulted in the recall of approximately 70 employees. Additionally, we are encouraged by our September average fare, and we have not seen a significant decline in cash from operations during the month of September, with the exception of the three days during which time the air system was shutdown. We recently inaugurated service to our 23rd and 24th cities, Austin, Texas and Reno, Nev., from our Denver hub, and we plan to continue implementing our Airbus transition plan, with the next anticipated delivery to occur in Feb. 2002."

Prior to Sept. 11, the airline operated 126 average daily systemwide flights, and effective with its Oct. 1 schedule change, it currently operates 103 average daily systemwide flights. From Sept. 1 through Sept. 10, the airline's load factor averaged 53.6 percent; from Sept. 14, the date Frontier resumed service, through Sept. 30, the airline's load factor averaged 40.5 percent. During the immediate days following the Sept. 11 attacks, Frontier experienced extremely light bookings, but the airline's bookings since then have steadily improved. The airline's bookings are currently, on average, approximately 90-100 percent of normal targets.

As a result of the Air Transportation Safety and System Stabilization Act, which was designed to compensate airlines for direct losses incurred as a result of the Sept. 11 attacks as well as continued losses through Dec. 31, 2001, Frontier received an installment payment of $10.1 million from the Department of Transportation (DOT) on Sept. 21, which resulted in estimated cash available for operations of approximately $91.0 million as of Sept. 30, 2001. Frontier believes it will receive a second installment of approximately $10.0 million during its fiscal third quarter. Based upon the current booking trends and its anticipated forecasted sources and uses of cash, Frontier believes that it has adequate cash to execute its business plan.

The table below represents comparisons for September, the airline's second fiscal quarter, fiscal year-to-date and calendar year-to-date traffic results.

Frontier Airlines September Traffic Summary