SYMBOL COMPANY NAME
AC.PA Accor $54.15
AKH Air France-KLM $31.66
AAI Air Tran Holdings $10.60
ALK Alaska Air Group $42.12
AXP American Express Co. $57.93
AMIE Ambassadors International $37.34
AMR AMR Corp. $25.90
BYD Boyd Gaming $41.01
BAB British Airways $83.55
CCL Carnival Corp. $48.14
CAR Avis Budget Group $19.23
CHH Choice Hotels International $42.02
CAL Continental Airlines $32.24
DALRQ.PK Delta Air Lines $1.25
DIS The Walt Disney Co. $31.58
DTG Dollar Thrifty $42.84
EXPE Expedia $16.17
FS Four Seasons Hotels $63.27
FRNT Frontier Airlines $8.08
GET Gaylord Entertainment Co. $47.53
HET Harrah’s Entertainment $74.53
HA Hawaiian Airlines $3.98
HLT Hilton Hotels Corp. $29.32
IHG InterContinental Hotels Group $18.48
IDR Intrawest Corp. $34.82
JBLU JetBlue Airways Corp. $10.72
LVS Las Vegas Sands Corp. $77.50
MGM MGM Mirage $42.84
MAR Marriott International $41.07
NWACQ.PK Northwest Airlines Corp. $0.69
PCLN Priceline.com $40.00
RLH Red Lion Hotels $11.65
RCL Royal Caribbean $41.21
RYAAY Ryanair Holdings $65.00
TSG Sabre Holdings $25.50
LUV Southwest Airlines $16.54
0678.HK Star Cruises $1.46
HOT Starwood Hotels & Resorts $62.14
TRX TRXI $5.94
LCC US Airways Group $46.39
MTN Vail Resorts $39.04
WYN Wyndham Worldwide $29.82
WYNN Wynn Resorts $71.27
- 23. 8
- 18. 6
- 21. 6
- 17. 7
- 30. 4
$1,477.47 $1,044.98 41. 4
CUMULATIVE (NOT INCLUDING AIRLINES) $1,098.75 $817.75 34. 4
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REACHES OUT TO COMMUNITIES IN UNUSUAL FASHION
Frontier solicits RFPs for new routes
By Andrew Compart
Frontier, in an unusual if not unprecedented move, has issued a request for proposals from communities that want
the airline’s new regional service.
It’s common for airlines, airports and communities to
talk about new service, including incentives that the communities might offer to help the airline financially, with
marketing a new service or with market demand studies to
determine whether the service can be profitable. Many airports and communities are active in pitching for new service on those grounds.
But aside from a few annual domestic and international
conferences where hundreds of airlines and airport representatives get together, airlines don’t
seek out offers in such a broad, public
That’s not the case here. Frontier
decided to be more proactive, in part
because it is pressed for time.
In September Frontier signed an
agreement to purchase 10 74-seat
Bombardier Q400 turboprop aircraft,
and they are scheduled to be delivered
in about five months. It will use them for service by a subsidiary that would bring low-fare service between as many
as 18 “underserved” markets in Colorado and the Rocky
Mountain region and its Denver hub, where travelers could
connect to Frontier’s service to 57 North American cities.
Frontier also is seeking a partner to operate up to 20 regional jets, to either augment or replace the nine CRJ-700
aircraft currently operated by Horizon Air as Frontier Jet-Express. The expanded regional jet fleet will be used to seed
mainline service by developing new and smaller markets
into mature mainline markets for Frontier and to supplement Frontier’s mainline service.
To help determine its new markets, Frontier in mid-Octo-ber sent the RFP to about 50 airports and communities, many
of which it had already been talking to. It also issued a press
release Oct. 17 to garner some publicity in case it missed some
airports and communities that might be interested.
“In addition to the markets we have targeted to serve with
these aircraft, the RFP that was issued this week will help
determine the level of interest and commitment from these
as well as other potential communities,” said John Happ,
Frontier’s senior vice president of marketing and planning.
Frontier said the RFP was issued “to provide all potentially viable communities with an opportunity to outline
their need for, and plans to support, the introduction of
Frontier’s low-cost, high-quality air service.”
Frontier isn’t publicly releasing
the RFP. But both spokesman Joe
Hodas and a source who has seen
it said it talked only in generalities
about the incentives airports and
communities might offer.
Hodas said incentives, such as
landing fee reimbursement, could
not be the primary basis of the
response because Frontier wanted
routes that can be profitable on their own in the long term.
“We’re not interested in incentives longer than a year, because if we can’t get a route started in a year it’s not a long-term play for us,” he said.
But Frontier would appreciate market studies that help it
determine the level of demand and the support in marketing the service.
It’s also looking for information on an airport’s facilities
and technical capabilities.
RFP responses are due by Jan. 27. Frontier expects to begin initial service to new regional markets by the middle of
Frontier decided to be pro-active because it’s pressed
for time: 10 Bombardier
turboprop aircraft will be
delivered in five months.
AA turns a profit again, but
CEO not doing victory dance
By Andrew Compart
3Q ’06 3Q ’05
The third quarter was a good one for the three U.S. airlines
reporting their results Oct. 18 and 19, but American CEO
Gerard Arpey cautioned against concluding that American
or the U.S. airline industry has “turned the corner.”
American parent company AMR Corp. reported back-to-back quarterly profits for the first time since 2000, having made $291 million in the second quarter.
Continental’s $237 million profit in the third quarter included a $92 million gain from the sale of a portion of its
Copa Airlines stock. But that’s still a good result and came
on the heels of its second-quarter profit of $198 million. Its
third-quarter load factor was a record 82.2%.
Southwest reported a $48 million profit even though it
estimated the new security restrictions cost it $40 million
in revenue. That followed a record second-quarter profit of
Profits are nothing new to Southwest, but they have been
rare for the other major U.S. carriers. Now their cost-cut-ting efforts are finally paying off due to high demand, high
fares and declining fuel prices.
Nonetheless, Arpey said the industry “should be cautious
about declaring victory because of one to
two quarters of profit.”
The second and third quarters historically are the U.S. airline industry’s strongest
because that’s when demand is highest.
“I think the industry’s a long way from turning any corners,” Arpey said. “[The U.S. airline industry has] lost $50
billion since 2000, taken on billions and billions of dollars
3Q ’06 3Q ’05
3Q ’06 3Q ’05
of debt, and in a very, very strong U.S. and international
economy is producing very modest pretax margins. The
industry has a long way to go to get anything close to the
S&P profit margin.”
Arpey was referring to the profit margin for the S&P 500,
which American CFO Tom Horton said was averaging 15%
this year, compared with 1.3% for AMR.
Still, Horton said American had reasons for
The airline, for example, filled a record
81.7% of its seats in the third quarter, and with 7% higher
average fares, as measured by yield. Falling oil prices means
it will spend $528 million less on jet fuel in the second half
of this year than it had expected.