Frontier Airlines has reported a profit for only the second time since the company’s December 2003 quarter.
Frontier Airlines Holdings Inc. reported a $4 million profit, 10 cents per share, in the fiscal quarter that ended June 30.
That compares with a $2.7 million loss a year earlier, equivalent to 8 cents per share. Frontier also was profitable in the quarter that ended in September 2005.
Frontier’s financial performance and its stock price have been under pressure since Southwest Airlines announced last fall that it would fly to Denver and United Airlines emerged from bankruptcy and began expanding in Denver.
But Frontier chief executive Jeff Potter is optimistic for another quarter, at least, saying in a statement, “I am confident that we can sustain our profitability into the coming quarter, even with fuel at historical highs and an intensely competitive environment at our Denver hub.”
Revenues in the June quarter increased to $302.1 million, from $236.4 million a year ago. Operating expenses increased to $291.4 million, from $237.6 million a year ago.
Though increased competition has kept fares low, Frontier’s unit revenue, measured by revenue per available seat mile, increased 8.5 percent. Chief financial officer Paul Tate said he expects that to continue.
“Some of the pundits were saying we were just going to get killed with Southwest coming in here and United increasing its capacity, that our revenue was going to get wiped out, and clearly that hasn’t happened,” he said.
Frontier’s mainline fuel costs per gallon increased 29.7 percent year-over-year in the quarter. Its nonfuel unit costs declined by 6.1 percent.
Containing nonfuel costs was a large part of the success, according to Frontier. But those costs declined primarily because it incurred special expenses last year related to returning three Boeing planes.
In an effort to grow further outside of Denver, the airline started flying between Los Angeles and San Francisco in June. Tate said the new route has not had “immediate high load factors,” meaning planes were not very full. That was expected, he said. “We’re very patient about that.”
Frontier released its earnings after the market closed Thursday. Its shares closed at $6.41 Thursday, down 3 cents.
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com.
