Frontier to post loss

[Dizel8]

http://www.forbes.com/business/2005/03/29/cz_bn_0329frontier.html?partner=yahoo&referrer=

 

[F9 Driver]

Better than most...

http://biz.yahoo.com/ap/050324/frontier_upgrade_1.html



Associated Press
Frontier Upgraded by Goldman Sachs
Thursday March 24, 3:12 pm ET Frontier Upgraded by Goldman Sachs on Cost-Saving Measures, Western Route Trends

NEW YORK (AP) -- Goldman Sachs upgraded Frontier Airlines Inc. for the second time this year as it looks for the airline to post a profit in 2007 despite higher fuel prices.

Frontier shares were up $1.38, or 16 percent, to $9.89 in afternoon trading on more than triple its average trading volume after peaking at $10.41 in the morning.

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Goldman Sachs upgraded Denver-based Frontier to "Outperform" from "In-Line," following a Jan. 18 upgrade from "Underperform," based on the airline's trends toward positive cost and revenue leverage in 2006.

The investment firm said in a research note that Frontier's revenue will benefit in the spring and summer by exiting underperforming Los Angeles routes and gaining passengers from United Airlines as that airline swaps its mainline planes for regional jets in Denver.

Additionally, Goldman Sachs said that Frontier stands to save $5 million in training costs and $6 million in maintenance costs as it completes its transition to an all-Airbus fleet.

Goldman Sachs narrowed its loss per share estimates for Frontier to 25 cents from 29 cents for the March quarter, to 81 cents from 85 cents for 2005, and to 20 cents from 55 cents for 2006. The firm estimates 2005 revenue of $824.1 million and 2006 revenue of $931 million.

Analysts surveyed by Thomson First Call currently expect Frontier to post a loss of 73 cents a share on revenue of $799.8 million in 2005, and a loss of 42 cents a share on revenue of $851.8 million in 2006.

Goldman Sachs also predicts Frontier will be profitable in 2007, raising its outlook to 20 cents per share -- from a loss of 25 cents -- on revenue of $1.04 billion.

However, Goldman Sachs said limited airline seats on routes in the western United States fared well for all western route carriers faced with record fuel prices.

"Because capacity growth is relatively flat in the western U.S., airlines have more ability to push consumers into higher-priced buckets, particularly in periods of peak demand," said Goldman Sachs analyst Glenn Engel in a research note.

Based on this, the firm revised its first-quarter loss estimate for America West Holdings Corp. to 70 cents a share from $1 based on double-digit revenue gains expected from an Easter benefit. For 2005 and 2006, Goldman Sachs narrowed loss estimates to $2.50 a share from $2.95, and to 80 cents a share from $1.50, respectively.

Analysts estimate America West will post losses of 99 cents a share for the first quarter, $3.86 a share in 2005, and $1.63 a share in 2006. America West shares rose 4 cents to $5.07 in afternoon trading on the Nasdaq.

 

[Dizel8]

Oh, don't get me wrong, I hope Frontier prosper and sticks it to Ted!

 

[VABB]

Frontier Posts Loss



There's a shocker!!!!!!!

 

[FlyBoeingJets]

From the article at the top-

In the last five years, Frontier's share of seats in the Denver market has more than doubled to 20%, while United's has fallen to 54% from 70%. And by airline standards, Frontier has maintained a strong balance sheet: At last count it had $150 million in cash and debt equaling 54% of total capital, second among low-cost carriers after Southwest, at 25%.
Now Potter needs all the cushion he can get. When he kicked off Frontier's recent expansion, oil, which is used to make jet fuel, sold for $30 per barrel. Now it's at $55. Fuel accounts for 25% of Frontier's operating costs, and every penny-per-gallon increase costs it nearly $1.5 million annually.

Making matters worse, Frontier has only hedged less than 10% of its fuel purchases at $39 per barrel, according to a March 18 Merrill Lynch report. By comparison, Southwest is hedged on 85% of its fuel at $26 per barrel.


Very interesting. I wonder how Airtran and JetBlue stack up on the debt/capitol ratio.

The analysts have pushed the prediction of recovery to 2007. That is far out. A lot can happen between now and then.

 

[F9 Driver]

Merrill Lynch upgrades too...

http://finance.yahoo.com/q/ud?s=FRNT

Merrill Lynch thinks things are going to get better for F9 as UAL switches to more RJ flying out of DEN. Our stock is up over 11% this morning

Edit: added the following;

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh32198_2005-03-30_15-48-30_n30436955_newsml


Regional carrier Frontier, meanwhile, is benefiting from less competition from UAL Corp.'s (UALAQ.OB: Quote, Profile, Research) United Airlines in the Denver market, Linenberg said.

Frontier shares rallied last Thursday after Engel raised his rating on them to "outperform" from "in-line," citing the outlook for reduced competition in Denver, where Frontier has a hub.

Linenberg also lowered his loss forecast for America West Holdings Corp. (AWA.N: Quote, Profile, Research) to 65 cents a share from 90 cents, citing lower competition and its withdrawal from most transcontinental markets.