Original Source: FD (FAIR DISCLOSURE) WIRE
. Jeff Potter, Frontier Airlines, Inc., President & CEO . Paul Tate, Frontier Airlines, Inc., SVP & CFO . Sean Menke, Frontier Airlines, Inc., SVP, Marketing & Planning & COO . Ann Block [phonetic], Frontier Airlines, Inc., SVP, Human Resources & Flight Services
. Greg Aretakis, Frontier Airlines, Inc., VP, Planning & Revenue
Management . Ron McClellan [phonetic], Frontier Airlines, Inc., VP, Maintenance & Engineering . David Sislowski, Frontier Airlines, Inc., General Counsel & VP, Administration
FRNT reported 3Q05 net loss of $8.6m or $0.24 per common share, excluding special items. CASM, excluding fuel, was down 6% vs. 3Q04. Capacity or ASMs was up 24.9% vs. 3Q04 with passenger traffic or RPMs up 23.4%. The load factor was 71.7%. The most significant challenge is ongoing high fuel prices. FRNT expects to be back to a single fleet type in April, four months ahead of plan. Q&A Focus: FY06 outlook, fleet activity, labor, fuel and other costs.
A. Key Data From Call 1. Net Loss: $8.6m or $0.24 per common share.
2. Unrestricted Cash (including short term investments): $149m. 3. Net Cash Burn from Operations: $6.4m. 4. Capex: $5.3m. 5. Long Term Debt Payments: $4.6m. 6. Sale of Parts & Fixed Assets: $6.4m.
S1. Company Overview (J.P.) 1. Highlights: 1. Net loss $8.6m or $0.24 per common share, excluding special items. 2. Continue to make strides in unit costs. 1. CASM, excluding fuel, down 6% vs. 3Q04. 1. Achieved while flying lower utilization than planned due to upcoming completion of fleet transition. 2. Lower utilization planned to extend into March quarter; expect to return to normalized levels in June quarter. 3. Capacity or ASMs up 24.9% vs. 3Q04. 4. Passenger traffic or RPMs up 23.4%. 5. Load factor 71.7% vs. 72.5% in 3Q04. 6. Most significant challenge was ongoing high fuel prices.
1. Fuel cost per gallon up 51% vs. 3Q04. 2. In revenue environment, yield down 7.6%. 3. High fuel costs and inability to offset increase single biggest factor in loss this quarter. 7. Decline in yield primarily related to increase in passenger length of haul.
1. Avg. fare declined less than 1%. 8. Took delivery of one new Airbus 8319 and one new Airbus 8318. 1. Retired Boeing 737. 2. Net increase of one aircraft; fleet total 46. 9. Announced plans to double service to Mexico during peak travel periods of Dec., March, and April. 10. Completed pilots' category II and III initial training. 11. Began JetExpress service to Little Rock, AR. 12. Received authorization to fly between St. Louis, MO and Cancun. 1. Plan to begin in Feb.
S2. Financial Review (P.T.) 1. Key Metrics: 1. Using non-GAAP measure of CASM ex fuel, excluding special items for both periods.
1. CASM ex fuel down 6% to $0.064. 2. Block hour daily utilization increased 3.7% YoverY to 10.7 hours. 3. Avg. aircraft stage length increased 8.3% to 989 miles. 4. Reduced maintenance costs per block hour 5% YoverY to $453. 5. Interrupted trip and passenger reaccommodation expenses continued to trend down. 1. On time performance continues to improve. 6. Spent nearly $1.2m on SABRE conversion project; expect cutover in Feb. 7. Cost of returning two Boeing aircraft to lessors about $200,000.
8. Pilot transition training costs about $500,000. 9. Live TD [phonetic] costs up $542,000. 10. Salary increase effective June 1, 2004. 2. Fuel: 1. Paid $1.55 per gallon vs. $1.03 in 3Q04; over 50% increase. 1. If fuel costs were same as 3Q04, mainline CASM would have been $0.079 and would have had pretax profit over $3m, excluding special items. 2. Approx. 25% hedged with price ceiling of $39 per barrel and floor of $34.85. 1. Same price hedge in place for March quarter, covering about same percent of total uplift. 3. Fuel hedge in place for June quarter with price ceiling of $1.34 per Gulf Coast jet gallon and …