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

2. 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

3. 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

4. Chart 3: RASM, CASM, Yield per RPM, PRASM Strong outliers in 2009- Q2 for RASM and CASM Very steady behavior in Yield per RPM and PRASM

5. 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

6. 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

7. 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

8. Sources 1: http://www.frontierairlines.com/who-we-are/company-info/our-fleethttp://www.frontierairlines.com/who-we-are/company-info/our-fleet 2: http://www.frontierairlines.com/plan-book/routes-schedules/route- map http://www.frontierairlines.com/plan-book/routes-schedules/route- map 3: http://www.afafrontier.org/?zone=/unionactive/view_page.cfm&page=Ab out20AFA2DCWA http://www.afafrontier.org/?zone=/unionactive/view_page.cfm&page=Ab out20AFA2DCWA 4: http://www.frontierairlines.com/flight-info/seating-options http://www.frontierairlines.com/flight-info/seating-options 5: http://www.frontierairlines.com/plan-book/fare-optionshttp://www.frontierairlines.com/plan-book/fare-options 6: http://www.frontierairlines.com/Home/flight-info http://www.frontierairlines.com/Home/flight-info 7: http://www.frontierairlines.com/frequent-flyers/how-it-workshttp://www.frontierairlines.com/frequent-flyers/how-it-works