Branded operations sends Frontier Airways Holdings into a loss for the first quarter

Frontier Airlines (2nd) Airbus A319-111 N932FR (msn 2258) LAS (Eddie Maloney), originally uploaded by Airliners Gallery.

Republic Airways Holdings (Indianapolis) reported pre-tax income of $17.6 million for its Fixed-Fee operations (flying as AmericanConnection, Continental Express, Delta Connection, United Express and US Airways Express). However the branded Frontier Airlines operations sent the company into the red due to an overall loss of $55.2 million for the first quarter.

According to the holding company:

“Excluding fuel reimbursement from our partners, fixed-fee service revenues were flat compared to the prior year’s first quarter. Income before taxes on the fixed-fee operations improved 23.1% to $17.6 million for the quarter compared to a pre-tax income of $14.3 million for the first quarter of 2010, which included $2.0 million of CRJ aircraft return costs. Cost per ASM (CASM), including interest expense but excluding fuel increased 0.9% to 8.14¢ for the first quarter of 2011, from 8.07¢ for the same quarter of 2010.”

However for the branded operations, Republic reports the following:

“The Company’s branded business segment includes all operations marketed as Frontier Airlines. Total revenues on Frontier increased 12.2% to $395.4 million for the quarter, compared to $352.3 million for the same period in 2010. Capacity on Frontier, as measured by ASMs, was down 1.4% year over year for the first quarter. Load factor was 78.7% for the quarter, up 3.0 points from the first quarter of 2010 and total revenue per ASM (TRASM) was 10.85¢, up 13.9% from the same quarter in 2010. For the quarter ended, March 31, 2011, Frontier posted a pre-tax loss of $55.2 million compared to a pre-tax loss of $70.4 million for the quarter ended March 31, 2010.

The unit cost for Frontier, excluding fuel, was 7.77¢ for the quarter, a 5.2% increase from 7.38¢ (excluding impairments) for the same metric for the first quarter of 2010. The unit cost increase was due mainly to higher engine restoration and heavy maintenance on the Airbus fleet and higher advertising costs.

Fuel costs for Frontier were $158.7 million for the quarter. The fuel cost per gallon, including into-plane taxes and fees, increased 23.7% to $2.92 for the first quarter of 2011 compared to $2.36 for the prior year’s first quarter. The increase in price resulted in $30.5 million additional fuel expense in the first quarter of 2011, as compared to first quarter 2010. The first quarter 2011 result includes unrealized fuel hedge gains of $8.7 million, or $0.16 per gallon. The first quarter 2010 result includes fuel hedge losses of $1.6 million, or $0.03 per gallon.”

Republic Airways Holdings Inc. is an airline holding company that owns Chautauqua Airlines, Frontier Airlines (2nd), Lynx Aviation, Republic Airlines (2nd) and Shuttle America.

Does Republic now regret buying Frontier Airlines?

Frontier Route Map: