Airline Operating Costs and Airline Productivity: Frontier Airlines Danielle Hettmann SYST461 Homework Assignment

Chart 1: ASMs, RPMs, and Load Factor Overall upward trend Load Factor and RPM have similar behavior ASM has transient behavior but is also apparent in RPM and Load Factor

Chart 2: Income Before Taxes, Total Operating Expenses, Total Operating Revenue Total Operating Expenses and Income Before Taxes are inversely related Total Operating Revenues and Total Operating Expenses have high correlation

Chart 3: RASM, CASM, Yield per RPM, PRASM Strong outliers in Q2 for RASM and CASM Very steady behavior in Yield per RPM and PRASM

Chart 4: Operating Expenses Overall, operating expenses are increasing Spike in aircraft fuel operating expenses does not imply a spike in non-fuel operating expenses

Chart 5: Operating Expenses Correlation between increase in jet fuel price and aircraft fuel operating expenses per ASM Non-fuel operating expenses are fairly constant per ASM but large changes can be attributed to large fluctuations in fuel prices and market response

Analysis of Fuel Prices Effect on Expenses: Increase in fuel prices drives up operating expenses for airlines, causing the cost for ASM to increase Effect on Airline Finance: Increase in fuel prices reduces the profit for airlines due to an increase in operating costs Effect on Airline Network Structure: Increase in fuel prices causes yield to rise, meaning less aircraft flying but more people flying on each aircraft

Sources 1: 2: map map 3: out20AFA2DCWA out20AFA2DCWA 4: 5: 6: 7: