Frontier Airlines didn't adapt as quickly as its executives hoped when Southwest Airlines entered the Denver market in January, Frontier CEO Jeff Potter said Friday.
But the Denver-based carrier is competing better heading into the summer, and Frontier should turn a profit in the current quarter - if fuel prices remain steady, executives said in a quarterly call to discuss financial results with analysts.
Frontier suffered double-digit unit revenue declines in five markets in which it competes with Southwest in the fiscal fourth quarter ended March 31, the chief executive said.
In April, revenue per available seat mile grew in two of the five markets compared with the same month last year. A third market should show year-over-year improvement this summer, Potter said.
"We didn't see the improvement as early as we had hoped," Potter said. "We are now finally seeing the results that we expected."
On Thursday, Frontier Airlines Holdings Inc. reported a net loss of $7.9 million, or 22 cents per share, for its fiscal fourth quarter, wider than a loss of $3.7 million, or 10 cents per share, for the same period a year earlier.
The latest results included one-time items that trimmed losses by a penny per share.
Frontier reported a $14 million loss, or 39 cents per share, for the fiscal year, narrower than a net lost of $23.5 million, or 66 cents per share, in fiscal 2005.
Year-end results included one-time items that boosted the net loss by 2 cents per share, the company said.
The consensus estimate of analysts surveyed by Thomson Financial was for a loss of only 18 cents per share for the quarter and a loss of only 25 cents per share for the year.
However, aviation industry consultant Mike Boyd of The Boyd Group called the results a "superb achievement" given skyrocketing fuel costs and competition from Southwest.
Revenue for the quarter was $252 million, up from $218 million a year ago. For the fiscal year, revenue was $994 million, up from almost $884 million.
This month, Frontier said it would add flights from Los Angeles to San Francisco in June. Executives said it was not another attempt to turn Los Angeles into a focus city that offers direct flights from someplace other than Denver, an idea the airline tried before and abandoned. Rather Frontier hopes to develop its presence in two critical West Coast markets, the airline said.
Internationally, the carrier flies to several destinations in Mexico and Canada.
Frontier shares rose 22 cents, or 3.6 percent, to close at $6.32 on the Nasdaq Stock Market.
Copyright: Associated Press WorldStream -- 5/29/06
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