"DIA extension possibly delayed"

Friday, October 29, 2004

DIA extension possibly delayed
By David Kesmodel\
The Denver (CO) Rocky Mountain News


The planned expansion of Denver International Airport's Concourse A might be
shelved because of the airline industry's prolonged downturn, Frontier
Airlines' top executive said today. 

Jeff Potter, CEO of the low-fare carrier, said during a conference call with
analysts that the expansion, which mostly would provide gates for Frontier,
might not make sense if some airlines reduce flights and stop leasing
existing DIA gates. 

Frontier and DIA "are being very focused on what's happening in the
industry, and potentially, depending on what this (industry) restructuring
may bring, there could be facilities available without having to expand the
concourse," he said. 

Potter didn't name any airlines that might give up gates. But three of DIA's
carriers are in bankruptcy: United, which has the most gates at DIA, US
Airways and ATA. Also, Delta is among carriers at risk of bankruptcy. 

The expansion was supposed to begin earlier this year but has been delayed
in part because Frontier was unhappy with the price quoted by the
construction team the city chose. That price has not been revealed. Earlier
estimates by Denver officials pegged the cost at about $77 million. 

Denver-based Frontier and other carriers would repay DIA for the expansion
through rent and other fees. 

Frontier spokesman Joe Hodas said the carrier is being prudent about costs
because of record jet-fuel prices and depressed airfares. 

The airline also might have less of a need for new gates in the near term
because it plans to phase out some Boeing 737 jets earlier than planned next
year. Its growth in seat capacity in fiscal 2006, which begins April 1, will
be 8 percent, down from previous plans of 12 percent to 13 percent. 

The Concourse A expansion is part of an agreement among Frontier, the city
and United forged about a year ago to settle a dispute over the allocation
of gates at the fifth-busiest U.S. airport. 

Under the accord, Chicago-based United ceded two Concourse A gates for
Frontier to use until October 2005 and permanently relinquished one gate to
Frontier. 

United spokesman Jeff Green said he would have no comment on Potter's
"speculation" Friday about the expansion. 

He declined to comment on whether United planned to withdraw from any gates
as part of its bankruptcy restructuring but stressed that the Denver hub
"does very well for us." 

DIA officials could not immediately be reached for comment. 

Also today, Frontier shares rose as much as 13 percent after the carrier
reported a smaller-than-expected fiscal second-quarter loss. The shares were
trading at $8.36, up about 8 percent, in Nasdaq trading at about 2 p.m. 

Frontier late Thursday posted a loss of $2.1 million, or 6 cents a share,
for the three months ended Sept. 30. 

Analysts were looking for a loss of 14 cents a share, according to Thomson
Financial. 
The airline's revenue rose 29.5 percent to $214.4 million. 

Frontier is the second-largest carrier at DIA. It is the 16th-largest U.S.
airline by passenger traffic.


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