Denver-based Frontier Airlines is enjoying record profitability that in the past 12 months propelled it to the fifth-most-profitable airline in the U.S. and seventh in the world, according to industry analysts.
"They're following a model that works at most places where it is tried," said Airline Weekly industry analyst Seth Kaplan. "They're not having to reinvent the wheel. They still have to execute it right, but the consensus at this point is rather clear: It's working."
Frontier logged a net profit of $54 million and an operating margin of 21 percent from April through June 2015, according to Airline Weekly analysis of second-quarter financial data compiled by the U.S. Department of Transportation.
The airline's operating margin in the second quarter of 2014 was 15 percent, up from 5 percent in the first quarter of 2014.
Worldwide, airlines logged an average operating margin of about 8 percent for the same period, Kaplan said.
"In the first five to six months of the year, we did a lot of restructuring in the business and began moving aircraft and operations to more profitable areas of the U.S., and that has yielded a benefit," Frontier chief financial officer Jimmy Dempsey said. "And you can't underestimate the benefit of lower oil prices."
The four most profitable U.S. carriers in the 12 months that ended in June — the most recent data available — are Allegiant Air, followed by Spirit, Alaska and Southwest, according to the Airline Weekly analysis.