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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis-based Republic Airways Holdings Inc., which operates Frontier Airlines and flies under contract for major carriers, said it lost $22.4 million during the first quarter on higher fuel and maintenance costs, although the loss was smaller than a year ago.
The loss was still bigger than analysts had expected, and its shares fell.
The loss worked out to 46 cents per share. A year earlier it lost $36.5 million, or $1.06 per share. Revenue rose 8.3 percent to $659.1 million, from $608.7 million a year earlier, exceeding analyst predictions of $640 million.
Not counting special items, it said it would have lost $18.6 million, or 39 cents per share. Analysts surveyed by FactSet were expecting a loss of 32 cents per share on revenue of $635.9 million.
Republic's Frontier unit lost $55.2 million in the quarter, an improvement from its $70.4 million loss a year earlier. It raised fares, so revenue rose 12.2 percent to $395.4 million even though traffic was only up 2.4 percent. Per-seat revenue rose 13.8 percent. But fuel costs for Frontier rose 23.7 percent, adding $30.5 million to its fuel bill. It also had unrealized hedging gains of $8.7 million.
Like other, larger airlines, Frontier has faced sharply higher fuel costs in recent months. Its biggest bases are Denver, where it competes head-to-head with Southwest Airlines and United Airlines, and Milwaukee, where competitors include AirTran Airways, which Southwest bought on Monday.
Excluding fuel, costs for each seat flown one mile rose 5.2 percent due mainly to higher engine restoration and heavy maintenance on the Airbus fleet, and higher advertising costs.
Republic also does regional flying for larger airlines. That segment had a profit of $17.6 million, up from $14.3 million a year earlier. Revenue was flat.
Republic shares were down 10 cents each, to $5.25, in midday trading
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