CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 31, 2009
Frontier Airlines Holdings, Inc. (Exact name of registrant as specified in its charter)
Delaware
000-51890
20-4191157 (State of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
7001 Tower Road, Denver, Colorado
80249 (Address of principal executive offices)
(Zip Code)
720-374-4200 (Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operation and Financial Condition
On August 27, 2009, Frontier Airlines Holdings, Inc. filed its monthly operating report for the month of July 31, 2009, with the United States Bankruptcy Court for the Southern District of New York, in connection with its proceedings under Chapter 11 of the United States Bankruptcy Code in Case No. 08-11298 (RDD). A copy of the monthly operating report and the related press release is provided hereunder as Exhibits 99.01 and 99.02.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit 99.01 Monthly Operating Report for the month ended July 31, 2009.
Exhibit 99.02 Press Release dated August 27, 2009, entitled “Frontier Airlines Reports July Net Profit of $17.8 Million”
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRONTIER AIRLINES HOLDINGS, INC.
Date: August 27, 2009
By: /s/ Sean E. Menke
Its: President and CEO
EX-99.01
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
Debtors: Frontier Airlines Holdings, Inc., et al. (1) Case Number: Jointly Administered 08-11298 (RDD)
Monthly Operating Report for the Period: Month ended July 31, 2009
Debtors’ Address: 7001 Tower Road Denver, CO 80249
Monthly Operating Income: $17.8 million
Debtors’ Attorney: Damian Schaible Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 Telephone: (212) 450-4000 Fax : (212) 450-6501 Email: damian.schaible@dpw.com
Report Preparer: Frontier Airlines Holdings, Inc.
The undersigned, having reviewed the attached report and being familiar with the Debtors’ financial affairs, verifies under the penalty of perjury that the information contained therein is complete, accurate and truthful to the best of my knowledge. (2)
Date: August 27, 2009
/s/ Heather Iden
Heather Iden
Vice President Controller
(1)
See next page for a listing of Debtors by case number. (2)
All amounts herein are unaudited and subject to revision. The Debtors reserve all rights to revise this report.
FRONTIER AIRLINES HOLDINGS, INC., ET AL. MONTHLY OPERATING REPORT
(1) The Debtors in these jointly administered cases are as follows:
Debtor Name
Case Number Frontier Airlines, Inc.
08-11297 Frontier Airlines Holdings, Inc.
08-11298 Lynx Aviation, Inc.
08-11299
Case Number: 08-11298 (RDD) (Jointly Administered)
2
FRONTIER AIRLINES HOLDINGS, INC., ET AL. SCHEDULE OF DISBURSEMENTS
Debtor Name
Case Number
Disbursements for April 10, 2008 to April 30, 2008
Frontier Airlines, Inc. 08-11297 $ 112,115,631 $ 1,848,838,102 Frontier Airlines Holdings, Inc. 08-11298 $ – $ – Lynx Aviation, Inc. 08-11299 $ 4,864,656 $ 68,102,551
Case Number: 08-11298 (RDD) (Jointly Administered)
3
FRONTIER AIRLINES HOLDINGS, INC., ET AL. MONTHLY OPERATING REPORT INDEX Description
Page Condensed Consolidated Debtors-in-Possession Statement of Operations for the month ended July 31, 2009 and filing to date
5 Condensed Consolidated Debtors-in-Possession Balance Sheet as of July 31, 2009
6 Condensed Consolidated Debtors-in-Possession Statement of Cash Flows for the month ended July 31, 2009 and filing to date
7 Notes to the Condensed Consolidated Monthly Operating Report
9
Case Number: 08-11298 (RDD) (Jointly Administered)
4
FRONTIER AIRLINES HOLDINGS, INC., ET AL. MONTHLY OPERATING REPORT CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS
(In $U.S. 000’s)
Month Ended
Filing
July 31, 2009
To date
Revenues:
Passenger $ 104,762 1,546,247 Cargo 467 7,833 Other 8,330 85,205 Total revenues 113,559 1,639,285
Operating expenses:
Flight operations 13,032 212,144 Aircraft fuel 28,037 609,489 Aircraft lease 9,339 149,776 Aircraft and traffic servicing 14,871 235,123 Maintenance 5,319 109,917 Promotion and sales 10,136 135,449 General and administrative 5,039 74,222 Operating expenses – regional partner – 22,288 Loss (gain) on sales of assets, net (3 ) (8,536 ) Employee separation and other charges – 462 Depreciation 2,935 52,081 Total operating expenses 88,705 1,592,415
Operating income 24,854 46,870
Nonoperating income (expense):
Interest income 100 4,296 Interest expense (contractual interest expense was $41,103 from April 10, 2008 to July 31, 2009) (Note 2) (1,660 ) (35,036 ) Loss from early extinguishment of debt – (1,174 ) Other, net 58 (541 ) Total nonoperating expenses, net (1,502 ) (32,455 )
Income (loss) before reorganization items and income taxes 23,352 14,415
Cash and cash equivalents (Note 7) $ 67,779 Restricted cash and investments 170,015 Receivables, net of allowance 36,992 Prepaid expenses and other assets 25,053 Inventories, net of allowance 12,993 Assets held for sale 618 Total current assets 313,450
Property and equipment, net 565,313 Security and other deposits 27,376 Maintenance reserve deposits 133,390 Aircraft pre-delivery payments 7,835 Restricted investments 2,987 Deferred loan expenses and other assets 11,056 Total assets $ 1,061,407
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities not subject to compromise:
Current liabilities:
Accounts payable (Note 6) 45,671 Air traffic liability 150,859 Other accrued expenses 53,635 Deferred revenue and other current liabilities 13,558 Debtor-in-Possession financing (Note 8) 40,000 Total current liabilities not subject to compromise 303,723
Deferred revenue and other liabilities 17,578 Other long - term debt (post petition) 3,000 Total liabilities not subject to compromise 324,301
Liabilities subject to compromise (Note 5) 679,472 Total liabilities 1,003,773
Stockholders’ equity:
Preferred stock, no par value, authorized 1,000,000 shares; none issued – Common stock, no par value, stated value of $.001 per share, authorized 100,000,000 shares; 36,945,744 issued and outstanding 37 Additional paid-in capital 197,411 Cumulative effect of change in accounting principle 124,511 Accumulated deficit (264,325 ) Total stockholders’ equity 57,634 Total liabilities and stockholders’ equity $ 1,061,407
The accompanying notes are an integral part of the financial statements
Case Number: 08-11298 (RDD) (Jointly Administered)
6
FRONTIER AIRLINES HOLDINGS, INC., ET AL. MONTHLY OPERATING REPORT CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS
(In $U.S. 000’s)
Month Ended
Filing to
July 31, 2009
Date
Cash flows from operating activities:
Net income (loss) $ 17,762 (210,970 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
ESOP and stock option compensation expense 83 2,096 Depreciation and amortization 3,148 55,722 Assets beyond economic repair and reserve for inventories 46 1,783 Mark to market adjustments on derivative contracts (111 ) 19,115 Amounts paid for settled derivative contracts – (2,605 ) Gain on disposal of equipment and other assets, net (3 ) (8,536 ) Loss on early extinguishment of debt – 1,175 Reorganization items 5,486 222,926 Changes in operating assets and liabilities:
Restricted investments (8,974 ) (90,915 ) Receivables 480 16,369 Security and other deposits (1,105 ) (4,596 ) Maintenance reserve payments (2,064 ) (8,880 ) Prepaid expenses and other assets (5,107 ) 5,722 Inventories 394 2,333 Accounts payable 3,066 5,333 Air traffic liability (8,822 ) (82,599 ) Other accrued expenses and income tax payable 2,621 (16,900 ) Deferred revenue and other liabilities (985 ) (9,655 ) Net cash provided by (used in) operating activities 5,915 (103,082 )
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities (1,311 ) (17,709 )
Total net cash provided by (used in) operating activities 4,604 (120,791 )
Cash flows from investing activities:
Aircraft purchase deposits made (285 ) (8,569 ) Aircraft purchase deposits returned 16 11,620 Sale of short-term investment – 8,800 Proceeds from the sale of property and equipment and assets held for sale 25 59,777 Capital expenditures (680 ) (19,714 ) Proceeds from the sale of aircraft – reorganization – 214,296 Net cash provided by (used in) investing activities (924 ) 266,210
Case Number: 08-11298 (RDD) (Jointly Administered)
7
FRONTIER AIRLINES HOLDINGS, INC., ET AL. MONTHLY OPERATING REPORT CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS CONTINUED
(In $U.S. 000’s)
Month Ended
Filing to
July 31, 2009
Date
Cash flows from financing activities:
Proceeds from Debtor-in-Possession financing (post-petition) – 40,000 Extinguishment of long-term borrowings – (33,754 ) Principal payments on long-term borrowings (2,271 ) (42,658 ) Principal payments on short-term borrowings (3,000 ) (6,139 ) Payment of financing fees (31 ) (3,690 ) Extinguishment of long-term borrowings – reorganization – (138,655 ) Net cash used in financing activities (5,302 ) (184,896 )
Increase (decrease) in cash and cash equivalents (1,622 ) (39,477 ) Cash and cash equivalents at beginning of period 69,401 107,256 Cash and cash equivalents at end of period $ 67,779 67,779
The accompanying notes are an integral part of the financial statements.
Case Number: 08-11298 (RDD) (Jointly Administered)
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FRONTIER AIRLINES HOLDINGS, INC., ET AL. NOTES TO MONTHLY OPERATING REPORT
1. Background and Organization
General – Frontier Airlines Holdings, Inc. (“Frontier Holdings” or the “Company”) is an international airline carrier ranking as the second largest carrier out of Denver International Airport, with an average of 315 daily system-wide departures and arrivals.
Chapter 11 Reorganization Cases – On April 10, 2008 (the “Petition Date”), Frontier Holdings and its two subsidiaries (the “Debtors”) filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Court”). The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. On April 24, 2008, the Office of the United States Trustee for the Southern District of New York appointed a statutory committee of unsecured creditors.
2. Basis of Presentation
Condensed Consolidated Debtor-in-Possession Financial Statements – The unaudited financial statements and supplemental information contained herein represent the condensed consolidated financial information for the Debtors. The results of operations for the period from April 11 to April 30, 2008 were estimated based upon estimates that included the use of statistical data, processed revenue, fuel purchases, and a pro-ration of calendar days within the month of April. Amounts presented in the unaudited statement of cash flows for the period from April 11 to April 30, 2008 were estimated based on estimated asset and liability balances as of the filing date and actual balances as of April 30, 2008, as well as the aforementioned estimated results of operations for the period from April 11 to April 30, 2008.
In June 2008, the FASB issued EITF 08-3, "Accounting by Lessees for Maintenance Deposits", on the accounting for maintenance deposits under an arrangement accounted for as a lease. EITF 08-3 applies to the lessee’s accounting for maintenance deposits paid by a lessee under an arrangement accounted for as a lease that are refunded only if the lessee performs specified maintenance activities. EITF 08-3 requires that lessees continually evaluate whether it is probable that an amount on deposit with a lessor will be returned to reimburse the costs of the maintenance activities incurred by the lessee. When an amount on deposit is less than probable of being returned, it shall be recognized as additional expense. When the underlying maintenance is performed, the maintenance costs shall be expensed or capitalized in accordance with the lessee's maintenance accounting policy. EITF 08-3 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008, including interim periods within those fiscal years. Earlier application by an entity that has previously adopted an alternative accounting policy is not permitted. Prior to the adoption of EITF 08-3, the Company recorded its maintenance payments, or supplemental monthly payments under aircraft lease agreements, as an expense when paid.
The Company recognized the effect of the change as a change in accounting principle as of April 1, 2009, for all arrangements existing at this effective date, as an adjustment to the opening balance of retained earnings in the amount of $124.5 million. The cumulative effect adjustment is the difference between the amounts recognized in the statement of financial position before initial application of this Issue and the amounts recognized in the statement of financial position at initial application of this Issue.
American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (“SOP 90-7”), which is applicable to companies in chapter 11, generally does not change the manner in which financial statements are prepared. It does, however, require that the financial statements for periods subsequent to the filing of the chapter 11 petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. The Debtors’ financial statements contained herein have been prepared in accordance with the guidance in SOP 90-7. Further information concerning the Debtors’ accounting policies can be found in the footnotes to our Annual Report on Form 10-K for the period ended March 31, 2009 filed with the United States Securities and Exchange Commission.
Case Number: 08-11298 (RDD) (Jointly Administered)
9
The unaudited consolidated financial statements have been derived from the books and records of the Debtors. Certain financial information, however, has not been subject to procedures that typically would be applied to financial information presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and, upon the application of such procedures, the Debtors believe that the financial information will be subject to changes. These changes could be material. The information furnished in this report includes primarily normal recurring adjustments but does not include all of the adjustments that typically would be made for quarterly financial statements in accordance with U.S. GAAP. Certain prepaid balances and pre- and post-petition trade accounts payable balances are subject to further review and reclassification. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, this report should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the period ended March 31, 2009 filed with the United States Securities and Exchange Commission.
The results of operations contained herein are not necessarily indicative of results that may be expected from any other period or for the full year, and may not necessarily reflect the consolidated results of operations, financial position and cash flows of the Debtors in the future.
Case Number: 08-11298 (RDD) (Jointly Administered)
10
Intercompany Transactions – Intercompany transactions between Debtors have been eliminated in the financial statements contained herein.
Property and Equipment, net – Recorded at cost net of accumulated depreciation.
Reclassification of Prior Month Amounts - Certain prior month items have been reclassified to conform to the current month presentation.
Contractual Interest Expense – Contractual interest expense represents amounts due under the contractual terms of outstanding debt for the reporting periods, including debt subject to compromise for which interest expense is not recognized in the income statement in accordance with the provisions of SOP 90-7.
Taxes – The Debtor accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” and recognizes current and deferred income tax assets and liabilities based upon all events that have been recognized in the consolidated financial statements as measured by the enacted tax laws.
The Debtors have received approval to pay pre-petition employee withholding obligations in addition to employment and wage related taxes, sales and use taxes, and certain other taxes due in the normal course of business through certain first day motions. As such, the Debtors have paid such taxes when due.
Further, employee withholding obligations are pre-funded by the Debtors and paid directly by the Debtors’ payroll contractor, Automatic Data Processing, Inc. (“ADP”). Thus, no further information regarding taxes is included in this report.
3. Cash Management System & Use of Cash
The Court has entered an order authorizing the Debtors to continue to use their existing cash management system including: (i) investment guidelines; (ii) maintenance of existing bank accounts and business forms; and (iii) the authorization to open and close bank accounts. The Debtors are continuing to collect and disburse cash since the Petition Date using the existing cash management system.
Case Number: 08-11298 (RDD) (Jointly Administered)
11
4. Reorganization Items
SOP 90-7 requires separate disclosure of reorganization items such as realized gains and losses from the settlement of pre-petition liabilities, provisions for losses resulting from the reorganization and restructuring of the business, as well as professional fees directly related to the process of reorganizing the Debtors under Chapter 11. The Debtors’ reorganization items consist of the following:
(In $U.S. 000’s)
Month ended July 31, 2009
Filing to Date
Professional fees directly related to reorganization $ 2,033 28,777 Unsecured claims allowed by the court – 177,817 Loss on sale-leaseback transaction – 4,654 Write-off of debt issuance cost – 1,833 (Gain)/loss on the sale of aircraft (1) 3,453 575 Cost related to the early return and sale of aircraft – 2,418 Write-off of equipment note – 13,541 Gains on contract terminations and cure payment reductions, net – (7,662 ) Other – 973 Total reorganization items $ 5,486 222,926
Professional fees directly related to the reorganization (“Professional Fees”) include fees associated with advisors to the Debtors, the statutory committee of unsecured creditors and certain secured creditors. Other expenses are primarily related to gains and losses related to a plan to reduce capacity, gain/(loss) on contract terminations, unsecured claims allowed by the courts and penalty fees incurred during 1110 provisions of Bankruptcy. Professional Fees are estimated by the Debtors and will be reconciled to actual invoices when received.
(1)
Includes $6.9 million of accelerated depreciation for an A318 aircraft that the Company plans to sell in August 2009.
5. Liabilities Subject to Compromise
As a result of the Chapter 11 Filings, most pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise effect payment of pre-Chapter 11 liabilities are stayed. At hearings held in April 2008, the Court granted final approval of many of the Debtors’ “first day” motions covering, among other things, human capital obligations, supplier relations (including fuel supply and fuel contracts), insurance, customer relations, business operations, certain tax matters, cash management, utilities, case management and retention of professionals.
The Debtors may reject pre-petition executory contracts and unexpired leases with respect to the Debtors’ operations, with the approval of the Bankruptcy Court. Damages resulting from rejection of executory contracts and unexpired leases are generally treated as general unsecured claims and will be classified as liabilities subject to compromise. Holders of pre-petition claims were required to file proofs of claims by the bar date. The deadline for the filing of proofs of claims against the Debtors in this case was November 17, 2008.
A bar date is the date by which claims against the Debtors must be filed if the claimants wish to receive any distribution in the Chapter 11 cases. Differences between liability amounts estimated by the Debtors and claims filed by creditors will be investigated and, if necessary, the Court will make a final determination of the allowable claim. The determination of how liabilities will ultimately be treated cannot be made until the Court approves a Chapter 11 plan of reorganization. Accordingly, the ultimate amount or treatment of such liabilities is not determinable at this time.
Case Number: 08-11298 (RDD) (Jointly Administered)
12
SOP 90-7 requires pre-petition liabilities that are subject to compromise to be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. The amounts currently classified as liabilities subject to compromise may be subject to future adjustments depending on Court actions, further developments with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral securing such claims, or other events.
Liabilities subject to compromise consist of the following:
(In $U.S. 000’s)
July 31, 2009
Accounts payable and other accrued expenses $ 232,544 Accrued interest expense 2,879 Secured aircraft debt 352,049 Convertible bonds 92,000 Total liabilities subject to compromise $ 679,472
Liabilities subject to compromise includes trade accounts payable related to pre-petition purchases, all of which were scheduled for payment in the post-petition period. As a result, the cash flows from operations were favorably affected by the stay of payment related to these accounts payable.
6. Post-petition Accounts Payable
To the best of the Debtors’ knowledge, all undisputed post-petition accounts payable have been and are being paid under agreed-upon payment terms except for approximately $3.4 million of invoices received, not yet paid, as of July 31, 2009.
7. Passenger Facility Charges
Passenger Facility Charges (“PFC”) are assessed on the sale of tickets to end customers and are collected by the Company as an agent and remitted to the respective taxing authority. These taxes and fees are recorded as a liability until remitted to the respective taxing authority. As mandated by Federal Regulations for any air carrier that has filed for protection under chapter 11 of the Bankruptcy Code, the Company established a separate reserve account for these funds. The balances of collected PFC funds as of July 31, 2009 was $4.5 million and are included in cash and cash equivalents in the condensed and consolidated balance sheet.
8. Debtor-in-Possession (“DIP”) Financing
On March 20, 2009, the Bankruptcy Court approved an order authorizing a $40 million Amended and Restated DIP Credit Facility (“Amended DIP Credit Agreement”) with Republic Airways Holdings, Inc. The Bankruptcy Court also allowed the damage claim of Republic Airways Holdings, Inc. in the amount of $150 million arising from the Debtors’ rejection of the Airline Services Agreement with Republic Airlines, Inc. and Republic Airways Holdings, Inc. The allowance of this claim was a condition to Republic Airways Holdings, Inc. providing the Amended DIP Credit Agreement. The Company retired the existing $30 million DIP Credit Agreement on April 1, 2009.
9. Plan of reorganization
On June 22, 2009, the Company filed its proposed plan of reorganization and a related disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York. The Company also filed a motion to approve an investment agreement with Republic Airways Holdings, Inc. (“Republic”), subject to higher and better proposals under a court-supervised auction. On August 13, 2009, the Debtors concluded the auction and determined that Republic had submitted the highest and otherwise best proposal for the purchase of the Compnay. As part of the winning proposal, Republic agreed to waive recovery on its allowed $150.0 million unsecured claims increasing the potential recovery for the remaining unsecured claims. The Company entered into the Second Amended and Restated Investment Agreement with Republic on August 13, 2009. This revised Investment Agreement retains a purchase price of $108.8 million, with $28.8 million of the purchase price allocated to payment of the unsecured creditors. Under the revised Investment Agreement and the Debtors’ Plan of Reorganization, the Company’s current outstanding common stock will have no value and will be canceled. The confirmation hearing on the Plan of Reorganization is currently scheduled for September 10, 2009. Assuming the Plan of Reorganization is confirmed at that hearing, the Company expects to consummate the Plan and the Investment Agreement and emerge from Chapter 11 in September 2009. There can be no assurance at this time, however, that the Plan of Reorganization will be confirmed by the Bankruptcy Court, or that the plan will be implemented successfully.
Case Number: 08-11298 (RDD) (Jointly Administered)
Frontier Airlines, Inc. Frontier Center One 7001 Tower Road Denver, CO 80249 P 720.374.4200 F 720.374.4375 frontierairlines.com
Frontier Airlines Reports July Net Profit of $17.8 Million
Represents Ninth Consecutive Month of Operating Profit
DENVER (Aug. 27, 2009) –– Frontier Airlines Holdings, Inc. (OTC Bulletin Board: FRNTQ) today reported a net profit of $17.8 million for the month of July and its ninth consecutive monthly operating profit. The results were filed in the Company’s unaudited Monthly Operating Report for July 2009.
Frontier reported a consolidated operating profit of $24.9 million for the month of July 2009, compared to an operating income of $1.2 million for the same period in 2008, and a total consolidated net income of $17.8 million compared to a net loss of $3.2 million for July 2008. Excluding special items, the Company would have reported net income of $23.1 million, or a net margin of 20.4 percent in July 2009, compared to a net loss of $0.3 million, or a negative margin of 0.2 percent in 2008. Excluding special items, the operating profit for the month was $24.7 million versus an operating profit of $1.8 million in July 2008.
Special items for the month of July 2009 included:
§
$5.5 million of reorganization expense (which includes $3.4 million in accelerated depreciation for a planned aircraft sale), compared to $2.4 million in July 2008
§
Non-cash mark-to-market gains on fuel hedge contracts of $0.1 million
Operational results for the month of July 2009 included:
§
A 16.0 percent year-over-year mainline capacity reduction
§
Mainline unit cost excluding fuel (CASM ex-fuel) was 5.78 cents, compared to 5.74 cents in July 2008
§
Mainline total unit cost (CASM) was 8.58 cents, a 27.0 percent reduction compared to July 2008
§
Mainline passenger revenue (PRASM) was 10.33 cents, down 9.9 percent from the previous year
§
Mainline total unit revenue (RASM) was 11.26 cents, an 5.1 percent decrease from July 2008
“These results are absolutely outstanding,” said Frontier President and CEO Sean Menke. “Our financial performance in July and over the past nine months was possible because of our continuous focus on achieving the lowest cost structure in the industry, developing alternative revenue streams through our branded AirFairs program as well as the introduction of ancillary revenues and our constant attention to quality customer service. These results attracted two major investors to vie for ownership of our company and bring us out of bankruptcy. I am proud of the effort put forth by every Frontier and Lynx employee; our success wouldn’t have been possible without their tireless efforts.”
Frontier expects to emerge from bankruptcy in late September as a wholly-owned subsidiary of Republic Airways Holdings, Inc. (NASDAQ: RJET)
Companies in Chapter 11 bankruptcy protection are required to file monthly operating reports to the U.S. Trustee in addition to quarterly reports filed with the U.S. Securities and Exchange Commission.
A copy of the Monthly Operating Report is available at: FrontierAirlines.com/frontier/who-we-are/investor-relations/annual-reports-sec-filings.do
About Frontier Airlines Holdings, Inc.
Frontier Airlines Holdings, Inc. is the parent company of Denver-based Frontier Airlines. Currently in its 16th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. Frontier Airlines' mainline operations offer 24 channels of DIRECTV® service in every seatback along with a comfortable all-coach configuration. In conjunction with a fleet of 11 Bombardier Q400 aircraft operated by Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.), Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. In addition, Frontier and AirTran Airways operate a first-of-its-kind integrated marketing partnership that offers travelers the ability to reach more than 80 destinations across four countries with low fares, aboard two of the youngest fleets in the industry. For more in-depth information on Frontier Airlines, please visit its Web site at FrontierAirlines.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Statements contained in this press release that are not historical facts July be forward-looking statements as that item is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could result in actual results differing materially from expected results and represent the Company's expectations and beliefs concerning future events based on information available to the Company as of the date of this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that July arise after the date of this press release. Additional information regarding risk factors that July affect future performance at the Company are contained in the Company's SEC filings, including without limitation, the Company's Form 10-K for its fiscal year ended March 31, 2009.
SOURCE: Frontier Airlines Holdings, Inc. Web site: FrontierAirlines.com