Frontier, Midwest Post Quarterly Losses

Denver-based Frontier lost $2.7 million, or 8 cents per share, down from a loss of $6.6 million, or 18 cents per share, in the same period last year.


Frontier Airlines Inc. reported a net loss that was far narrower than analysts had expected, yet high fuel costs that have plagued the industry kept the discount carrier from profitability. Also Thursday, Milwaukee-based Midwest Air Group Inc. said its second-quarter loss more than doubled because of the persistently high fuel prices.

The parent of Midwest Airlines also said it faces delisting by the New York Stock Exchange.

Denver-based Frontier lost $2.7 million, or 8 cents per share, down from a loss of $6.6 million, or 18 cents per share, in the same period last year. The latest quarter's net loss included a charge of $3.3 million related to three Boeing 737s Frontier no longer uses and a $1 million unrealized loss on fuel hedges.

Without the charges, Frontier said it would have broken even for the quarter. Analysts surveyed by Thomson Financial had expected a loss of 12 cents per share.

Revenue for the latest quarter was $236.4 million, up from $192.4 million in the same period last year.

Frontier's revenue per available seat mile rose an industry-leading 15.6 percent, but the average fuel cost per gallon rose 42.3 percent year over year, CEO Jeff Potter said.

''Almost every indicator of our performance as an airline continues to show improvement with the exception of the one factor we cannot control: fuel,'' Potter said in a statement.

In a release Thursday, Midwest said the NYSE informed it that it does not comply with recently revised criteria for listing and has 45 days to file a new business plan and 180 days to implement it. The airline also said it is considering listing its shares on another stock exchange.

A company needs a market capitalization above $75 million for 30 days in a row to remain on the exchange, according to rules implemented this spring. At its closing share price Thursday, the company was valued at about $50 million.

Meanwhile, the carrier said it lost $8.2 million, or 47 cents a share, in the three months to June 30, compared with $3.5 million, or 20 cents a share, a year ago. The net loss included one-time items of 17 cents per share for engine overhauls and capital expense write-offs, bringing the operating loss to 30 cents per share _ 2 cents better than the mean estimate of analysts polled by Thomson Financial.

The group, which also operates regional carrier Skyway Airlines, said its revenue increased by 23 percent, to $131.6 million from $106.9 million. Passenger traffic rose 31 percent.

''In spite of high fuel prices, we believe we have made significant progress in our efforts to return to profitability,'' Chairman and CEO Timothy E. Hoeksema said in a statement.

Frontier shares rose 51 cents to close at $12.90 Thursday on the Nasdaq Stock Market, before the results were released. Midwest shares fell 24 cents, or nearly 8 percent, to close at $2.87 on the NYSE.

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