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The Denver carrier has reported its fifth consecutive monthly operating profit, despite millions of dollars of costs in March related to its debtor-in-possession financing. Frontier
announced on Tuesday that it turned a $20.7 million operating profit
and posted a consolidated net loss of $129.9 million for March. Had it
not been for its costs related to its $40 million DIP, Frontier said
that it would have reported an operating profit of $16.7 million and a
net profit of $15.2 million for the same period. Frontier is now getting its DIP from Republic Airways Holdings Inc. When Republic assumed the DIP loan agreement previously held by Credit Suisse Securities (USA) LLC and AQR Capital Management LLC, both companies also reached a settlement under which Republic would be allowed to file a $150 million nonpriority, unsecured, stipulated damage claim against Frontier. It's the costs associated with the $150 million claim that accounts for the consolidated net loss of $129.9 million instead of the swing to a $15.2 million net profit. The
claim arose from a 2007 airline services agreement between Frontier and
Republic and was originally rejected on June 22. But when Judge Robert
D. Drain of the U.S. Bankruptcy Court for the Southern District of New
York in Manhattan approved Republic's $40 million DIP commitment on
March 20, he also OK'd the settlement. Now the question is whether Frontier will keep its monthly streak alive. Frontier's president and CEO, Sean Menke, remains optimistic. "Frontier
is one of the only few carriers posting profits in the first quarter of
the year," he said in a press release. "We continue to prove that our
restructuring efforts have positioned us to consistently make money in
the most competitive market in the country face of the most trying
economics times." Denver-based Frontier blamed its April 10, 2008,
bankruptcy filing on its credit card processor unexpectedly withholding
proceeds form the carrier's ticket sale, which put a squeeze on its
liquidity. - Carolyn Okomo
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It's been five straight months of bluer skies for bankrupt Frontier Airlines Holdings Inc. 
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