Frontier on Friday narrowed its fiscal fourth-quarter loss to $3.7 million from $5.8 million last year, but executives predicted the losses to continue during the current period because of high fuel prices and a spring snowstorm at the Denver hub.
The results include a $2.4 million unrealized fuel derivative gain and a $400,000 gain from the sale of spare parts and inventory. Frontier reported a deep $23.4 million loss for its full fiscal year, compared with a $12.6 million profit last year. "While we are disappointed with the losses in our fourth fiscal quarter, we are encouraged by some positive trends which have surfaced this quarter," said CEO Jeff Potter.
The airline's unit revenue in the quarter grew 4.8% to 8.46 cents thanks to the combination of a 0.4% mainline yield and the 3.5-percentage-point load factor increase. The average length of haul rose 5.1%. "The strength in RASM, a trend we believe will continue into the foreseeable future, was fueled by two consecutive months of load factor increases," Potter said.
Mainline fuel cost per gallon during the quarter, excluding the one-time gain, grew 30.8% to $1.53, compared with $1.17 last year. Mainline CASM, excluding fuel, fell 1.5% o 6.68 cents from the same period last year. The unit cost improvement came despite $1.5 million in costs associated with the February conversion to Sabre for the airline's reservations and customer service system.
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