Shares of Denver-based Frontier Airlines parent Frontier Airlines Holdings Inc. fell 5.7 percent Tuesday, down 36 cents to $5.96, after an analyst predicted the airline would lose money in its current fiscal year.
Raymond James & Associates Inc. said in a report Tuesday it expected Frontier to lose 30 cents per share in its 2007 fiscal year to end next March. The firm previously estimated that Frontier would earn 10 cents a share in fiscal 2007.
“Southwest is having a clear impact on the market and is unlikely to retreat,” according to the report by Raymond James analyst James Parker.
United also has added flights in Denver, and Frontier itself has grown its capacity here.
All contribute to “weaker pricing power in the face of rising fuel prices and the rolling off of Frontier’s remaining fuel hedges,” according to the report. “While Frontier has done an admirable job of controlling non-fuel unit costs, we are hard-pressed to envision meaningful profitability until the capacity situation in Denver changes significantly.”
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com.
