Denver Airlines Lose Money In 2Q

Frontier Airlines, the Denver-based low-cost carrier posted a smaller loss of $2.7 million versus last year in it's fiscal first quarter, which measures the same timer period as most carrier's second quarters. This compares to a loss of $6.6 million last year. Frontier has done a terrific job of increasing its load factor which is critical for the carrier, as it has had difficulties in years past in securing high load factors partly due to some of its Denver connections that are inconvenient schedule-wise. The airline had a higher 78.4% load factor, versus a 70.7% load factor in Frontier's fiscal 1Q 2005. The higher load factor will hopefully allow the airline to turn a profit one of these days which will be good for the industry and Denver customers, who have been concerned about the financial health of both key airlines in the city, Frontier and United. If area consumers know that one airline is making money, then fares should start to go down assuming Frontier is able to turn a consistent profit.

The other key airline in the city, United reported a mega-loss of $1.4 billion, yes billion for the second quarter, which was a key result of reorganization items, mainly over $600 million in costs related to transferring pensions to the government, and over $500 million in charges related to contract rejection. Without these charges, United would have made $66 million, $7 million better than Q2 of 2004. United has done a great job of cutting costs and it does appear that the airline could exit bankruptcy this year.