Justice Sirikah

Frontier Airlines Holdings, Inc. (OTCBB: FRNTQ) Shares Sees Steep Decline on Monthly Net Loss

by Justice Sirikah September 28, 2009
frontier_logo.jpgShares of Frontier Airlines Holdings, Inc. (FRNTQ.ob, or OTCBB: FRNTQ) which is due to exit from Chapter 11 protection on Thursday, saw a deep pullback of 59 percent in the last trading session, over the counter, as investors hit panic buttons on the company’s consolidated net loss of $2 million for the month of August.

  But in the same monthly financial report which is in accordance with the bankruptcy law, the airline said it ran up against stiff resistance from the weak economy and competitors and managed a hefty attributable operating profit of $10.2 million for the period. This reflects a big difference from net operating earnings of $3.3 million posted in the corresponding period of last year. Not counting special items, this year’s operating profit reached $11.9 million, in contrast to $3.4 million of August 2008.

  For the month, Frontier reported a total net loss of $2 million, citing reorganization charges of $10.5 million, without which the company would have struck a monthly income of $10.2 million, or a net margin of 10 percent. This year’s loss, however, contracted significantly from $5.6 million that was lost in 2008. Then again, without special items it could have netted a profit of $1.2 million, representing a margin of $0.9 percent.

  Meanwhile, the Denver-based firm which is also expected to become a subsidiary of Republic Airways Holdings (NASDAQ: RJET), but operating as a distinct entity, reported a 12.6 percent fall in passenger revenue in August, by comparison to the matching month of the year before.


  “It is impressive that, even with more than $10 million in expenses related to our bankruptcy case, double digit reduction in revenue due to the continuing weak economy and constant competitive pressure, we still managed a $10 million operating profit in August”, remarked Sean Menke, Frontier’s president and chief executive officer.

  Last week the airliner reported that it had successfully presented a reorganisation plan that came in keeping with the requirements of its creditors, even as prospects had seemed to be deeming. It had entered the bankruptcy protection in April, 2008, as its liquidity became vulnerable after First Data Corporation, its credit card processor, failed to release the profits from ticket sales.

  FRNTQ stock closed at $0.05 on Friday, from $0.13 the previous day. Even so, by midday on Monday, shares appeared to be on a rebound, trading a touch higher at $0.8.
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  Reference:
http://www.frontierairlines.com/frontier/home.do

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