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Frontier Airlines Boosts Outlook

Nat Worden

Shares of Frontier Airlines (FRNT Quote) were up more than 9% around midday Monday after the company predicted its quarterly earnings will come in above consensus estimates due to a spike in air travel in June.

Revenue passenger miles for the airline jumped 39.5% in June compared with last year. It carried 41.8% more passengers, and its load factor of 75.6% was the highest in the airline's nine-year history. As a result, Frontier said it would break even or earn up to 5 cents a share for its fiscal first quarter of 2004, which ends on June 30. Those estimates exclude government aid received during the quarter as a result of the Emergency Wartime Supplemental Appropriations Act.

Analysts' estimates had called for the airline to lose 14 cents a share for the quarter, according to Thomson First Call.

"The rebound of our passenger traffic in June 2003 compared to the distressed levels in April 2003, when our country was in the midst of a war in Iraq, has been encouraging," said Jeff Potter, the airline's president and chief executive.

On June 16, Morgan Stanley raised its rating on Frontier to equal weight from overweight, saying it expects the stock to outperform its peers in the next 12 months.

During afternoon trading, shares of Frontier were up 9.2%, or 89 cents, at $10.69.