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Subject: Shareholder's Meeting Date: 9/6/2001 4:27 PM
Recommendations: 4
I attended the shareholder's meeting today, and here are some of my take-aways:

1) The answer to the question about what the intentions are for the 100M shares was "no plans". They just want to have the flexibility in the future. Sam Addoms did mention split in his answer, but just hypothetical, no firm plans.

2) Airbus conversion is going pretty well. Should start showing up positively in operating cost numbers soon (both because worst of the start up cost is past, and because enough planes will be online to show savings). Biggest near term impact will be financial, getting out of expensive leases of older 737s. When a significant percent of fleet converts, then should see operating costs go down due to better fuel efficiency and maybe cheaper maintenance. The airbus conversion is an aggressive plan, so things can and probably will come up that aren't expected, but this is probably worth the risk. The Airbus planes give them a lot more flexibility (i.e. they can fly a smaller plane to farther destinations, so they can better serve routes that are currently high yield, but relatively low load factor).

3) Vision is to stay a single hub carrier. Keep it simple, keep costs down, productivity high. Concern: how much more can you grow? Sam Addoms believes there is room to grow for many years to come. Growth comes from adding cities, and then the follow on growth due to more connection traffic. Driving more traffic through hub with code-shares, Mesa is the latest. Also, the Mesa deal is revenue sharing, that way Mesa shares the risk. If it was fixed fee, like so many of these deals, Frontier would bear all of the risk.

4) No labor issues surfaced at the meeting. The employees I talked to like working for the company & are pretty positive about future.

5) I had good feelings about the management team - easy going, easy to approach, genuinely love this company, etc.

6) pretty good industry comparison chart of operating & pretax net margins - see the viewgraphs that you can access by going to the conference replay from

7) strategy on purchase of new planes is to use debt, but finance 80%, short pay-off time (10years). This keeps financing costs down. As long as Frontier maintains strong cash flow, strong cash position, they should be able to continue to obtain attractive rates.

I am buying more at 12 - I think this is a good long term opportunity, despite potential downside risks. Things will still be tough through the end of this year, especially since the whole industry is losing so much money, but next year, when year over year comps start getting easier, and airbus transition benefits start to be evident, stock should start moving up.

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