Frontier Airlines reported one of the worst operating losses in the commercial airline industry for the second quarter of 2008, and came in second for the highest fuel expenses than any other low-cost carrier, according to Bureau and Transportation Statistics data released Monday.
The Denver-based airline — operating under Chapter 11 bankruptcy protection — logged a 12.2 percent operating loss in the second quarter — or $44 million — down from a profit of 0.5 percent in the second quarter in 2007.
Frontier’s loss ranked the airline No. 5 among seven low-cost carriers.
Low-cost rival
Southwest Airlines reported a 7.2 percent operating profit — or $205 million — in the second quarter, down from a 12 percent profit during the same time in 2007.
Denver’s largest carrier,
United Airlines, reported a 4.2 percent loss — or $223 million — compared to a 10 percent profit in the second quarter of 2007.
To boost profits, most U.S. carriers have implemented fees for checking luggage. In the second quarter, excess baggage fees brought the industry $182.6 million, up from $122 million in the first quarter and $113 million in the second quarter of last year.
The airlines began charging for checked baggage earlier this year in the face of increased fuel costs.
Frontier reported 42 percent of its operating costs went to fuel expenses in the second quarter. Frontier’s code share partner,
AirTran Airways, spent 49.1 percent of its operating costs on fuel.
Southwest Airlines, known for its strategic fuel hedging program, reported that 35.5 percent of its operating costs were spent on fuel.
United Airlines spent 33 percent of its operating budget on fuel — the highest of all major carriers.
US Airways spent the least at 27.8 percent.
Keep in mind Frontier could not hedge because they were in bankruptcy. So they are doing better than Airtran who did hedge fuel, just not well.
