Frontier Airlines Holdings Group Inc. lowered its fiscal second-quarter earnings forecast, saying its profit may be as little as 1 cent a share compared with an earlier estimate of 10 cents.
Frontier Airlines’ parent blamed new airport security measures for lower traffic and revenue. Denver-based Frontier expects to earn 1 cent to 5 cents a share for the quarter ended Sept. 30, the low-cost carrier said today in a statement.
“Like the majority of the industry, we were not immune to the effects of the terrorist incident in early August, which clearly affected passenger travel primarily in the month of September,” Chief Executive Officer Jeff Potter said in the statement.
Frontier joined carriers including Continental Airlines Inc., US Airways Group Inc. and JetBlue Airways Corp. in blaming the new security restrictions for paring revenue last quarter. The others haven’t changed their earnings guidance.
Shares of Frontier shares fell 78 cents, or 8.8 percent, to $8.08 this morning in New York in Nasdaq Stock Market composite trading. That was the biggest decline since Jan. 17.
Frontier operates a hub at Denver International Airport serving primarily large western U.S. cities including Phoenix and Los Angeles. It’s also expanding flying to Cancun and other Mexican resort towns and building a new division to feed passengers from smaller cities into Denver.
The carrier previously said its fiscal second-quarter results would be “in line” with the 10 cents a share it earned for the quarter ended June 30. The new forecast excludes the impact of gains and losses from fuel hedging, which involves locking in fuel prices early to avoid unexpected swings.
Frontier was expected to earn 18 cents a share, the average estimate of seven analysts surveyed by I/B/E/S, a unit of Thomson Financial. Thomson doesn’t disclose what the estimates include.
The U.S. and U.K. tightened airport security Aug. 10 after U.K. authorities disrupted a terror plot to blow up aircraft using liquid bombs. The new restrictions included a ban on liquids and gels in carry-on bags, which damped some leisure travel, Frontier spokesman Joe Hodas said in an interview. The liquids ban was eased last week.
Bookings are improving in the quarter ending in December, and Frontier expects to post unit revenue gains over a year earlier, Potter said in the statement.
