May Delay Airbus Order Due To Rising Fuel Prices
Frontier Airlines announced Wednesday it now expects to post a
loss of as much of 68 cents per share this quarter, due mainly to
unforeseen increases in the price of fuel.
The airline also announced it will respond by eliminating 100
corporate jobs in Denver. Pilots and flight attendants would be
unaffected by the cuts, reports the Denver Business Journal.
"We are also evaluating our fleet size and future aircraft
deliveries to ensure the fleet is 'right-sized' to endure this
difficult cost environment," said Frontier CEO and President Sean
Ironically, the discouraging financial news came in the same
press release as news that Frontier saw revenue passenger miles in
November which may set a monthly record, at almost 789 million.
That doesn't really help, though, when the airline is making
less on more fliers, due to fuel prices.
"The cost of jet fuel has climbed 18 percent since October when
we last provided an earnings estimate for the December quarter,"
Menke said. "Even though we are 40 percent hedged in the December
quarter with crude oil derivatives, our current estimate of the
price of fuel for the December quarter of $2.53 is a 17.7 percent
year over year increase. In light of this significant increase to
our operating costs, we are revising our previous guidance and we
now anticipate a pre-tax loss for the December quarter in the range
of $.58 - $.68 cents per share excluding special items."
Frontier operates a fleet of 60 Airbus A318, A319 and A320
aircraft, and ordered 10 Bombardier Q400 turboprops to start launch
its new Lynx subsidiary, serving Wichita, Rapid City, Albuquerque
Airline spokesman Joe Hodas says the Q400 order for Lynx will
not be cut, but a pending order for 10 Airbus A320s for Frontier
will be evaluated.