High fuel costs and the heavy competition for Frontier Airlines at Denver International Airport from Southwest Airlines and United Airlines led the carrier to lose $7.9 million in the quarter that ended March 31.
The carrier’s financial performance worsened from the year-ago quarter, when it lost $3.7 million.
Frontier faced the challenge of airlines adding flights in Denver, “and Southwest coming into five of our markets,” said Frontier chief financial officer Paul Tate.
Southwest started selling flights out of Denver this year, with fares starting at $118 round trip to Phoenix and Las Vegas.
But United is an even bigger force behind the increased competition, after adding 32 daily flights out of Denver to its schedule in the first half of this year.
March also marked the end of Frontier’s fiscal year, for which the airline reported a $14 million loss. That’s narrower than its $23.4 million loss for 2005.
DIA, Frontier’s only hub, had one of the largest year-over-year increases in airline seats of the top 33 airports in the country in the March quarter, according to Frontier chief executive Jeff Potter. That competition keeps fare increases – and unit revenue increases – by Frontier and its competitors in Denver relatively small.
Potter said “the unique competitive nature of the Denver market isn’t likely to change in the near term,” but he expects this to be the busiest summer in the company’s history. Because of that, along with cost cuts, Potter expects Frontier to make a profit in the June quarter.
