LAXintl
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F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 3:20 am

(For those wondering F9's fiscal year does not conform to traditional calender reporting periods)


Frontier's 4Q Loss Widens
Thursday May 24, 8:28 pm ET


DENVER (AP) -- Frontier Airlines said Thursday its fourth-quarter net loss widened as operations were buffeted by winter storms that forced flight delays and cancellations from its Denver hub.

The airline also saw fewer travelers as it flew more miles from January to March and, like its competitors, paid higher fuel costs. "This quarter was one of the toughest that we have faced financially," Chief Executive Officer Jeff Potter said a statement.

Demand has picked up ahead of the summer travel season, but Potter said company officials are concerned that fuel costs "remain at uncomfortably high levels."

For the quarter ended March 31, Frontier Airlines Holdings Inc. reported a net loss of $10.4 million, or 29 cents a share, compared with a net loss of $7.9 million, or 22 cents a share, in the same period a year ago.

http://biz.yahoo.com/ap/070524/earns_frontier.html?.v=1


Frontier Airlines Reports Fiscal Year 2007 Results
Thursday May 24, 6:30 pm ET


DENVER, May 24 /PRNewswire-FirstCall/ -- Frontier Airlines Holdings, Inc. (Nasdaq: FRNT - News) today reported a net loss of $20.4 million, or $0.56 per diluted common share, for its fiscal year ended March 31, 2007. This compares to a net loss of $14.0 million, or $0.39 per diluted common share for the year ended March 31, 2006.

http://biz.yahoo.com/prnews/070524/lath061.html?.v=97

[Edited 2007-05-25 20:37:08]
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mariner
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RE: F9 Announces Q4 And Full Year 2007 Losses

Sat May 26, 2007 3:31 am

Given that the winter storms accounted for $14 million to $15 million of that loss, and given that DEN fares are under siege - 5% lower than last summer - that ain't too bad.

I note from the conference call they are cautiously opimtistic about a profit this next quarter - unless oil goes crazy, of course.

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graphic
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RE: F9 Announces Q4 And Full Year 2007 Losses

Sat May 26, 2007 3:38 am

They took 3 or 4 good heavy winter storms at DEN this last winter so its really not surprising something like this would happen. They really need to grow outside DEN and not just liesure down in mexico...MEM anyone?
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 3:39 am

Quoting Graphic (Reply 2):
They really need to grow outside DEN and not just liesure down in mexico...MEM anyone?

Funny you should say that. I see that MEM-MCO goes to 2 x daily in December.  Smile

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 5:26 am

F9 converted this year from 2 RJs a day to three airbus flghts to Tucson. I hope these flights are doing well to maintain the service.
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 5:51 am

Quoting Mariner (Reply 3):

Have the MEM flights started yet? How are loads looking?
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futurecaptain
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 5:59 am

Ouch, bleeding more red ink.

Well, I'm flying them in 3 weeks, hopefully my money can help them out. I always liked Frontier, great airline with great service IMHO.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:06 am

Quoting Graphic (Reply 5):
Have the MEM flights started yet? How are loads looking?

The flights started earlier this month. I don't have access to proprietary load info, but from what I can tell, it's doing great.

This was confirmed by the CEO in the cc. He compared Memphs to Louisville - which was gangbusters out the gate. And, in addtion to the extra MEM-MCO, in November DEN-MEM goes to 3 x daily.

 Smile

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:11 am

Anybody been able to find a link or clip for a webpage for Lynx Aviation? I've trying to find something hopefully and have had no luck
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:20 am

Quoting Flyboy7974 (Reply 8):
Anybody been able to find a link or clip for a webpage for Lynx Aviation?

Don't think they'll have their own web site. It's just like most regionals do not have their own web site.

Currently, job postings for Lynx are on Career Builder, though.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:20 am

Quoting Flyboy7974 (Reply 8):
Anybody been able to find a link or clip for a webpage for Lynx Aviation? I've trying to find something hopefully and have had no luck

Frontier Holdings seems to really be keeping the whole Lynx operation close to the vest, even after their AOC has been given...wonder what that's all about, you'd think they'd have at least announced destinations by now since they'll be flying in what, a month and a half?

...Speaking of which, where are the planes?
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:33 am

Quoting Graphic (Reply 10):
.wonder what that's all about

Yes, they have the AOC from the DOT - but they do not have FAA approval, so they can't sell tickets, so there isn't much point in announcing the routes.

They have applied to the DOT for a waiver to be able to do so. It is thought that the routes will be announced within a week or two - depending on the DOT timetable.

http://dmses.dot.gov/docimages/p101/470112.pdf

mariner

[Edited 2007-05-25 23:45:09]
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worldtraveler
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:41 am

keep in mind that F9's fiscal 4Q is calendar 1Q07. There were weather issues in DEN this winter but the worst of it was in December which was not in this reporting period.

DEN is a simmering bloodbath which could turn very nasty very quickly if WN decides to turn up the heat.
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:49 am

Quoting WorldTraveler (Reply 12):
There were weather issues in DEN this winter but the worst of it was in December which was not in this reporting period.

Yes, sir, they were.

The majority of the $14/$15 million cost was in the January period, due to the rebookings and the hangover effect of the storms.

There was also an addtional effect - booking away to avoid DEN - which affected all the major carriers at DEN and lasted up until at least the end of February.

Quoting WorldTraveler (Reply 12):
DEN is a simmering bloodbath which could turn very nasty very quickly if WN decides to turn up the heat.

Southwest has already said (CEO Kelly) that DEN will only grow at a moderate pace. And the "heat" seems to be affecting United, which has seen DEN turn from its most profitable hub to its least - as per Mr. Tilton in their last quarterly report.

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LAXintl
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 6:54 am

One of the things with F9 is that while not posting huge losses, simply has not been able to get its head above the water line while many others in the industry have had the opportunity to report some rather improved earnings these last few years.
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ScottB
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 7:34 am

The one thing that concerns me a bit about the fiscal 4Q07 earnings is the way that the mark-to-market gains on hedges for future quarters are rolled into the 4Q operating numbers, rather than as non-operating gains. It's not that other airlines don't do the same -- US Airways, for example, does, though Southwest does not. Rather, they tend to distort the operating picture since the mark-to-market gains relate to business activities in future periods.

If you remove the mark-to-market gains on hedges maturing in the future, the operating loss for the quarter was closer to $21 million. (For what it's worth, this sort of accounting cuts both ways; if the price of crude/derivatives were to fall, you'd see mark-to-market losses for future periods in the operating numbers). But if you add back the unusual effects of the storms in Denver this weekend, they're probably level or slightly better than last year, which is very good news.

Quoting Laxintl (Reply 14):
One of the things with F9 is that while not posting huge losses, simply has not been able to get its head above the water line while many others in the industry have had the opportunity to report some rather improved earnings these last few years.

I think that's the big concern on Wall Street, and I think that's why FRNT is trading for only a small premium above book value. The company is holding its own and the losses aren't huge, but there aren't earnings to justify a better valuation, either. Frontier isn't really a good merger partner for anyone, either. Few if any of the legacies want a head-to-head hub competition with United at DEN, and the Airbus fleet isn't a match for LUV or AAI. I don't believe that Frontier's A318's & A319's are a match for JetBlue's strategy with the A320 & E190, while Spirit must get its own house in order (they're losing low-8-figures/quarter according to their financials filed with DOT).
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 7:51 am

Quoting Mariner (Reply 13):
And the "heat" seems to be affecting United, which has seen DEN turn from its most profitable hub to its least - as per Mr. Tilton in their last quarterly report.

If Tilton thinks that WN is the only reason they're loosing money at DEN, he really needs his head screwed on straight.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 8:35 am

Quoting Laxintl (Reply 14):
One of the things with F9 is that while not posting huge losses, simply has not been able to get its head above the water line while many others in the industry have had the opportunity to report some rather improved earnings these last few years.

There's a simple reason for that. It is the war at Denver.

The RMN reported last week that average air fares at DEN for this summer are 5% lower than last year - and last summer, DEN was one of the few major airports to see declining fares.

I think we know who might be the catalyst for that.  Smile

Still as CFO Tate said, Frontier has done what it can, and picked up some market share. In his words, if the others "enjoy" the situation at DEN, that's up to them.

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 8:54 am

Quoting ScottB (Reply 15):
Few if any of the legacies want a head-to-head hub competition with United at DEN, and the Airbus fleet isn't a match for LUV or AAI

Hmmm....an Airbi fleet. United should buy Frontier. United could rid itself of some of its its maintenance needy older aircraft and incorporate Frontier's younger fleet of Airbi (with the exception of the useless 318). Southwest and United appeal to different travelers. The two could coexist peacefully at DEN as they will at SFO
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 10:29 am

Quoting Bicoastal (Reply 18):

That would result in a public flogging of Jeff Potter in Larimer Square at high noon on a busy saturday.
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mkorpal
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 1:08 pm

This is not too good of news. I hope this next quarter is better.

As for Lynx, it was announced today that they will serve 4 mountain communities and 5 other cities. Not much there, but it's a start. Does anyone remember when the first Q400 is going to be delivered.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 1:15 pm

Quoting Mariner (Reply 1):
Given that the winter storms accounted for $14 million to $15 million of that loss, and given that DEN fares are under siege - 5% lower than last summer - that ain't too bad.

I personally fell that the writing is on the wall, so to speak, that Frontier is no longer viable as it currently operates.

The entrance of Southwest into their Denver hub will continue to be more and more devastating as Southwest ramps up service there. United will slug it out on price as well. Frontier just doesn't have the deep pockets that it will need to survive in the long run...IMHO. (After United's extremely poor financial performance the past couple of quarters, they may not have the deep pockets necessary to comepte with Southwest at Denver either).
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 1:57 pm

Quoting Jetdeltamsy (Reply 21):
The entrance of Southwest into their Denver hub will continue to be more and more devastating as Southwest ramps up service there.

I guess you haven't been following what has been happening with Southwest at Denver. Here's today's snippet - there are more:

http://cbs4denver.com/business/local_story_145135959.html

For the record, I just checked again and my statement about the Q4 storm costs is badly worded on my part. Of the $20 million annual loss, some $15 million is because of the storm. A further $3.5 million is attributable to Frontier Holdings and not to the airline.

Of the $10 million loss for the 4Q, it breaks up as nearly $4 million in additional storm (4Q) costs and $3.5 million in 4Q lost revenue - as in pax who didn't fly.

Meaning that without the storm, the 4Q loss would have been about $3 million, excluding any other special items.

Of the annual loss, over $3.5 million is attributable to Frontier Holdings, but not to Frontier Airlines - as capital costs for the start-up of Lynx.

Since the company is anticipating a positive Q1 - unless oil misbehaves - I am not sure what writing you are seeing on the wall.

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 7:01 pm

Quoting Jetdeltamsy (Reply 21):
After United's extremely poor financial performance the past couple of quarters, they may not have the deep pockets necessary to comepte with Southwest at Denver either).

Doesn't United have something like $3.0 Billion...yes with a B....cash on hand?
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 9:48 pm

Quoting Mariner (Reply 13):
The majority of the $14/$15 million cost was in the January period, due to the rebookings and the hangover effect of the storms.

your logic doesn't fly. if anything, people postponed their trips into the first of the year... UA and F9 were both still carrying pax into Jan that should have been carried over Christmas.

and lots of people claim bookaway but no one ever proves it. I say F9 is simply using weather as an excuse for their poor performance..... how many routes has F9 cancelled since the first of the year..... and their poor performance in SFO-LAX has been well documented.

WN never comes into a competitive market and just lets all the fists fly because they don't want the reputation of killing off the dominant airline. But you just have to look at PHL to see they will relentlessly grow and then everyone wakes up one morning and finds that they are a very large force. It will be no different in DEN.
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sat May 26, 2007 10:03 pm

i think that Southwest beginning to participate in Galileio/Appollo will help their situation in DEN since most agencies use that system.. But sitll , Frontier has much more loyalty in the local DEN market and I see real success coming from the Lynx operatin, though there will be startup costs involved,,,,be patient with Frontier!

I dont think WN will win every war they start! they are becoming more vulnerable all the time...Their entrance into the GDS in some ways is a desperate move as they have had a longstanding dislike for those distribtion sources!
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 5:00 am

Quoting WorldTraveler (Reply 24):
your logic doesn't fly. if anything, people postponed their trips into the first of the year... UA and F9 were both still carrying pax into Jan that should have been carried over Christmas.

It isn't my logic, I took the numbers directly from Frontier:

Quoting Mariner (Reply 22):
For the record, I just checked again and my statement about the Q4 storm costs is badly worded on my part. Of the $20 million annual loss, some $15 million is because of the storm. A further $3.5 million is attributable to Frontier Holdings and not to the airline.

Of the $10 million loss for the 4Q, it breaks up as nearly $4 million in additional storm (4Q) costs and $3.5 million in 4Q lost revenue - as in pax who didn't fly.

If you want to tell Frontier their logic doesn't fly, I'll happily supply you with the email address of the CFO.

Quoting WorldTraveler (Reply 24):
But you just have to look at PHL to see they will relentlessly grow

I have no doubt they will grow.

But, as the CEO said, it will be at a moderate pace. They have already declined to commit to any of the new gates to be built on Terminal C.

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 5:09 am

Quoting Jetdeltamsy (Reply 21):
I personally fell that the writing is on the wall, so to speak, that Frontier is no longer viable as it currently operates.

The entrance of Southwest into their Denver hub will continue to be more and more devastating as Southwest ramps up service there. United will slug it out on price as well. Frontier just doesn't have the deep pockets that it will need to survive in the long run...IMHO. (After United's extremely poor financial performance the past couple of quarters, they may not have the deep pockets necessary to comepte with Southwest at Denver either).

Everybody always feels that WN is invading their turf, and that the "writing is on the wall".

HP/US has managed fine against WN. HP/US has learned to "accept" WN, other than fight WN. Any airline that faces WN and tries to fight a battle is facing a losing battle. US learned the hard way with Metro Jet. WN is out to make money, not kill off airlines.

F9 is doing exactly the smartest thing an airline can do. They are snatching the Q400's, and flying into cities that WN can't get a 737 into. They are also expanding other markets, and looking at furhter international markets. They are testing, evaluating, and feeling around. The only writing on the wall is F9 getting back to profits. F9 picks and chooses its own battles.

Let's face it, fuel is the pain in the side right now. If fuel was half the price it is now, F9 would have squeezed a profit even with the storms.

Quoting Mariner (Reply 1):
Given that the winter storms accounted for $14 million to $15 million of that loss, and given that DEN fares are under siege - 5% lower than last summer - that ain't too bad.

I note from the conference call they are cautiously opimtistic about a profit this next quarter - unless oil goes crazy, of course.

mariner

I gotta agree with you on the loss. I actually expected a larger loss due to the storms. It was a rough year. F9 is faaaaaaar away from being in trouble. They have plenty of cash in the bank.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 5:51 am

Quoting Mkorpal (Reply 20):
As for Lynx, it was announced today that they will serve 4 mountain communities and 5 other cities. Not much there, but it's a start. Does anyone remember when the first Q400 is going to be delivered.

As we all know, one of those cities is BIL. That is all but confirmed by the fact that Lynx is hiring for people here in BIL.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 6:06 am

F9 could do well with some point to point domestic service I would think outside of the west coast. Not everyone wants to fly into Denver everytime they hop on one of their airplanes you know.
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 9:34 am

Let's see how this works.

What I have done is take the Q3 2005 passenger figures from the DOT and compared them to the results from 2006.

Some things we expected to see have come true.....fares have fallen, passenger traffic is way up.

When did they start and how much service did WN throw at Chicago-Denver? I recall they opened up PHX & LAS with a bang but I don't remember them throwing a multitude of flights at SLC & MDW from day one.

Anyhow...one surprise is WN has become the market share leader between Denver & Phoenix despite Frontier offering a lower average fare.

The folks who have taken it on the chin....have not so much been Frontier or United. The folks who have gotten burned by Southwest's presence at Denver have been USAirways/America West & Delta.

Between Salt Lake City and Denver...Delta has chopped their average fare back from $145 to $95 but still has dropped from 37% to 19% market share. For comparison purposes F9 has a 29.77% market share and WN has 29.73%.

Phoenix is interesting. WN is not the lowest average fare in the market, although their fare is low. They've captured 27.3% of that market with F9 and UA both hauling about 25% each. HP/US has really lost a significant amount of market share...from roughly 31% to 19% since WN has commenced service.

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 9:46 am

Interesting all the comments of "if only fuel prices." All airlines are using the same commodity. High fuel prices can't be used as an excuse. Some are making money, others aren't. Don't use oil prices as an excuse for your favorite airline not making money. It's how they deal with high oil prices that will separate a good airline from a soon to be history airline.
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dw9115
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 10:20 am

When will F9 announce the Lynx cities I thought they said by months end of May but no word yet and it doesn't look like they are going to announce them anytime soon. What gives?
 
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 10:21 am

Quoting Dw9115 (Reply 32):
When will F9 announce the Lynx cities I thought they said by months end of May but no word yet and it doesn't look like they are going to announce them anytime soon. What gives?

Lack of aircraft and more importantly, lack of certification.

...And didn't F9 announce a CR7 order along with the DH4s?

[Edited 2007-05-27 03:22:30]
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worldtraveler
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 10:23 am

Quoting Mariner (Reply 26):
They have already declined to commit to any of the new gates to be built on Terminal C.

If you're talking about WN in PHL, they are receiving 4 ex-DL gates this winter as part of DL's move.

Quoting F9Animal (Reply 27):
HP/US has managed fine against WN.

Let's see: BWI is a former hub, PIT is a former hub, WN is growing STEADILY and continuously in PHL. Given that WN isn't growing in HP markets as much as they are in US markets, HP is indeed holding its own. I would hardly call US successful against US.

Quoting Lexy (Reply 29):
F9 could do well with some point to point domestic service I would think outside of the west coast. Not everyone wants to fly into Denver everytime they hop on one of their airplanes you know.



Quoting Bicoastal (Reply 31):
Interesting all the comments of "if only fuel prices."

AMEN! It is what it is.

Quoting TxAgKuwait (Reply 30):
The folks who have taken it on the chin....have not so much been Frontier or United. The folks who have gotten burned by Southwest's presence at Denver have been USAirways/America West & Delta.

given that DL and US have both pulled capacity out of the domestic system, you need to look at their ASM changes in those particular markets to look at their results. And in DEN-SLC, UA lost12 points of market share so I'm not sure how you spin that as positive from a market share perspective.
 
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mariner
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 10:25 am

Quoting Bicoastal (Reply 31):
Interesting all the comments of "if only fuel prices."

That would probably be me. I think I'm the one who raised oil prices first.  Smile

Quoting Mariner (Reply 22):
Since the company is anticipating a positive Q1 - unless oil misbehaves - I am not sure what writing you are seeing on the wall.

And it is not an "excuse" - but it may be a reason.

Like Southwest, Frontier aggressively hedged when oil fell to $50 a few weeks ago. This helps, but budgets, even hedges, go out the window when oil - which is unpredicable - shoots back up to $66.

And, as I recall, it was United who based their financial predictions on oil at $50 when they came out of bk, and they have to deal with oil at $66 now. Which may be part of the reason they lost $152 million in the first quarter?

http://money.excite.com/jsp/nw/nwdt_...ap-d8onnsto0&feed=ap&date=20070425

A reason - not an "excuse". Just as the storms contributed to their financial position at Denver:

http://www.rockymountainnews.com/drm.../0,2777,DRMN_23912_5504886,00.html

A reason - not an excuse.

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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 10:28 am

Quoting WorldTraveler (Reply 34):
If you're talking about WN in PHL, they are receiving 4 ex-DL gates this winter as part of DL's move.

Why would I be talking about Southwest at PHL?

We were discussing Southwest at Denver. I know nothing of PHL.

Mr. Kelly has said they will not commit to any of the new gates to be built on Terminal C - at DEN.

He has aaid they will "take their chances" that gates will be available - if they need them.

Quoting Graphic (Reply 33):
And didn't F9 announce a CR7 order along with the DH4s?

No.

mariner

[Edited 2007-05-27 03:29:28]
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graphic
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RE: F9 Announces Q4 And Full Year 2006 Losses

Sun May 27, 2007 10:32 am

Quoting Mariner (Reply 36):
No.

mariner

Ok, I was probably thinking of the announcement that they were looking for to fly up to 20 70 seaters that eventually became Republic.
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