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7/18/2004

Gas costs, fare wars hit Frontier

The Associated Press

DENVER — Frontier Airlines is dealing with a double whammy of higher fuel costs and a fierce war over fares, company chief Jeff Potter said Thursday.
For every 1-cent increase in the price of a barrel of oil, it costs Frontier an additional $1.5 million at an annual rate for fuel, Potter said. At the same time, there have been new airfare cuts.
“It’s interesting that it is happening at the same time we’ve been hit with higher fuel costs,” Potter said during a Denver Rotary Club address.
After his speech, Potter reiterated his intent to keep building business at Frontier’s Denver International Airport hub and that negotiations continue with the city over a new $25 million maintenance facility.
Frontier is expected to report a loss in the April-June quarter, primarily because of the rising fuel costs and fare competition.
“It does hurt,” airline analyst Michael Shonstrom of Shonstrom Research Associates said of fuel costs.