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Frontier Airlines Announces Record Profits
DENVER--(BUSINESS WIRE)--Nov. 3, 1998--Frontier Airlines (Nasdaq:FRNT news) today announced record earnings for both the quarter ended September 30,1998 and fiscal year to date.
The airline reported fiscal second quarter net income of $9.9 million, or $0.64 per fully diluted common share, a turnaround from the same period last year when the airline reported a net loss of $2.0 million. Net income was $10.3 million for the six-month period ended September 30, 1998.
Operating revenues increased 51.3 percent to $56.9 million for fiscal second quarter 1999, compared to $37.6 million for fiscal second quarter 1998. The airline's operating expenses during fiscal second quarter 1999 increased 18.0 percent to $47.1 million on increased capacity of 24.1 percent. ''To say we are pleased with our second quarter results would be an understatement,'' said Frontier President Sam Addoms. ''In addition to posting record net income results for the quarter and year to date, our second quarter net margin of 17.4 percent is a good indicator that Frontier's business plan is sound and
durable.''
Note differences from here on in!!!!!!
The airline filled a substantial portion of its second quarter increased capacity with a record high load factor of 63.7 percent, or an increase of 6.2 points from the same period last year. Total revenue per available seat mile (RASM) for the quarter increased to 9.33 cents from 7.66 cents. Total revenue per passenger mile (yield)
for the quarter increased to 14.66 cents from 13.33 cents.
Cost per available seat mile for the quarter decreased to 7.73 cents from 8.12 cents. Fuel cost savings were evident as fuel prices in the quarter declined to 56.4 cents from 71.0 cents from fiscal second quarter 1998. Cost per available seat mile net of fuel declined 1.6 percent from 6.92 cents in the airline's fiscal second quarter 1998
to 6.81 cents in the fiscal second quarter 1999.
''The 1.33 cent improvement in yield reflects strong seasonal summer demand, a modest growth in September traffic associated with the Northwest Airlines strike and Frontier's continued emphasis in gaining corporate customer acceptance and loyalty,'' Addoms continued.
Revenue enhancements impacting the quarter included:
o Improving schedule connectivity from 3.6 to 4.9 connections per
flight,
o Signing the 1000th corporate account,
o Re-entering the San Diego market on July 23 with two daily
round trips.
Cost reduction initiatives implemented during the quarter included:
o Increasing aircraft utilization from 9.89 hours to 10.27 hours,
or 3.8 percent,
o Bringing Denver International Airport under-the-wing operations
in-house, which is expected to realize a cost savings of
approximately $1 million annually,
o Full benefits associated with reduced insurance costs for hull
and liability insurance.
Milestones celebrated during the quarter included:
o Commencement of the airline's fifth year of operations on
July 5, 1998, and the subsequent proclamation of ''Frontier
Employees Day'' by the city of Denver,
o First anniversary serving Boston, September 16, 1998,
o Completion of three years serving Chicago/Midway,
September 25, 1998,
o Completion of three years serving Phoenix, September 25, 1998.
Addoms continued, ''We believe there are still meaningful opportunities to improve revenue and reduce costs. Later this week, we plan to announce three additional major markets. We also plan to take delivery of two new Boeing 737-300 jets in mid-December 1998, bringing our total fleet to 17. In addition, system growth will improve efficiencies at our hub airport operation in Denver, further enhancing
schedule connections while contributing to the economies of scale achievable through fleet expansion.''
Cash and cash equivalents and short-term investments on June 30, 1998 and September 30, 1998 were $14.2 million and $23.8 million, respectively, or an increase of 67.6 percent.
Noting the fortitude of the Frontier employee group, Addoms noted, ''Today's announcement demonstrates that Frontier has turned the corner in achieving profitability and helps position us for future economic fluctuations. The Frontier family can be proud of its accomplishments thus far and we are grateful to the 1,100 travel professionals who truly are Frontier Airlines. I am personally proud of every one of them.''
Denver-based Frontier Airlines commenced operations on July 5, 1994. The airline currently serves 16 cities coast to coast with a fleet of 15 Boeing 737 jets and employs approximately 1,100 travel professionals. Effective mid-December 1998, the airline will serve 19 cities with a fleet of 17 Boeing 737 jets. Frontier's website may be viewed at frontierairlines.com. |
