DENVER, Jan. 24 /PRNewswire-FirstCall/ -- Frontier Airlines
Holdings, Inc. (NASDAQ:FRNT) today reported a consolidated net loss
of $32.5 million, or $0.89 per diluted share, for the Company's
third fiscal quarter ended December 31, 2007 compared to a
consolidated net loss of $14.4 million, or $0.39 per diluted share,
for the same period last year. Included in the consolidated net
loss for the quarter ended December 31, 2007 was a non-cash mark to
market derivative loss which increased fuel expense by $3.5
million. Also included in the net loss for the quarter ended
December 31, 2007 was $4.8 million of net start-up costs and losses
for Lynx Aviation; $0.4 million in accelerated depreciation for the
Airbus fleet seat replacement project; $0.4 million in employee
separation costs, and $0.3 million in early extinguishment of debt.
These increased costs were partially offset by a post-retirement
liability curtailment gain of $6.4 million. These items increased
the Company's net loss by $0.09 per share for the quarter ended
December 31, 2007. Included in the net loss for the quarter ended
December 31, 2006 were a non-cash mark to market derivative gain,
which decreased fuel expense by $1.4 million, and $0.9 million of
start-up costs for Lynx Aviation. These items, net of income taxes,
decreased the Company's net loss by $0.04 per share for the quarter
ended December 31, 2006. Chief Executive Officer's Comments
Frontier Airlines Holdings, Inc. President and CEO Sean Menke said,
"Regardless of the rise in fuel costs for the quarter or the delay
of Lynx Aviation's start-up, today's financial results are clearly
not acceptable. This loss is even more unbearable when it follows
one of the best quarters in our history. "The two primary drivers
for our loss were the 16.3 percent year-over-year increase in fuel
cost per gallon and losses from our regional fleet operation. To
some extent these losses were generated by sub-optimal scheduling
in our Mexico flights, both those originating in Denver as well as
from other cities in our network, and schedule adjustments required
to cover the delayed start-up of our Lynx service. The mainline
performance for the period saw good year-over-year improvements as
cost per available seat mile (CASM) excluding fuel declined 6.4
percent to 6.29 cents, and RASM increased 5.9 percent to 9.20 cents
on a year-over-year mainline capacity increase of 16.3 percent.
What is abundantly clear is that our performance in Denver has been
superior to other non-Denver opportunities. Even in the face of
significant competition we have, on a twelve trailing month basis,
been profitable in the aggregate on those routes where we compete
with our newest competitor. This is a testament to the quality of
our product and the excellent customer experience being provided by
our dedicated employees. "Shortly following my arrival in September
and the meteoric rise in fuel, we began an aggressive examination
of many aspects of our business. Our evaluation has encompassed our
network, cost structure, fleet composition, both mainline and
regional, and balance sheet. The result is that we have identified
many areas where we can, and will strive to improve our financial
performance on both the revenue and cost sides of the equation.
Network Adjustments "Throughout the December quarter, we began
making several network adjustments effective throughout our fiscal
fourth quarter to better align to our strengths. We implemented
more constrained day of week capacity deployment and reduced
capacity or eliminated service in several non-Denver domestic
markets, non-Denver point-to-point flying to Mexico, and red-eye
flying. These changes have resulted in a more modest year-over year
mainline growth rate of five to six percent for the March quarter
versus the originally scheduled 11 to 12 percent growth. For the
entire mainline and regional network, capacity growth has been
reduced from 18 to 20 percent to approximately 12 to 14 percent for
the March quarter. These changes are already having an impact on
our March quarter traffic and revenue performance, as we are seeing
good year-over-year improvements in load factor and unit revenue.
"Even though we have made many adjustments to our route network to
date, we have not fully optimized our opportunities. Looking beyond
the March quarter, we are finalizing more adjustments that will
further rationalize our network and leverage our position in
Colorado and the Western marketplace. Cost Structure "In addition
to the planning activities associated with our network changes in
the fiscal fourth quarter, we have also spent a significant amount
of time re-budgeting the quarter. Even though we have cut capacity
growth for the period, we are forecasting a mainline CASM excluding
fuel that is lower than both last year's mainline CASM excluding
fuel for the quarter, as well as the originally budgeted level
excluding fuel. Looking ahead to fiscal 2009, we are well aware
that our best opportunity to reach sustained profitability is to
operate an airline that continues to drive down our mainline CASM
excluding fuel. As we are in the midst of our fiscal budgeting
process, I am confident that we have identified the leverage points
necessary to drive down our mainline CASM excluding fuel on a year
over year basis. Capacity Growth, Fleet and Balance Sheet "For
fiscal 2009 we expect mainline capacity to grow at approximately 4
to 6 percent versus fiscal 2008. We are looking forward to the
delivery of our first Airbus A320 aircraft in the coming weeks and
the remainder of those aircraft throughout the next few years. The
first two A320s will operate between Denver and Ronald Reagan
Washington National Airport (DCA). Transitioning to the A320s on
this slot constrained route will allow us to add nearly 23 percent
capacity in this high demand market. "After a thorough fleet
analysis completed against a backdrop of wild fluctuations in the
price of fuel and the potential impacts of a slowing economy, we
have elected to sell four of our 22 owned Airbus aircraft. We have
begun marketing both the A318 and A319 aircraft and feel confident
that we should be able to close on these transactions in the next
few months, allowing us to slow our capacity growth and bolster our
cash position. In addition to changes to the mainline fleet, we are
finalizing our fleet requirements as it relates to our regional
operation. As we roll out future schedule enhancements, we will
provide more details on fleet composition and deployment within our
regional aircraft structure." Operating Highlights During the
quarter ended December 31, 2007, Frontier continued to provide
customers with one of the best completion percentages in the
industry, completing 99.65 percent of all domestic flights.
Frontier also remained among the industry leaders in on-time
performance, with 75.8 percent of all domestic flights arriving
within the Department of Transportation's (DOT) established on-time
criteria of within 14 minutes of scheduled arrival time. Mainline
passenger revenue increased 22.8 percent as mainline revenue
passenger miles (RPMs) grew at a rate of 25.3 percent during the
fiscal third quarter, while mainline capacity growth as measured by
mainline ASMs increased 16.3 percent from the same quarter last
year. As a result, the airline's mainline load factor was 76.7
percent for its fiscal third quarter of 2008, 5.5 load factor
points more than the mainline load factor of 71.2 percent during
the same quarter last year. The airline's mainline break-even load
factor, excluding special items, for the fiscal third quarter 2008
increased 4.2 load factor points from 77.2 percent in the fiscal
third quarter of 2007 to 81.4 percent. Mainline fuel cost per
gallon, excluding non-cash mark to market derivative losses, was
$2.50 during the quarter ended December 31, 2007, compared to $2.15
during the quarter ended December 31, 2006, an increase of 16.3
percent. The Company recently purchased fuel derivatives that hedge
both Gulf Coast jet crack spreads and West Texas Intermediate (WTI)
oil prices nominally over the next 15 months. The airline's
mainline CASM for the fiscal third quarter, excluding fuel, was
6.29 cents compared to 6.72 cents for the same quarter last year, a
decrease of 6.4 percent. Included in mainline CASM, excluding fuel,
for the quarter ended December 31, 2007 was $0.4 million in
accelerated depreciation for the Airbus fleet seat replacement
project; $0.4 million in employee separation costs, offset by a
post-retirement liability curtailment gain of $6.4 million. These
items decreased the Company's CASM by $0.18 for the quarter ended
December 31, 2007. Executive Vice President and Chief Financial
Officer Paul Tate discussed the airline's unit costs for the fiscal
third quarter stating, "Our CASM excluding fuel, excluding special
items, decreased 3.7 percent as a result of a 7.2 percent increase
in average stage length and is also a direct reflection of our
continued efforts to drive down controllable unit costs. We are
pleased we achieved this cost milestone despite a 5.9 percent
increase in unit revenue and associated passenger related costs."
The Company had unrestricted cash of $170.4 million and a working
capital deficit $78.8 million as of December 31, 2007. This
compares to the Company's unrestricted cash and working capital
deficit as of March 31, 2007 of $203.0 million and $18.9 million,
respectively. The Company's decrease in working capital of $59.9
million is primarily due to additional pre-delivery payments and
aircraft lease deposits of $24.3 million made for future aircraft
deliveries, an increase in the current portion of long-term debt of
$6.5 million as a result of additional debt for aircraft purchases,
capital expenditures of aircraft and other assets in excess of
financings, offset by cash provided by operations of $32.7 million.
The airline's mainline fleet in service on December 31, 2007
consisted of 22 owned Airbus A319 and A318 aircraft and 38 leased
Airbus A319 and A318 aircraft. Business developments during the
quarter included: -- Launched new subsidiary airline, Lynx
Aviation. -- Began new service to the first three Lynx Aviation
Q400 markets from Denver: Wichita, Sioux City and Rapid City. --
Announced a new heavy maintenance hangar facility will be
constructed in Colorado Springs, Colorado. -- Lynx Aviation took
delivery of six Bombardier Q400 aircraft, creating a fleet of eight
aircraft at the end of December 2007. -- Announced significant
route and schedule changes, adding capacity to 17 top performing
domestic markets to and from Denver while eliminating several
under-performing, non-Denver to Mexico routes as well non-stops
between Memphis and Orlando, Ft. Lauderdale and Las Vegas. -- Began
non-stop service between Denver and West Palm Beach as well as
between Denver and Frontier's fourth country, San Jose, Costa Rica.
Menke concluded, "I believe there is cause for cautious optimism.
We realize we may be seeing a new norm for fuel prices as well as a
potential economic downturn, that could adversely affect our
bookings. Nevertheless, we have also proven over the past few
months that we are willing to make the necessary decisions to steer
ourselves back towards sustained profits while continuing to
deliver a superior customer experience. What encourages me is that
we have a management team and an employee base that is aware of the
challenges that lie ahead, and are prepared to do whatever it takes
to come out on the other side of adversity as a stronger, more
successful company. We have had to make some very difficult
decisions, and there will be more to make moving forward. I
sincerely thank all of our employees for understanding and
embracing the changes while maintaining the cornerstone of this
Company -- our customer service. Regardless of what is happening
with fuel, the economy, or our quarterly earnings, I know we can
count on Frontier's 6,000 employees to deliver a product to our
customers that is incomparable in the industry." Senior leadership
will host a conference call to discuss Frontier's quarterly
earnings on January 25, 2008, at 9:00 a.m. Mountain Standard Time.
The call is available via the World Wide Web on the airline's Web
site at http://www.frontierairlines.com/ or using the following
URL: http://www.vcall.com/IC/CEPage.asp?ID=110633. About Frontier
Airlines Holdings, Inc. Frontier Airlines Holdings, Inc. is the
parent company of Denver-based Frontier Airlines. Currently in its
14th year of operations, Frontier Airlines is the second-largest
jet service carrier at Denver International Airport, employing
approximately 6,000 aviation professionals. With 60 aircraft and
one of the youngest Airbus fleets in North America, Frontier offers
24 channels of DIRECTV(R) service in every seatback along with a
comfortable all coach configuration. In conjunction with its
regional jet fleet, operated by Republic Airlines, and a fleet of
eight Bombardier Q-400 aircraft operated by Lynx Aviation (a
subsidiary of Frontier Airlines Holdings, Inc.), Frontier offers
routes linking its Denver hub to 63 destinations, including 53 U.S.
cities in 32 states spanning the nation from coast to coast; six
cities in Mexico; two cities in Canada and one in Costa Rica. In
November 2006, Frontier and AirTran announced a first-of-its-kind
integrated marketing partnership that offers travelers the ability
to reach more than 80 destinations across four countries with low
fares, aboard two of the youngest fleets in the industry. For more
in-depth information on Frontier Airlines, please visit its Web
site at http://www.frontierairlines.com/. Legal Notice Regarding
Forward-Looking Statements Statements contained in this press
release that are not historical facts, including certain statements
by Messrs. Menke and Tate and projections of future performance
regarding revenue, unit and other costs and other aspects of the
Company's business, may be considered forward-looking statements as
that item is defined in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are inherently subject to
risks and uncertainties that could cause actual results to differ
materially from these forward-looking statements. Many of these
risks and uncertainties cannot be predicted with accuracy and some
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: 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; failure of our new markets to perform
as anticipated; the inability to achieve a level of revenue through
fares sufficient to obtain profitability due to competition from
other air carriers and excess capacity in the markets we serve; the
inability to obtain sufficient gates at Denver International
Airport to accommodate the expansion of our operations; the
inability to successfully lease or build a new maintenance hanger
prior to a potential lease termination of our primary maintenance
hanger located at DIA that is currently on a month-to-month
sublease with Continental Airlines; general economic factors and
behavior of the fare-paying public and its potential impact on our
liquidity; terrorist attacks or other incidents that could cause
the public to question the safety and/or efficiency of air travel;
hurricanes and other natural forces and their impact on air
transportation and oil production; operational disruptions,
including weather; industry consolidation; the impact of labor
disputes; enhanced security requirements; changes in the
government's policy regarding relief or assistance to the airline
industry; the economic environment of the airline industry
generally; increased federal scrutiny of low-fare carriers
generally that may increase our operating costs or otherwise
adversely affect us; actions of airlines competing in our primary
markets, such as increasing capacity and pricing actions of United
Airlines, Southwest Airlines, and other competitors, particularly
in some of our Mexico destinations due to the increase in the
number of domestic airlines authorized to serve Mexican markets
from the U.S.; the availability of suitable aircraft, which may
inhibit our ability to achieve operating economies and implement
our business strategy; the unavailability of, or inability to
secure upon acceptable terms, debt or operating lease financing
necessary to acquire aircraft which we have ordered; uncertainties
regarding aviation fuel prices; inherent risks of entering into new
business strategies, such as the start-up Lynx Aviation, which uses
a different type of aircraft and will operate in different markets,
and issues related to operating efficiency and dependability of the
Q400 aircraft, a new regional jet partner, and various risk factors
to our business discussed elsewhere in this report. Because our
business, like that of the airline industry generally, is
characterized by high fixed costs relative to revenues, small
fluctuations in our revenue per available seat mile or cost per
available seat mile can significantly affect operating results.
Additional information regarding these and other factors may be
contained in our SEC filings, including without limitation, our
Form 10-K for the year ended March 31, 2007. These risks and
factors are not exclusive, and we undertake no obligation to update
or revise any forward-looking statements to reflect events or
circumstances that may arise after the date of this release. The
Company's filings are available from the Securities and Exchange
Commission or may be obtained through the Company's website at
http://www.frontierairlines.com/. -Financial Tables To Follow-
FRONTIER AIRLINES HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEET DATA (Unaudited) (IN THOUSANDS) December 31, March
31, 2007 2007 Balance Sheet Data : Cash and cash equivalents
$170,434 $202,981 Current assets $291,636 $340,405 Total assets
$1,126,748 $1,042,868 Current liabilities $370,481 $359,326
Long-term debt $537,236 $451,908 Total liabilities $933,176
$833,372 Stockholders' equity $193,572 $209,496 Working capital
(deficit) $(78,845) $(18,921) FRONTIER AIRLINES HOLDINGS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) FOR
THE THREE MONTHS AND NINE MONTHS ENDED DECEMBER 31, 2007 AND 2006
(in thousands, except per share data) Three Months Ended Nine
Months Ended December 31, December 31, December 31, December 31,
2007 2006 2007 2006 Revenues: Passenger $321,550 $260,505
$1,014,348 $859,049 Cargo 1,424 1,653 4,587 5,234 Other 10,935
9,095 32,711 24,248 Total revenues 333,909 271,253 1,051,646
888,531 Operating expenses: Flight operations 46,302 39,111 138,558
118,094 Aircraft fuel 117,493 81,593 329,578 273,457 Aircraft lease
29,253 27,553 85,831 80,761 Aircraft and traffic servicing 49,000
43,078 135,802 120,186 Maintenance 25,337 22,403 77,508 65,067
Promotion and sales 32,356 28,246 102,733 86,522 General and
administrative 15,907 12,657 45,934 41,370 Operating expenses -
regional partners 38,579 26,163 109,602 83,679 Post-retirement
liability curtailment gain (6,361) - (6,361) - Employee separation
and other charges (reversals) 442 - 442 (14) Gains on sales of
assets, net (4) (8) - (655) Depreciation 11,207 8,923 33,471 24,759
Total operating expenses 359,511 289,719 1,053,098 893,226 Business
interruption insurance proceeds - - 300 868 Operating income
(25,602) (18,466) (1,152) (3,827) Nonoperating income (expense):
Interest income 2,840 3,824 10,037 11,980 Interest expense (9,301)
(7,889) (26,939) (22,561) Loss on early extinguishment of debt
(283) - (283) - Other, net (162) (184) (337) (110) Total
nonoperating income (expense), net (6,906) (4,249) (17,522)
(10,691) Income before income taxes (32,508) (22,715) (18,674)
(14,518) Income tax benefit - (8,309) - (4,578) Net loss $ (32,508)
$(14,406) $(18,674) $ (9,940) Loss per share: Basic and diluted
$(0.89) $(0.39) $(0.51) $(0.27) Weighted average shares of common
stock outstanding Basic and diluted 36,642 36,617 36,639 36,602
FRONTIER AIRLINES HOLDINGS, INC. AND SUBSIDIARIES COMPARATIVE
CONSOLIDATED OPERATING STATISTICS (1) (unaudited) Three Months
Ended Nine Months Ended December 31, December 31, 2007 2006 Change
2007 2006 Change Selected Operating Data - Mainline: Passenger
revenue (000s) $292,251 $237,912 22.8% $923,299 $783,996 17.8%
Revenue passengers carried (000s) 2,521 2,086 20.9% 8,145 6,918
17.7% Revenue passenger miles (RPMs) (000s) 2,404,926 1,919,890
25.3% 7,734,437 6,443,388 20.0% Available seat miles (ASMs) (000s)
3,133,507 2,694,959 16.3% 9,551,889 8,373,036 14.1% Passenger load
factor 76.7% 71.2% 5.5 pts. 81.0% 77.0% 4.0 pts. Break-even load
factor (2) 81.4% 77.2% 4.2 pts. 79.6% 77.2% 2.4 pts. Block hours
66,023 56,761 16.3% 199,026 173,382 14.8% Departures 25,803 23,644
9.1% 79,779 72,431 10.1% Average seats per departure 128.9 129.7
(0.6%) 128.9 129.6 (0.5%) Average stage length 942 879 7.2% 929 892
4.1% Average length of haul 954 920 3.7% 950 931 2.0% Average daily
block hour utilization 12.0 11.2 7.1% 12.2 11.8 3.4% Passenger
yield per RPM (cents) (3), (4) 11.99 12.20 (1.7%) 11.83 12.05
(1.8%) Total yield per RPM (cents) (4) 12.67 12.95 (2.2%) 12.42
12.63 (1.7%) Passenger yield per ASM (RASM) (cents) (4) 9.20 8.69
5.9% 9.58 9.28 3.2% Total yield per ASM (cents) (4) 9.72 9.23 5.3%
10.06 9.72 3.5% Cost per ASM (cents) (CASM) 10.00 9.75 2.6% 9.75
9.65 1.0% Fuel expense per ASM (cents) 3.71 3.03 22.4% 3.44 3.27
5.2% Cost per ASM excluding fuel (cents) (5) 6.29 6.72 (6.4%) 6.31
6.38 (1.1%) Average fare $104.16 $101.68 2.4% $102.97 $ 102.76 0.2%
Average aircraft in service 60.0 55.0 9.1% 59.5 53.5 11.2% Aircraft
in service at end of period 60 55 9.1% 60 55 9.1% Average age of
aircraft at end of period (years) 3.8 3.1 22.6% 3.8 3.1 22.6%
Average fuel cost per gallon - GAAP $2.58 $2.12 21.7% $2.37 $2.28
3.9% Average fuel cost per gallon - excluding non-cash mark to
market hedging (6) $2.50 $2.15 16.3% $2.33 $2.26 3.1% Fuel gallons
consumed (000s) 45,103 38,535 17.0% 138,617 119,935 15.6% FRONTIER
AIRLINES HOLDINGS, INC. AND SUBSIDIARIES Comparative operating
statistics (unaudited) Continued Three Months Ended Nine Months
Ended December 31, December 31, 2007 2006 Change 2007 2006 Change
Selected Operating Data - Regional Partners: Passenger revenue
(000s) $26,640 $22,593 17.9% $88,390 $75,053 17.8% Revenue
passengers carried (000s) 270 215 25.6% 890 720 23.6% Revenue
passenger miles (RPMs) (000s) 187,538 140,401 33.6% 575,934 457,635
25.9% Available seat miles (ASMs) (000s) 268,381 203,705 31.7%
781,371 619,229 26.2% Passenger load factor 69.9% 68.9% 1.0 pts.
73.7% 73.9% (0.2) pts. Passenger yield per RPM (cents) 14.21 16.09
(11.7%) 15.35 16.40 (6.4%) Passenger yield per ASM (cents) 9.93
11.09 (10.5%) 11.31 12.12 (6.7%) Cost per ASM (cents) (CASM) 14.37
12.84 11.9% 14.03 13.51 3.8% Average fare $98.82 $105.31 (6.2%)
$99.29 $104.19 (4.7%) Aircraft in service at end of period 10 9
11.1% 10 9 11.1% Three Months Ended Nine Months Ended December 31,
December 31, 2007 2006 Change 2007 2006 Change Selected Operating
Data - Lynx Aviation: Passenger revenue (000s) $2,659 - NM $2,659 -
NM Revenue passengers carried (000s) 31 - NM 31 - NM Revenue
passenger miles (RPMs) (000s) 13,641 - NM 13,641 - NM Available
seat miles (ASMs) (000s) 21,496 - NM 21,496 - NM Passenger load
factor 63.5% - NM 63.5% - NM Passenger yield per RPM (cents) 19.49
- NM 19.49 - NM Passenger yield per ASM (cents) 12.37 - NM 12.37 -
NM Cost per ASM (cents) (CASM) 19.05 - NM 19.05 - NM Average fare
$85.42 - NM $85.42 - NM Aircraft in service at end of period 6 - NM
6 - NM Three Months Ended Nine Months Ended December 31, December
31, 2007 2006 Change 2007 2006 Change Selected Operating Data -
Combined: Passenger revenue (000s) $321,550 $260,505 23.4%
$1,014,348 $859,049 18.1% Revenue passengers carried (000s) 2,822
2,301 22.6% 9,066 7,638 18.7% Revenue passenger miles (RPMs) (000s)
2,606,105 2,060,291 26.5% 8,324,012 6,901,023 20.6% Available seat
miles (ASMs) (000s) 3,423,384 2,898,664 18.1% 10,354,756 8,992,265
15.2% Passenger load factor 76.1% 71.1% 5.0 pts. 80.4% 76.7% 3.7
pts. Passenger yield per RPM (cents) (3) 12.19 12.47 (2.2%) 12.08
12.34 (2.1%) Total yield per RPM (cents) 12.81 13.17 (2.7%) 12.63
12.88 (1.9%) Yield per ASM (cents) 9.28 8.86 4.7% 9.71 9.47 2.5%
Total yield per ASM (cents) 9.75 9.36 4.2% 10.16 9.88 2.8% Cost per
ASM (cents) 10.40 9.96 4.4% 10.09 9.91 1.8% NM = Not meaningful. 1.
The following table provides certain of our financial and operating
data for the three and nine months ended December 31, 2007 and
2006. Mainline and combined data exclude the expenses of Lynx
Aviation prior to receiving FAA approval to fly. The start-up costs
excluded were $3,396,000 and $8,454,000 for three and nine months
ended December 31, 2007, respectively, and $920,000 and $1,677,000
for the three and nine months ended December 31, 2006,
respectively. Lynx Aviation began revenue service on December 7,
2007. The results of Lynx Aviation during the quarter ended
December 31, 2007 are not indicative of future results due to the
fact that the fleet was flown in sub-optimal routes, additional
crew were required for training and we had low completion factors.
The costs of operations for the month of December 2007 were
$4,096,000. 2. "Break-even load factor" is the passenger load
factor that will result in operating revenues being equal to
operating expenses, net of certain adjustments, assuming constant
yield per RPM and no change in ASMs. Break-even load factor as
presented above may be deemed a non-GAAP financial measure under
regulations issued by the Securities and Exchange Commission. We
believe that presentation of break-even load factor calculated
after certain adjustments is useful to investors because the
elimination of special or unusual items allows a meaningful
period-to-period comparison. Furthermore, in preparing operating
plans and forecasts we rely on an analysis of break-even load
factor exclusive of these special and unusual items. Our
presentation of non-GAAP results should not be viewed as a
substitute for our financial or statistical results based on GAAP,
and other airlines may not necessarily compute break-even load
factor in a manner that is consistent with our computation. A
reconciliation of the components of the calculation of mainline
break-even load factor is as follows: Three months Ended Nine
Months Ended December 31, December 31, 2007 2006 2007 2006 (In
thousands) (In thousands) Net loss $32,508 $14,406 $18,674 $9,940
Income tax benefit - 8,309 - 4,578 Passenger revenue - Mainline
292,251 237,912 923,299 783,996 Passenger revenue - Regional
Partners 26,640 22,593 88,390 75,053 Passenger revenue - Lynx
Aviation 2,659 - 2,659 - Lynx Aviation start-up expenses (7,492)
(920) (12,550) (1,677) Charter revenue (3,945) (3,688) (8,440)
(7,293) Operating expenses - Regional partners (38,579) (26,163)
(109,602) (83,679) Passenger revenue - mainline (excluding charter)
required to break even (based on GAAP amounts) $304,042 $252,449
$902,430 $780,918 Non-GAAP adjustments: Employee separation and
other charges (442) - (442) 14 Post-retirement liability
curtailment 6,361 - 6,361 - Gains on sales of assets 4 8 - 655 Loss
on early extinguishment of debt (285) - (285) - Accelerated
depreciation on aircraft seats (354) - (3,228) - Non-cash mark to
market derivative gain (loss) (3,535) 1,394 (5,712) (2,306)
Passenger revenue - mainline (excluding charter) required to
break-even (based on adjusted amounts) $305,791 $253,851 $899,124
$779,281 Three months Ended Nine Months Ended December 31, December
31, 2007 2006 2007 2006 (In thousands) (In thousands) Calculation
of mainline break-even load factor using GAAP amounts: Passenger
revenue- mainline (excluding charter)required to break even (based
on GAAP amounts) ($000s) $304,042 $252,449 $902,430 $780,918
Mainline yield per RPM (cents) 11.99 12.20 11.83 12.05 Mainline
revenue passenger miles (000s) to break even assuming constant
yield per RPM 2,535,796 2,069,254 7,628,318 6,480,647 Mainline
available seat miles (000s) 3,133,507 2,694,959 9,551,889 8,373,036
Mainline break-even load factor using GAAP amounts 80.9% 76.8%
79.9% 77.4% Calculation of mainline break-even load factor using
Non-GAAP amounts: Passenger revenue (excluding charter and regional
partner revenue) required to break even (based on adjusted amounts)
($000s) $305,791 $253,851 $899,124 $779,281 Mainline yield per RPM
(cents) 11.99 12.20 11.83 12.05 Mainline revenue passenger miles
(000s) to break even assuming constant yield per RPM 2,550,384
2,080,746 7,600,372 6,467,062 Mainline available seat miles (000s)
3,133,507 2,694,959 9,551,889 8,373,036 Mainline break-even load
factor using non-GAAP amounts 81.4% 77.2% 79.6% 77.2% 3. "Passenger
yield per RPM" is determined by dividing passenger revenues
(excluding charter revenue) by revenue passenger miles. 4. For
purposes of these yield calculations, charter revenue is excluded
from passenger revenue. These figures may be deemed non-GAAP
financial measures under regulations issued by the Securities and
Exchange Commission. We believe that presentation of yield
excluding charter revenue is useful to investors because charter
flights are not included in RPMs or ASMs. Furthermore, in preparing
operating plans and forecasts, we rely on an analysis of yield
exclusive of charter revenue. Our presentation of non-GAAP
financial measures should not be viewed as a substitute for our
financial or statistical results based on GAAP. The calculation of
mainline passenger revenue excluding charter revenue is as follows:
Quarters Ended Nine Months Ended December 31, December 31, 2007
2006 2007 2006 (In thousands) (In thousands) Passenger revenues -
as reported $321,550 $260,505 $1,014,348 $859,049 Less: Passenger
revenues - Regional Partners 26,640 22,593 88,390 75,053 Less:
Passenger revenues - Lynx Aviation 2,659 - 2,659 - Passenger
revenue - mainline service 292,251 237,912 923,299 783,996 Less:
charter revenue 3,945 3,688 8,440 7,293 Passenger revenues -
mainline (excluding charter, Regional Partners and Lynx Aviation )
288,306 234,224 914,859 776,703 Add: Passenger revenues - Regional
Partners 26,640 22,593 88,390 75,053 Add: Passenger revenues - Lynx
Aviation 2,659 - 2,659 - Passenger revenues, system combined
$317,605 $256,817 $1,005,908 $851,756 5. This may be deemed a
non-GAAP financial measure under regulations issued by the
Securities and Exchange Commission. We believe the presentation of
financial information excluding fuel expense is useful to investors
because we believe that fuel expense tends to fluctuate more than
other operating expenses, it facilitates comparison of results of
operations between current and past periods and enables investors
to better forecast future trends in our operations. Furthermore, in
preparing operating plans and forecasts, we rely, in part, on
trends in our historical results of operations excluding fuel
expense. However, our presentation of non-GAAP financial measures
should not be viewed as a substitute for our financial results
determined in accordance with GAAP. 6. "Average fuel cost per
gallon" excludes non-cash mark to market derivative losses of
$3,535,000 and $5,712,000 for the three and nine months ended
December 31, 2007, respectively. Average fuel cost per gallon for
the three and nine months ended December 31, 2006 excludes a
non-cash mark to market derivative gain of $1,394,000 and a
non-cash mark to market derivative loss of $2,306,000,
respectively. DATASOURCE: Frontier Airlines Holdings, Inc. CONTACT:
Joe Hodas of Frontier Airlines Holdings, Inc., +1-720-374-4504, Web
site: http://www.frontierairlines.com/
Copyright
Frontier Airlines Hldgs (MM) (NASDAQ:FRNT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Frontier Airlines Hldgs (MM) (NASDAQ:FRNT)
Historical Stock Chart
From Jul 2023 to Jul 2024