Frontier Losing Ground

Revenue passenger miles increased 19.5 percent to 457,871,000 for September 2004 from the same period last year. Available seat miles increased 29.0 percent to 711,230,000 for September 2004 from the same period last year. This resulted in a load factor for September 2004 of 64.4 percent, a decrease of 5.1 points from September 2003, when the airline reported a load factor of 69.5 percent. The airline carried 468,009 passengers during September 2004, an 8.0 percent increase from September 2003. The airline reported passenger yield of 9.82 cents for the month of September 2004, a decrease of 11.8 percent from the same period last year. Its preliminary passenger revenue per available seat mile was 6.32 cents, down 1.42 cents or 18.3 percent from September 2003. :eek: :eek: :shock: :shock:
 
Entirely too much is being made of the load factor. They acquired new a/c a little faster than they gained passengers. I suppose UAL (or AA, or CO, or DL) never bought an a/c in advance of actual need. More important for the long term is that their revenue passenger miles grew by almost 20% year over year. Can any of the rest of us say the same?
 
Good to see you United boys over here on the little airline board. As you know F9 made a decision to expand based on the data available to them a couple of years ago. Would they have expanded by more than 40% this year if they knew what the fuel prices and competitive environment were going to be now? No. Are they taking the proper measures to rectify things? Yes. Don't worry about Frontier guys, they are very resilient and will adapt and prosper regardless of what the industry has to offer. Don't buy too much stock in LF look at a more important figure.. liquidity.
 
jimntx said:
Entirely too much is being made of the load factor. They acquired new a/c a little faster than they gained passengers.

Well, the decrease in load factor (in my humble opinion) isn't as worrisome as the 11.8% decline in yield. It's not a good sign that total passenger revenue was only up by 5% on 20% more traffic and nearly 30% more ASM's. If costs were comparable to their most recent quarter, their September operating margins were probably around -15% to -20%.

Now, Frontier's cash position is still good, thanks to a well-timed equity offering in 2003 and a good summer that same year. They're not likely to see profits until the second quarter of next year at the earliest. What will be worrisome is if they can't get revenues up enough to be profitable next summer.
 
Load factor in October is very high, although I am sure the yield remains weak. F9 will report a $16mm loss for the last quarter (I've been told), but their retrenching efforts should pay off in the current quarter. When the shake-out occuers in the industry, I think Frontier will be in a very good position to take advantage of their opportunities and continue their growth plan.
 
The problem with Frontiers yield is UAL's bankrupcty and their low fares. UAL and all of the other Chapter 11 carriers are dragging the airline industry into the toilet. The bankrupcty code needs to be changed to force these dying companies into Chapter 7 and let the healthy companies get back to business. :down:
 
Appnav,

Excellent post and clear understanding of rational business execution, unfortunately we are operating in a very irrational environment. I agree that Chapter 11 needs to be addressed specific to the airline industry. The healthy companies are being drug down by the mismanaged ones.

BTW, my guess for F9's loss was way off. They reported a very narrow loss due to special item write downs, otherwise they would have posted a profit.
 
C54Capt said:
Appnav,

Excellent post and clear understanding of rational business execution, unfortunately we are operating in a very irrational environment. I agree that Chapter 11 needs to be addressed specific to the airline industry. The healthy companies are being drug down by the mismanaged ones.

BTW, my guess for F9's loss was way off. They reported a very narrow loss due to special item write downs, otherwise they would have posted a profit.
[post="196100"][/post]​

I will also admit a large overestimate of the losses. The most glaring item was WRT fuel. it doesn't appear FRNT paid any more for fuel in Q2 than Q1, despite reported low levels of hedging. I'm also wondering what's going on after reported employee warnings from potter to expect very poor results.
 
:up: Not to BAD HUH BUS? It's going to be a great X-MAS. Just wish I could get on a plane to Disney world for X-MAS, but alas they'll be packed to the gills.

Why doesn't UAL post TED'S losses seperate from the main line. I'd sure like to see TED'S load factors??????

FLY, don't worry DEAR I AM STILL HERE :up:

appnavapp,

I agree with your post to, but I truly believe that the shake out of the airline industry is well on the way. And some of the big boys aren't going to survive the industry changes. Look at ATA for example they will be lucky to have enough assets left to MAYBE operate as a Government Contract carrier still. And we all know what is going to happen to USAIR!
 
Busdriver says "I'm also wondering what's going on after reported employee warnings from potter to expect very poor results." :shock:

Never heard Potter say anything like that BUS! Guess we aren't in as dire straights as you'd have hoped HUH? :rolleyes:

WE LOVE FRONTIER, A WHOLE DIFFERENT ANIMAL!!!!! :up:
 
HMMMMM, Let’s visit some past quotes OK!!!


Pineybob says, “What I've been hearing Frontier has one foot in the grave and the other on a banana peel too. Apparently TED has had some effect.â€

Please post TED’S losses and LF for the 3Q OK! Or is it already counted as part of the 270+ MIL UniTED lost????

“Frontier Airlines, Inc. reported a net loss of $6.6 million, or $0.18 per diluted common share, for the airline's fiscal first quarter ended June 30, 2004.â€

Big difference this quarter huh Piney?? 2.1M VS 6.6M, big difference and still have a VERY good balance sheet to weather the storm with to!

NOVAQT says, “Mrfish is so cock sure about F9's operations that he and his senior management are so caught up in competing that they don't recognize when to retrench when the balance sheet tells them to. Mrfish, you can stay too long doing what your are doing to stay competitive and watch you airline get into trouble. Be careful that F9 does not become the first LCC to fall out of favor.â€

Reality CHECK, 3Q results speak for themselves. F9 is not so financial cash strapped as you all hoped it was.

“Southwest is beginning to have trouble of their own.â€

REALLY, 119M profit for the 3Q, doesn’t sound like they are broke either.

“TED is making a dent in your markets. Customers like being able to link to the Star.â€

Post TED’S LF and losses for the 3Q PLEASE????? TED is just UniTED shuttle in
New livery. It is still the SAME OLD UniTED Air Lines.


Liveinahotel says, “The story regarding the financial situation at Frontier is very, very true! Even know UAL is having its issues they will do whatever it takes to make sure F9 goes down the tubes.â€

Reality, UniTED has been trying to put F9 out of business for 10+ years with NO success. When the dust settles in the UniTED camp we’ll see who REALLY goes down the tubes. With every passing day in BK the chances of UAL going down the tubes looks more and more likely.

“Frontier is having money troubles rather you admit to it or not. Just wait and see what happens to them over the next several months. The rabbits, bobcats and foxes will be jumping of the tails and running back to the wild.â€

Reality, since this post we have added three new additions the magnificent animal familyHere at F9. Two NEW 319’S and a NEW 318, doesn’t sound like they are jumping off the tails to me. They just keep popping up from EVERYWHERE!!!

C54Capt says, “As for UAL killing Frontier, I think it would be more accurate to say UAL is killing UAL.â€

NOW TALK ABOUT REALITY, THIS IS THE REAL REALITY!!!

Busdrvr posts, “Frontier Trims Flight Schedule by 13 Pct.â€

Reality, it turned out to be a pretty smart move with the over capacity in the industry and the flat revenues. Hence the 2.1M loss VS the 6.6M loss from the 2Q.

I can continue the quotes, but you all know now that your predictions for the doom and gloom at F9 turned into a fizzle, LOL.

Wait!!!! A few more quotes from UniTED management.

This is YOUR TRUE REALITY CHECK!

Executives said again in disclosing quarterly results that eliminating employee pension plans, which they still cite as likely, wouldn’t be enough to make United financially competitive with fares the lowest they've been in more than a decade. :shock:

"Even though our unit revenue performance was on par with our peers, the pricing environment prohibits us from recouping high fuel costs," said chief financial officer Jake Brace. "Given the urgency of United's situation and the stark financial reality in the entire industry, United believes that it will have no choice but to seek significant additional labor savings beyond terminating and replacing our pension plans." :shock:

United is working on a new business plan, expected to be disclosed in about a month, that it says will involve more than $1 billion in additional cost savings. In addition to cutting wages and benefits again, it also has been reported to be poised for as many as 6,000 job cuts from its work force of 62,000. :shock:

FACT, UAL’S Jake Brace says “We don’t have a plan the is financeable.†:shock:

REALITY, they are going to make the employees finance their plan (AGAIN) since they can’t find a financial institution crazy enough to back them with exit financing.

The company cited a "strong possibility" that it will fail to meet the requirements of its bankruptcy lenders in the fourth quarter.†:shock:

Reality, HUH OHHHHHHHHHHH! So to all who have bashed F9, who is truly in worse financial shape? Your apologies are accepted! :up: