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Profitable Again, Will Frontier Exit Bankruptcy?


$1.1 million may not sound like a lot to most airlines, but to Frontier, which has been in Chapter 11 bankruptcy protection since April, its $1.1 million fourth-quarter profit is plenty. The airline recorded a $32.5 million loss for the fourth quarter of 2007, and had not posted a profitable fourth quarter in five years.

All this adds up to a potential exit from bankruptcy, possibly this summer. Frontier has cut jobs, capacity, and expenses in an effort to regain profitability, all moves that seem to have paid off. Frontier must now search for investors to provide the necessary cash needed to fully emerge from Chapter 11 protection.

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All this comes as airlines like Southwest, which hadn't posted a loss in nearly two decades, and Delta are reeling from big financial hits. Add an unfavorable economic climate, and Frontier's good quarter and improving prospects are even more impressive.

But Frontier isn't the only small airline bucking the trend of huge losses and bleak forecasts. Allegiant Air, which, like Southwest, serves mostly secondary airports, has consistently posted profits lately, showing that smaller, more focused airlines (see: Frontier) may have the upper hand. For now.

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