Lynx, Regional Drag on FL Results

Included in Frontier Airlines Holdings, Inc.’s consolidated third quarter net loss of $32.5 million was a $4.8 million charge for start-up costs and losses for its fledgling regional Lynx Aviation, which was to be expected given the new nature of its feeder. Regional partners Horizon (which ended its...

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Included in Frontier Airlines Holdings, Inc.’s consolidated third quarter net loss of $32.5 million was a $4.8 million charge for start-up costs and losses for its fledgling regional Lynx Aviation, which was to be expected given the new nature of its feeder.
Regional partners Horizon (which ended its participation in Frontier Jet Express in November) and Republic contributed $26.6 million in revenues for the quarter, up 17.9 percent and $88.3 million for the year, up 17.8 percent. Lynx had $2.6 million in revenues for the limited period it operated. Expenses for the regional partnerships reached $38.5 million in the quarter compared to $26.1 million in the year ago period. In addition, year-end expenses for the operation were $109.6 million versus $83.6 million in 2006. Lynx took six Bombardier Q400s in the fourth quarter, ending the year with an eight-aircraft fleet.
Lynx, which launched its own operations in December after ExpressJet stepped in when the carrier’s certification was delayed, incurred $0.9 million of start-up costs for the quarter.
"The two primary drivers for our loss were the 16.3 percent year-over-year increase in fuel cost per gallon and losses from our regional fleet operation,” said Frontier Airlines Holdings, Inc. President and CEO Sean Menke, who pointed out the loss followed one of the best quarters in its history. “To some extent these losses were generated by sub-optimal scheduling in our Mexico flights, both those originating in Denver as well as from other cities in our network, and schedule adjustments required to cover the delayed start-up of our Lynx service.”