10-Q

                 FORM 10-Q

                                         SECURITIES AND EXCHANGE COMMISSION
                                               Washington, D.C.  20549


[X]      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended September 30, 2001.


[   ]    TRANSITION  REPORT  UNDER  SECTION  13  OR 15  (d)  OF  THE  SECURITIES
         EXCHANGE ACT OF 1934


Commission file number:  0-24126



                                               FRONTIER AIRLINES, INC.
                               (Exact name of registrant as specified in its charter)



           Colorado                                         84-1256945
(State or other jurisdiction
of incorporated or organization)            (I.R.S. Employer Identification No.)


    7001 Tower Rd., Denver, CO                                     80249
(Address of principal executive offices)                         (Zip Code)


Issuer's telephone number including area code:  (720) 374-4200


Indicate  by check  mark  whether  the  registrant  (1) has  filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was  required  to file such  reports),  and (2) has been  subject to
such filing requirements for the past 90 days.  Yes  X   No


The number of shares of the Company's  Common Stock  outstanding  as of November 9,
2001 was 28,505,590.







                         TABLE OF CONTENTS

                         PART I. FINANCIAL INFORMATION


                                                                            Page
                                                                            ----

Item 1.  Financial Information

         Financial Statements                                                  1


Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                 5

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           17




                         PART II. OTHER INFORMATION


Item 4.  Submission of Matters to a Vote of Security Holders                  19

Item 6.  Exhibits and Reports on Form 8-K                                     19







                         PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FRONTIER AIRLINES, INC.
Balance Sheets
(Unaudited)                                                                   September 30,      March 31,
                                                                                   2001            2001
                                                                             ---------------------------------
Assets
- ------
Current assets:
    Cash and cash equivalents                                                   $ 88,698,346  $ 109,251,426
    Short-term investments                                                         2,000,000      2,000,000
    Restricted investments                                                        12,400,000      9,100,000
    Trade receivables, net of allowance for doubtful accounts of $372,000
      and $368,000 at September 30 and March 31, 2001, respectively               16,811,143     32,380,943
    Maintenance deposits                                                          34,419,481     30,588,195
    Prepaid expenses and other assets                                              8,947,078     10,849,080
    Inventories                                                                    5,599,728      4,072,335
    Deferred tax assets                                                            1,908,587      1,506,218
    Deferred lease and other expenses                                                 73,630         45,621
                                                                             ---------------------------------
            Total current assets                                                 170,857,993    199,793,818
Security, maintenance and other deposits                                          43,236,379     45,680,373
Property and equipment, net                                                      148,143,588     38,100,126
Restricted investments                                                            11,276,860     11,683,660
Deferred lease and other costs                                                       548,735         58,621
                                                                             ---------------------------------
                                                                               $ 374,063,555  $ 295,316,598
                                                                             =================================
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
    Accounts payable                                                            $ 14,833,762   $ 21,623,067
    Air traffic liability                                                         50,105,147     62,663,237
    Other accrued expenses                                                        16,727,154     18,236,479
    Deferred federal grant (note 2)                                                1,316,239        -
    Accrued maintenance expense                                                   38,370,527     33,510,531
    Current portion of long-term debt (note 3)                                     3,119,157        -
    Income taxes payable                                                             239,540        -
    Current portion of obligations under capital leases                              131,454        125,552
                                                                             ---------------------------------
            Total current liabilities                                            124,842,980    136,158,866
Long-term debt (note 3)                                                           68,480,465        -
Accrued maintenance expense                                                       12,994,579     12,175,225
Deferred tax liability                                                             4,116,186      1,999,553
Deferred rent                                                                      1,579,592        -
Obligations under capital leases, excluding current portion                          137,230        203,863
                                                                             ---------------------------------
            Total liabilities                                                    212,151,032    150,537,507
                                                                             ---------------------------------
Stockholders' equity:
    Preferred stock, no par value, authorized 1,000,000 shares; none issued         -                -
    Common stock, no par value, stated value of $.001 per share, authorized
        100,000,000 and 40,000,000 shares at September 30, 2001 and
        March 31, 2001, respectively;  28,392,352 and 28,194,602 shares
        issued and  outstanding at September 30, 2001 and March 31, 2001,
        respectively                                                                  28,392         28,195
    Additional paid-in capital                                                    78,613,849     77,606,918
    Unearned ESOP shares                                                            (553,963)    (1,662,087)
    Retained earnings                                                             83,824,245     68,806,065
                                                                             ---------------------------------
            Total stockholders' equity                                           161,912,523    144,779,091
                                                                             ---------------------------------
                                                                               $ 374,063,555  $ 295,316,598

                                                                             =================================


FRONTIER AIRLINES, INC.
Statements of Income
(Unaudited)
                                                   Three Months Ended                Six Months Ended
                                             September 30,    September 30,   September 30,    September 30,
                                                 2001             2000             2001            2000
                                            ---------------- -------------------------------------------------
Revenues:
    Passenger                                $ 113,743,975    $ 128,403,974     $ 234,471,814  $ 239,371,369
    Cargo                                        1,572,891        2,046,754         3,538,464      3,272,248
    Other                                          689,345          632,150         1,312,290      1,248,005
                                            ---------------- -------------------------------------------------

            Total revenues                     116,006,211      131,082,878       239,322,568    243,891,622
                                            ---------------- -------------------------------------------------

Operating expenses:
    Flight operations                           50,959,339       44,455,749       100,695,793     84,086,836
    Aircraft and traffic servicing              17,954,683       14,840,730        35,800,653     28,488,515
    Maintenance                                 20,016,709       18,199,777        38,363,899     32,590,660
    Promotion and sales                         16,386,217       15,359,093        32,910,980     27,820,866
    General and administrative                   5,974,368        6,415,869        13,208,920     12,645,487
    Depreciation and amortization                2,744,541        1,218,440         5,066,409      2,292,782
                                            ---------------- -------------------------------------------------

            Total operating expenses           114,035,857      100,489,658       226,046,654    187,925,146
                                            ---------------- -------------------------------------------------

            Operating income                     1,970,354       30,593,220        13,275,914     55,966,476
                                            ---------------- -------------------------------------------------

Nonoperating income (expense):
    Interest income                              1,116,222        2,148,164         2,646,980      3,772,598
    Interest expense                              (673,552)         (17,491)         (926,426)       (34,950)
    Federal grant (note 2)                       8,802,235          -               8,802,235        -
    Other, net                                    (147,125)         (21,301)         (196,808)       (37,201)
                                            ---------------- -------------------------------------------------

            Total nonoperating income, net       9,097,780        2,109,372        10,325,981      3,700,447
                                            ---------------- -------------------------------------------------

Income before income tax expense                11,068,134       32,702,592        23,601,895     59,666,923

Income tax expense                               3,789,551       12,509,016         8,583,715     23,025,105
                                            ---------------- -------------------------------------------------

Net income                                     $ 7,278,583     $ 20,193,576      $ 15,018,180   $ 36,641,818
                                            ================ =================================================

Earnings per share:
            Basic                                    $0.26            $0.75             $0.53          $1.37
                                            ================ =================================================
            Diluted                                  $0.24            $0.69             $0.50          $1.27
                                            ================ =================================================

Weighted average shares of
  common stock outstanding
            Basic                               28,360,534       26,871,656        28,324,778     26,742,822
                                            ================ =================================================
            Diluted                             29,807,169       29,231,432        29,807,470     28,947,344
                                            ================ =================================================







FRONTIER AIRLINES, INC.
Statements of Cash Flows
For the Six Months Ended September 30, 2001 and 2000
(Unaudited)

                                                                                   2001            2000
                                                                             ---------------------------------
Cash flows from operating activities:

    Net income                                                                  $ 15,018,180   $ 36,641,818
    Adjustments to reconcile net income to net cash
        provided by operating activities:
            Employee stock option plan compensation expense                        1,108,124        571,876
            Depreciation and amortization                                          5,113,021      2,374,546
            Deferred tax expense                                                   1,714,264         39,658
            Changes in operating assets and liabilities:
            Restricted investments                                                (3,825,000)      (400,000)
            Trade receivables                                                     15,569,800     (6,265,237)
            Security, maintenance and other deposits                              (5,519,404)    (6,779,311)
            Prepaid expenses and other assets                                      1,337,267     (1,388,439)
            Inventories                                                           (1,527,393)      (681,207)
            Accounts payable                                                      (6,789,305)    (2,239,490)
            Air traffic liability                                                (12,558,090)    11,136,768
            Other accrued expenses                                                (1,509,325)     6,506,238
            Deferred federal grant                                                 1,316,239        -
            Income taxes payable                                                     675,559      4,374,123
            Accrued maintenance expense                                            5,679,350      7,372,599
            Deferred rent                                                          1,579,592        -
                                                                              ------------------------------
            Net cash provided by operating activities                             17,382,879     51,263,942
                                                                             ---------------------------------

Cash flows from investing activities:
    Decrease in short-term investments                                              -            13,760,000
    Aircraft lease and purchase deposits, net                                      4,132,112     (5,687,799)
    Decrease (increase) in restricted investments                                    931,800     (2,930,500)
    Capital expenditures                                                        (115,109,871)    (7,120,701)
                                                                             ---------------------------------
            Net cash used by investing activities                               (110,045,959)    (1,979,000)
                                                                             ---------------------------------

Cash flows from financing activities:
    Net proceeds from issuance of common stock                                      571,109       1,809,915
    Proceeds from long-term borrowings                                           72,000,000          -
    Principal payments on long-term borrowings                                     (400,378)         -
    Principal payments on obligations under capital leases                          (60,731)        (54,687)
                                                                             ---------------------------------
            Net cash provided by financing activities                            72,110,000       1,755,228
                                                                             ---------------------------------

            Net (decrease) increase in cash and cash equivalents                (20,553,080)     51,040,170

Cash and cash equivalents, beginning of period                                  109,251,426      67,850,933
                                                                             ---------------------------------

Cash and cash equivalents, end of period                                       $ 88,698,346    $118,891,103
                                                                             =================================







FRONTIER AIRLINES, INC.
Notes to Financial Statements
September 30, 2001


(1)  Basis of Presentation

     The  accompanying  unaudited  financial  statements  have been  prepared in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial  information  and the  instructions  to Form 10-Q and  Regulation
     S-X.  Accordingly,   they  do  not  include  all  of  the  information  and
     footnotes  required  by  generally  accepted   accounting   principles  for
     complete  financial  statements and should be read in conjunction  with the
     Company's  Annual  Report on Form 10-K for the year ended  March 31,  2001.
     In the opinion of management,  all adjustments  (consisting  only of normal
     recurring  adjustments)  considered  necessary for a fair presentation have
     been  included.  The  results  of  operations  for  the  six  months  ended
     September  30, 2001 are not  necessarily  indicative  of the  results  that
     will be realized for the full year.

(2)  Air Transportation Safety and Stabilization Act

     As a result of the  September  11,  2001  terrorist  attacks  on the United
     States,  on  September  22,  2001  President  Bush  signed into law the Air
     Transportation  Safety and System  Stabilization  Act (the "Act").  The Act
     includes for all U.S.  airlines and air cargo  carriers the  following  key
     provisions:  (i) $5 billion  in cash  compensation,  of which $4.5  billion
     is available to  commercial  passenger  airlines and is allocated  based on
     the lesser of each  airline's  share of available  seat miles during August
     2001  or the  direct  and  incremental  losses  (including  lost  revenues)
     incurred by the  airline  from  September  11, 2001  through  December  31,
     2001;  (ii) subject to certain  conditions,  the  availability of up to $10
     billion  in federal  government  guarantees  of  certain  loans made to air
     carriers for which credit is not  reasonably  available as  determined by a
     newly  established  Air  Transportation   Stabilization  Board;  (iii)  the
     authority of the  Secretary  of  Transportation  to reimburse  air carriers
     (which  authority  expires  180 days  after the  enactment  of the Act) for
     increases  in the cost of war risk  insurance  over the  premium  in effect
     for the  period  September  4,  2001 to  September  10,  2001;  (iv) at the
     discretion  of the  Secretary of  Transportation,  a $100 million  limit on
     the  liability of any air carrier to third  parties with respect to acts of
     terrorism  committed  on or to such air  carrier  during the 180 day period
     following  enactment  of the  Act;  and (v) the  extension  of the due date
     for the payment by air carriers of certain payroll and excise taxes until
     November 15, 2001 and January 15, 2002, respectively.

     The Company  anticipates  receiving up to  approximately  $20,200,000  from
     the $5 billion in authorized  grants,  of which $10,118,000 was received in
     September  2001.  The Company  recognized  $8,802,000  of the grant  during
     the quarter  ended  September  30,  2001 which is included in  nonoperating
     income  and  expenses;   the  remaining   $1,316,000   represents   amounts
     received in excess of  allowable  direct and  incremental  losses  incurred
     from  September  11,  2001 to  September  30,  2001  and is  included  as a
     deferred  liability in the balance  sheet.  The  Company's  entitlement  to
     receive the entire  amount of the maximum  grant  payable to it will depend
     on its  operating  results  for  the  period  September  11,  2001  through
     December  31, 2001,  compared to those it expected  just prior to September
     11, 2001 to achieve for the same period. To date the Company has deferred
     the payment of  $847,000 and $1,980,000 in payroll and excise taxes,
     until November 15, 2001 and January 15, 2002, respectively, as permitted by
     the Act.

(3)  Long-Term Debt

     In May 2001,  the Company  entered into a credit  agreement to borrow up to
     $72,000,000  for the  purchase  of three  Airbus  aircraft  with a  maximum
     borrowing of  $24,000,000  per  aircraft.  Each aircraft loan has a term of
     120  months  and  is  payable  in  equal  monthly  installments,  including
     interest,  payable in arrears.  The loans are secured by the  aircraft.  As
     of  September  30,  2001,  the Company  had  borrowed  $72,000,000  for the
     purchase  of  three  Airbus  aircraft.   Each  loan  provides  for  monthly
     principal and interest  payments  ranging from $205,579 to $218,109,  bears
     interest  with rates ranging from 6.05% to 6.71%,  averaging  6.43% for the
     three aircraft loans,  with maturities in May, August,  and September 2011,
     and has a balloon  payment of  $10,200,000  at the  expiration  of the loan
     term.

Item 2:  Management's Discussion and Analysis of Financial Condition and
Results of Operations

This report contains  forward-looking  statements  within the meaning of Section
21E of the  Securities  Exchange  Act of 1934 that  describe  the  business  and
prospects of Frontier  Airlines,  Inc.  ("Frontier"  or the  "Company")  and the
expectations  of  our  Company  and  management.  All  statements,   other  than
statements   of  historical   facts,   included  in  this  report  that  address
activities,   events  or  developments  that  we  expect,   believe,  intend  or
anticipate  will or may occur in the  future,  are  forward-looking  statements.
When used in this document,  the words "estimate,"  "anticipate,"  "project" and
similar  expressions  are  intended  to  identify  forward-looking   statements.
Forward-looking  statements are inherently  subject to risks and  uncertainties,
many of which  cannot be  predicted  with  accuracy  and some of which might not
even  be  anticipated.  These  risks  and  uncertainties  include,  but  are not
limited  to:  the  timing  of,  and  expense  associated  with,   expansion  and
modification  of our operations in accordance  with our business  strategy or in
response to competitive  pressures or other factors;  general  economic  factors
and behavior of the fare-paying  public;  increased federal scrutiny of low-fare
carriers   generally  that  may  increase  our  operating   costs  or  otherwise
adversely  affect  us;  actions  of  competing  airlines,   such  as  increasing
capacity  and pricing  actions of United  Airlines  and other  competitors;  the
availability  of  suitable  aircraft,  which may  inhibit our ability to achieve
operating  economies  and implement our business  strategy;  the  unavailability
of, or  inability  to secure  upon  acceptable  terms,  financing  necessary  to
purchase  aircraft which we have ordered;  issues  relating to our transition to
an  Airbus  aircraft  fleet;   uncertainties   regarding  aviation  fuel  price;
uncertainties  regarding  future  terrorist  attacks  on the  United  States  or
military actions that may be taken;  and  uncertainties as to when and how fully
consumer  confidence  in  the  airline  industry  will  be  restored,  if  ever.
Because  our  business,   like  that  of  the  airline  industry  generally,  is
characterized  by high fixed costs relative to revenues,  small  fluctuations in
our  yield  per  RPM or  expense  per  ASM can  significantly  affect  operating
results.  See "Risk  Factors" in our Form 10-K for the year ended March 31, 2001
as  they  may  be  modified  by  the  disclosures   contained  in  this  report.
Additional  information  regarding  these and other  factors may be contained in
the  Company's  Form  10-K  for its  fiscal  year  ended  March  31,  2001;  the
Company's  Form 8-K filed May 7, 2001 and the Company's  Form 8-K filed Jan. 22,
2001,  as  amended by the  Company's  Form 8-K/A  filed July 11,  2001,  and the
Company's Form 10-Q for its fiscal quarter ended June 30, 2001.

Share,  per share and common  stock  information  contained  in this  report has
been  retroactively  adjusted or "restated"  to reflect a fifty  percent  common
stock dividend to  shareholders of record on  February 19,  2001,  which we paid
on March 5, 2001.

General

       We  are  a  scheduled  airline  based  in  Denver,   Colorado.   We  were
organized  in February  1994 and we began  flight  operations  in July 1994 with
two leased Boeing  737-200  jets. We have since  expanded our fleet to 26 leased
jets and  three  purchased  Airbus  A319  aircraft,  comprised  of seven  Boeing
737-200s,  17 Boeing  737-300s,  and five Airbus  A319s.  Beginning in May 2001,
we began a fleet  replacement  plan by which we will replace our Boeing aircraft
with new purchased  and leased  Airbus jet  aircraft,  a transition we expect to
complete by  approximately  the first  quarter of calendar  year 2005,  assuming
early  lease  returns  of five of our  Boeing  aircraft.  We have  advanced  the
return of a leased  Boeing  737-300  aircraft  to its owner  from  April 2002 to
September 2001.

       As of October 31, 2001,  we operate  routes  linking our Denver hub to 24
cities  in 18  states  spanning  the  nation  from  coast  to  coast.  We  added
Houston,  Texas to our  route  system  on May 16,  2001.  We  commenced  service
between  Denver and Reno/Lake  Tahoe,  Nevada and Austin,  Texas,  on October 1,
2001, each with two daily nonstop  round-trip  flights.  Effective July 9, 2001,
we began a codeshare  agreement with Great Lakes Aviation,  Ltd. ("Great Lakes")
by which Great Lakes provides  daily service to seven regional  markets from our
Denver  hub.  The  codeshare   agreement   initially   included  Casper,   Cody,
Gillette,  and Cheyenne,  Wyoming,  Amarillo,  Texas,  Santa Fe, New Mexico, and
Hayden,   Colorado.   The   codeshare   agreement   was   expanded   to  include
29additional  Great Lakes cities  including  Laramie,  Riverton,  Rock  Springs,
Sheridan, and Worland,  Wyoming,  Cortez and Telluride,  Colorado,  Scottsbluff,
Nebraska,  and  Farmington,  New Mexico  effective  November 15, 2001,  with the
exception of Sheridan,  Wyoming,  where the  codeshare  commenced on October 31,
2001.  Effective  December 14, 2001 the  remaining 20 cities will be added which
include Page and Phoenix,  Arizona,  Alamosa and Pueblo,  Colorado,  Dodge City,
Garden City, Hays, and Liberal, Kansas,  Dickinson and Williston,  North Dakota,
Alliance,  Chadron, Grand Island,  Kearney,  McCook,  Norfolk, and North Platte,
Nebraska,  Pierre,  South  Dakota,  and Moab and  Vernal,  Utah.We  expect  this
agreement  may expand our  service,  in the  future,  into  additional  small to
mid-size  markets  currently  served  by  Great  Lakes  in  Colorado,   Wyoming,
Nebraska,  South Dakota,  North Dakota,  Kansas,  New Mexico,  Utah, Arizona and
Texas.

       In  September  2001,  we entered  into a  codeshare  agreement  with Mesa
Airlines,  Inc. ("Mesa").  Under the terms of the agreement,  we will market and
sell  flights  operated  by  Mesa  as  Frontier  JetExpress.  The  codeshare  is
anticipated  to begin during the first  calendar  quarter of 2002 and  initially
will  include the  operation  by Mesa of at least five  50-passenger  Bombardier
CRJ-200  regional jets,  which will provide service to new  destinations as well
as offer additional frequency to our current route system.

       We  currently  use up to nine  gates  at our  hub,  Denver  International
Airport  ("DIA"),  where  we  operate  approximately  103  daily  system  flight
departures  and arrivals.  Prior to the September  11, 2001  terrorist  attacks,
we operated  approximately 126 daily system flight  departures and arrivals.  On
November  15,  2001,  we  plan  to add  an  additional  8  daily  system  flight
departures  and arrivals to our schedule.  We plan to restore  service to Ronald
Reagan  Washington  National  Airport  on  December  12,  2001  with  one  daily
round-trip.  We  intend  to  continue  to  monitor  passenger  demand  and other
competitive factors and adjust the number of flights we operate accordingly.

       Small  fluctuations  in our yield per revenue  passenger  mile ("RPM") or
expense per  available  seat mile  ("ASM") can  significantly  affect  operating
results  because we, like other  airlines,  have high fixed costs in relation to
revenues.   Airline   operations  are  highly   sensitive  to  various  factors,
including  the  actions of  competing  airlines  and general  economic  factors,
which can adversely affect our liquidity, cash flows and results of operations.

       As a result of the  September  11  terrorist  attacks,  expansion  of our
operations and  transition  costs  associated  with our fleet  replacement  plan
during the six months ended  September 30, 2001,  the slowing  economy,  as well
as hail storms that  damaged  five of our  aircraft  earlier in the year,  we do
not believe our results of  operations  for the six months ended  September  30,
2001 are  indicative  of  future  operating  results  or  comparable  to the six
months ended September 30, 2000.

Results of Operations

       We had net income of  $15,018,000  or 50(cent)per  diluted  share for the six
months  ended  September  30, 2001 as compared to net income of  $36,642,000  or
$1.27 per diluted  share for the six months ended  September  30,  2000.  We had
net income of  $7,279,000  or 24(cent)per diluted  share for the three  months
ended September 30, 2001 as compared to net income of  $20,194,000  or 69(cent)
per diluted share for the three months ended  September  30,  2000.  On
September 11, 2001, the  Federal  Aviation   Administration ("FAA") temporarily
suspended commercial  airline  flights as a result of the terrorist  attacks on
the United States.  As a result of this  suspension,  we cancelled  407
scheduled  flights until  we  resumed   operations  on  September   14,  2001.
After  we  resumed operations,  we cancelled 303 additional  scheduled  flights
through  September 30, 2001 as a result of  diminished  consumer  demand.  Due
to high fixed costs, we  continued  to  incur  substantially  all of our normal
operating expenses during this period and generated substantial operating losses.
As a result, we recognized $8,802,000 of the federal cash grant we received as a
result of the Air Transportation Safety and Stabilization Act ("Act"),  which
compensates for direct and incremental losses incurred by air carriers from
September 11, 2001 through the end of calendar year 2001.  Excluding the grant
we  recognized, our net income for the three months ended September 30, 2001
would have been $1,843,000 or 6(cent)per diluted share.

       Prior  to  the   terrorist   attacks  on  September  11,  2001,  we  were
experiencing  the effects of the slowing  economy  which had caused lower fares,
and  reduced   business  and  leisure  travel.   During  the  six  months  ended
September 30, 2001, we also cancelled  approximately  120 flights as a result of
weather conditions the Denver area experienced.

       During the six months ended  September  30, 2001, we took delivery of our
first five  Airbus  aircraft.  As this was a new  aircraft  type for us, we were
required  by the FAA to  demonstrate  that our crews were  proficient  in flying
this  type  aircraft  and  that we were  capable  of  properly  maintaining  the
aircraft and related  maintenance  records  before we placed  these  aircraft in
scheduled  passenger  service.  This process took longer than we originally  had
anticipated  and,  as a result,  we were  required to cancel  scheduled  flights
that the first  aircraft  was  scheduled  to  perform.  Because of this delay in
receiving  necessary FAA approvals,  we believe that our passenger  revenues and
our cost per ASM were adversely  effected  during the six months ended September
30, 2001.

       Our cost per ASM for the six months  ended  September  30,  2001 and 2000
were 9.62(cent)and 8.99(cent),  respectively,  an increase of .63(cent)or 7.0%.
Cost per ASM excluding fuel for the six months ended September 30, 2001 and 2000
were 8.13(cent)and 7.42(cent), respectively, an increase of .71(cent)or 9.6%.
Our cost per ASM for the three  months ended September 30, 2001 and 2000  were
9.50(cent) and 9.36(cent), respectively, an increase of .14(cent)or 1.5%. Cost
per ASM excluding fuel for the three months ended September 30, 2001 and 2000
were 8.04(cent)and 7.67(cent), respectively, an increase of .37(cent)or 4.8%.
Our cost per ASM  increased  during the six  months  ended  September  30,  2001
because of an  increase  in flight operations expenses (including fuel)  which
accounted for .27(cent)per ASM, an increase in aircraft  and traffic  servicing
expenses of .16(cent), and an increase in  maintenance  expenses of .07(cent)per
ASM.  These expenses were impacted by the terrorist attacks and the hail damage
to five of our  aircraft during the six months ended September 30, 2001, or
approximately 20% of our fleet.  We incurred  short-term lease expenses for
substitute aircraft to minimize the number of flight cancellations while our
aircraft  were  being  repaired, additional maintenance expenses for the repair
of the hail damage, and interrupted trip expenses as a result of the number of
flight  cancellations related to the aircraft out of service for repair.  During
April  2001, the Denver area also experienced an unusual blizzard, which caused
flight cancellations as well as expenses associated with deicing our aircraft.
We estimate that the total adverse impact on our cost per ASM associated with
these unusual weather conditions was .08(cent), or approximately  $1,893,000.
Additionally, due to the flight cancellations as a result of the September 11
terrorist attacks and these weather conditions, our ASMs were less than we had
planned, which caused our fixed costs to be spread over fewer ASMs and, we
believe,  distorted our cost per ASM for the period.  During  the six months
ended  September  30, 2001, we incurred  approximately  $3,643,000 in transition
expenses associated with the induction of the Airbus aircraft which had an
adverse effect on our CASM of approximately .16(cent)per ASM. These include crew
salaries; travel, training and induction team expenses; and depreciation
expense.  We also  experienced  an increase in promotion  and sales  expenses to
stimulate traffic in a weak economy of .07(cent)per ASM.  An increase in pilots'
salaries effective in May 2001 also  contributed  to the  increase in cost per
ASM during the six months ended September 30, 2001.

       An airline's  break-even  load factor is the  passenger  load factor that
will result in operating  revenues being equal to operating  expenses,  assuming
constant  revenue per  passenger  mile and  expenses.  For the six months  ended
September  30,  2001,  our  break-even  load  factor was 57.8%  compared  to our
achieved  passenger  load factor of 64.2%.  For the six months  ended  September
30,  2000,  our  break-even  load  factor  was 51.2%  compared  to our  achieved
passenger load factor of 68.3%.  Our break-even  load factor  increased from the
prior  comparable  period  largely as a result of a decrease in our average fare
to $133  during the six months  ended  September  30,  2001 from $149 during the
six months ended  September  30, 2000,  compounded by an increase in our expense
per ASM to 9.62(cent)for the six  months  ended  September  30,  2001 from 8.99
(cent for) the six months ended September 30, 2000.






       The  following  table  provides  certain of our  financial  and operating
data for the  period  July 1,  2001  through  September  10,  2001 and the three
month and six month periods ended September 30, 2001 and 2000.

                                          July 1, 2001
                                            Through     Three Months Ended Sept. 30,   Six Months Ended Sept. 30,
                                         Sept. 10, 2001      2001          2000            2001           2000
                                         ---------------------------------------------------------------------------
Selected Operating Data:
Passenger revenue (000s) (1)               101,456        113,744       128,404          234,472        239,371
Revenue passengers carried (000s)              714            802           826            1,648          1,538
Revenue passenger miles (RPMs) (000s) (2)  653,695        732,531       760,845        1,509,295      1,427,600
Available seat miles (ASMs) (000s) (3)   1,005,570      1,200,608     1,073,703        2,349,154      2,091,258
Passenger load factor (4)                     65.0%          61.0%         70.9%            64.2%          68.3%
Break-even load factor (5)                    57.3%          55.1%         52.8%            57.8%          51.2%
Block hours (6)                             19,855         23,769        20,823           46,428         40,848
Departures                                   8,945         10,730         9,772           20,920         18,901
Average aircraft stage length                  852            848           839              851            845
Average passenger length of haul               916            913           921              916            928
Average daily fleet block hour utilization(7) 10.1            9.4           9.2              9.6            9.3
Yield per RPM (cents) (8)                    15.52          15.53         16.88            15.54          16.77
Total yield per RPM (cents) (9)              15.83          15.84         17.23            15.86          17.08
Total yield per ASM (cents) (10)             10.29           9.66         12.21            10.19          11.66
Expense per ASM (cents)                       9.14           9.50          9.36             9.62           8.99
Expense per ASM excluding fuel (cents)        7.69           8.04          7.67             8.13           7.42
Average fare (11)                        $     132      $     132     $     149        $     133      $     149
Average aircraft in fleet                     27.4           27.4          24.5             26.3           24.0
Aircraft in fleet at end of period            27.0           29.0          25.0             29.0           25.0
Average age of aircraft at end of period      10.8           10.1          10.9             10.1           10.9
EBITDAR (000s) (12)                         26,164         29,496        46,925           59,389         88,125
EBITDAR as a % of revenue                     25.3%          25.4%         35.8%            24.8%          36.1%

 (1) "Passenger revenue" includes revenues for non-revenue passengers,
     administrative fees, and revenue recognized for unused tickets that are
     greater than one year from issuance date.
(2)  "Revenue passenger miles," or RPMs, are determined by multiplying the
     number of fare-paying passengers carried by the distance flown.
(3)  "Available seat miles," or ASMs, are determined by multiplying the number
     of seats available for passengers by the number of miles flown.
(4)  "Passenger load factor" is determined by dividing revenue passenger miles
     by available seat miles.
(5)  "Break-even load factor" is the passenger load factor that will result in
     operating revenues being equal to operating expenses, assuming constant
     revenue per passenger mile and expenses
(6)  "Block hours" represent the time between aircraft gate departure and
     aircraft gate arrival.
(7)  "Average daily block hour utilization" represents the total block
     hours divided by the weighted average number of aircraft days in service.
(8)  "Yield per RPM" is determined by dividing passenger revenues by
     revenue passenger miles.
(9)  "Total Yield per RPM" is determined by dividing total revenues by revenue
     passenger miles.
(10) "Total Yield per ASM" is determined by dividing passenger revenues by
     available seat miles.
(11) "Average fare"  excludes revenue included in passenger revenue for
     non-revenue passengers, administrative fees, and revenue recognized for
     unused tickets that are greater than one year from issuance date.
(12) "EBITDAR", or "earnings before interest, income taxes, depreciation,
     amortization and aircraft rentals," is a supplemental financial
     measurement many airline industry analysts and we use in the evaluation
     of our business.  However, EBITDAR should only be read in conjunction
     with all of our financial statements appearing elsewhere herein, and
     should not be construed as an alternative either to operating income (as
     determined in accordance with generally accepted accounting principles)
     as an indicator of our operating performance or to cash flows from
     operating activities (as determined in accordance with generally accepted
     accounting principles) as a measure of liquidity.






       The  following  table  provides  our  operating   revenues  and  expenses
expressed  as cents  per  total  ASMs  and as a  percentage  of total  operating
revenues,  as  rounded,  for  the  three  month  and  six  month  periods  ended
September 30, 2001 and 2000.

                                   Three Months Ended September 30,             Six Months Ended September 30,
                              ---------------------------------------------------------------------------------------
                                      2001                  2000                  2001                 2000
                              ---------------------------------------------------------------------------------------
                                   Per         %        Per         %          Per         %        Per         %
                                  total       of       total        of        total       of       total       of
                                   ASM      Revenue     ASM      Revenue       ASM      Revenue     ASM      Revenue
                                   ---      -------     ---      -------       ---      -------     ---      -------


Revenues:
    Passenger                      9.47       98.0%     11.96     97.9%         9.98       98.0%   11.45        98.2%
    Cargo                          0.13        1.4%      0.19      1.6%         0.15        1.5%    0.15         1.3%
    Other                          0.06        0.6%      0.06      0.5%         0.06        0.5%    0.06         0.5%
                              ---------------------------------------------------------------------------------------
Total revenues                     9.66      100.0%     12.21    100.0%        10.19      100.0%   11.66       100.0%
                              =======================================================================================

Operating expenses:
    Flight operations              4.24       43.9%      4.14     33.9%         4.29       42.1%    4.02        34.5%
    Aircraft and traffic servicing 1.50       15.5%      1.38     11.3%         1.52       15.0%    1.36        11.7%
    Maintenance                    1.67       17.3%      1.70     14.0%         1.63       16.0%    1.56        13.4%
    Promotion and sales            1.36       14.1%      1.43     11.7%         1.40       13.8%    1.33        11.4%
    General and administrative     0.50        5.1%      0.60      4.9%         0.56        5.5%    0.61         5.2%
    Depreciation and amortization  0.23        2.4%      0.11      0.9%         0.22        2.1%    0.11             0.9%
                              ---------------------------------------------------------------------------------------
Total operating expenses           9.50       98.3%      9.36     76.7%         9.62       94.5%    8.99            77.1%
                              =======================================================================================

Total ASMs (000s)             1,200,608             1,073,703              2,349,154           2,091,258

Revenues

       Our   revenues   are  highly   sensitive   to  changes  in  fare  levels.
Competitive  fare pricing  policies have a  significant  impact on our revenues.
Because of the  elasticity  of passenger  demand,  we believe that  increases in
fares may at certain  levels  result in a decrease in  passenger  demand in many
markets.  We cannot  predict  future fare levels,  which depend to a substantial
degree on actions of  competitors  and the  economy.  When sale  prices or other
price changes are initiated by  competitors  in our markets,  we believe that we
must,  in most cases,  match those  competitive  fares in order to maintain  our
market  share.  Passenger  revenues  are  seasonal  in  leisure  travel  markets
depending  on  the  markets'   locations  and  when  they  are  most  frequently
patronized.

       Our average  fare for the six months  ended  September  30, 2001 and 2000
was $133 and $149,  respectively,  a  decrease  of 10.7%.  We  believe  that the
decrease in the  average  fare during the six months  ended  September  30, 2001
from the prior  comparable  period was a result of the slowing  economy.  During
the six months ended  September  30,  2000,  we  experienced  an increase in the
number of passengers  that a major  competitor  directed to us because of delays
and  cancellations  that airline  experienced.  We estimate that the  additional
passenger  traffic  received from that airline had the effect of increasing each
of our average fare and load factor by approximately 1%.

       Passenger  Revenues.  Passenger  revenues  totaled  $234,742,000  for the
six months  ended  September  30,  2001  compared  to  $239,371,000  for the six
months ended  September 30, 2000,  or a decrease of 1.9%, on increased  capacity
of  257,896,000  or  12.3%.  Passenger  revenues  totaled  $113,744,000  for the
three months ended  September  30, 2001 compared to  $128,404,000  for the three
months ended September 30, 2000, or a decrease of 11.4%,  on increased  capacity
of 126,905,000 or 11.8%.  Passenger  revenue  includes  revenues for non-revenue
passengers,  administrative  fees,  and revenue  recognized for tickets that are
not used within one year from their issue dates.  We carried  1,648,000  revenue
passengers   during  the  six  months  ended  September  30,  2001  compared  to
1,538,000 in the six months ended  September  30, 2000,  an increase of 7.2%. We
had an  average  of 26.3  aircraft  in our fleet  during  the six  months  ended
September 30, 2001  compared to an average of 24 aircraft  during the six months
ended  September  30, 2000,  an increase of 9.6%.  RPMs for the six months ended
September  30, 2001 were  1,509,295,000  compared to  1,427,600,000  for the six
months  ended  September  30, 2000,  an increase of 5.7%.  During the six months
ended  September  30, 2001, we cancelled  approximately  830 flights as a result
of the  September  11,  2001  terrorist  attacks,  and  weather  conditions  and
weather  related  repairs in the  Denver  area  earlier in the year.  We believe
that this had an adverse effect on our revenue during the period.

       Cargo  revenues,  consisting  of revenues  from freight and mail service,
totaled  $3,538,000 and  $3,272,000 for the six months ended  September 30, 2001
and  2000,  respectively,  representing  1.5% and 1.3%,  respectively,  of total
operating  revenues,  an  increase  of  8.1%.  During  July  2000 an  audit  was
performed  on  our  contract  cargo  sales  and  services  provider.  The  audit
disclosed  that for a 15 month  period  between  January  1,  1999 and March 31,
2000 both  cash and  credit  card  sales  were  remitted  to us by our  services
provider,  even though we had  collected  for the cash sales  directly  from our
customer.  We therefore  adjusted  cargo revenue  downward  $423,000  during the
three months ended June 30, 2000.  Excluding the effect of this  adjustment,  on
the prior  comparable  period,  cargo revenue would have been $3,695,000 for the
six months ended September 30, 2000, and cargo revenue  actually  decreased from
the prior  comparable  period by 4.2%.  We believe that our cargo  revenues have
been impacted by the slowing  economy as well as the flight  cancellations  as a
result of the  terrorist  attack and the  limitations  put on cargo service as a
result of that.  This adjunct to the  passenger  business is highly  competitive
and  depends  heavily on aircraft  scheduling,  alternate  competitive  means of
same day delivery service and schedule reliability.

       Other  revenues,   comprised  principally  of  interline  handling  fees,
liquor sales and excess  baggage fees, and totaled  $1,312,000  and  $1,248,000,
or .5% of total  operating  revenues for each of the six months ended  September
30, 2001 and 2000, respectively, an increase of 5.1%

Operating Expenses

       Operating expenses include those related to flight  operations,  aircraft
and  traffic   servicing,   maintenance,   promotion  and  sales,   general  and
administrative  and  depreciation  and  amortization.  Total operating  expenses
were  $226,047,000  and $187,925,000 for the six months ended September 30, 2001
and  2000 and  represented  94.5%  and  77.1% of  revenue,  respectively.  Total
operating  expenses for the three months ended  September 30, 2001 and 2000 were
$114,036,000  and  $100,490,000  and  represented  98.3% and  76.7% of  revenue,
respectively.  Operating  expenses  increased as a percentage of revenue  during
the three and six months ended  September  30, 2001 as a result of the 11.4% and
1.9% decrease in passenger revenues,  respectively,  associated with the slowing
economy and the  September 11 terrorist  attacks.  For a discussion  of steps we
have  taken to  reduce  our  expenses  as a result  of the  September  11,  2001
terrorist  attacks,  see  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations - Liquidity and Capital Resources.

       Flight  Operations.   Flight  operations  expenses  of  $100,696,000  and
$84,087,000  were  42.1% and 34.5% of total  revenue  for the six  months  ended
September  30,  2001 and  2000,  respectively.  Flight  operations  expenses  of
$50,959,000  and  $44,456,000  were  43.9%  and 33.9% of total  revenue  for the
three  months  ended   September  30,  2001  and  2000,   respectively.   Flight
operations  expenses  include all expenses  related directly to the operation of
the aircraft  including  fuel,  lease and insurance  expenses,  pilot and flight
attendant  compensation,  in-flight catering,  crew overnight  expenses,  flight
dispatch  and flight  operations  administrative  expenses.  Included  in flight
operations   expenses  during  the  six  months  ended  September  30,  2001  is
approximately $1,743,000 for Airbus training and related travel expenses.

       Aircraft  fuel expenses  include both the direct cost of fuel,  including
taxes,  as well as the  cost of  delivering  fuel  into the  aircraft.  Aircraft
fuel expense of $35,136,000  for  36,894,000  gallons used and  $32,727,000  for
32,695,000 gallons used resulted in an average fuel cost of 95.2(cent)and $1 per
gallon,  for the six months  ended  September  30, 2001 and 2000,  respectively.
Aircraft  fuel expense  represented  34.9% and 38.9% of total flight  operations
expenses  and  14.7%  and  13.4%  of  total  revenue  for the six  months  ended
September   30,  2001  and  2000,   respectively.   Aircraft   fuel  expense  of
$17,502,000 for 18,687,000  gallons used and $18,190,000 for 16,995,000  gallons
used resulted in an average fuel expense of 93.7(cent)and $1.07 per gallon for
the three months ended September 30, 2001 and 2000, respectively. Aircraft fuel
expenses represented 34.4% and 40.9% of total flight operations expenses for
the three months ended September  30,  2001 and 2000,  and 15.1% and 13.9% of
total revenue,  respectively.  Fuel prices are subject to change weekly as we do
not purchase  supplies in advance for inventory.  Fuel  consumption  for the six
months  ended  September  30,  2001 and 2000  averaged  795 and 800  gallons per
block  hour,   respectively.   Fuel  consumption  for  the  three  months  ended
September  30,  2001 and 2000  averaged  786 and 816  gallons  per  block  hour,
respectively.  Fuel consumption  decreased  from the prior  comparable  periods
because  of a  decrease  in our load  factors,  the more fuel  efficient  Airbus
aircraft added to our fleet,  and a newly  developed fuel  conservation  program
implemented  in August 2001.  During the six months ended  September 30, 2000, a
major  competitor  directed  passengers  to us  because  of an  increase  in the
number of delays and  cancellations  that airline  experienced.  Because of this
we increased the speeds we flew our aircraft to mitigate  flight  delays,  which
increased our fuel burn rate.

       Aircraft  lease  expenses  totaled  $32,442,000  (13.6% of total revenue)
and  $29,903,000  (12.3% of total  revenue) for the six months  ended  September
30, 2001 and 2000,  respectively,  an increase of 8.5%.  Aircraft lease expenses
totaled  $16,124,000  (13.9% of total revenue) and  $15,135,000  (11.6% of total
revenue) for the three months ended  September 30, 2001 and 2000,  respectively,
an  increase  of  6.5%.  The  increase  is  largely  due to an  increase  in the
average  number  of  aircraft  to 26.3 from 24,  or 9.6%,  during  the six month
period  ended  September  30, 2001  compared to the same period in 2000.  During
the six months  ended  September  30,  2001,  to  minimize  the number of flight
cancellations  while our aircraft were being repaired  following hail damage, we
incurred  short-term  lease  expenses of  $630,000  for  aircraft  to  partially
replace the  damaged.  During the six months  ended  September  30, 2001 we also
added our first three  purchased  Airbus  aircraft to our fleet.  These aircraft
do not have lease expenses associated with them.

      Aircraft insurance expenses totaled $1,845,000 (.8% of total revenue) for
the six months ended September 30, 2001. Aircraft insurance expenses for the six
months ended September 30, 2000 were $1,616,000 (.7% of total revenue).
Aircraft insurance expenses were .12(cent) and .11(cent)per RPM for the six
months ended September 30, 2001 and 2000, respectively.  Aircraft insurance
expenses totaled $985,000 (.9% of total revenue)for the three months ended
September 30, 2001.  Aircraft insurance expenses for the three months ended
September 30, 2000 were $814,000 (.6% of total revenue). Aircraft insurance
expenses were .13(cent)and .11(cent)per RPM for the three months ended
September 30, 2001 and 2000, respectively.  Aircraft insurance expenses during
the three and six month periods ended September 30, 2001 have not been fully
impacted by the increases to hull and liability insurance as a result of the
terrorist attacks on September 11, 2001.  These expenses will show a significant
increase beginning in the quarter ending December 31, 2001.  The Act allows the
Secretary of Transportation to reimburse airlines for a period of up to 180
days after enactment of the Act for the incremental increases in insurance
premiums as a result of the September 11, 2001 terrorist attacks.

       Pilot and flight  attendant  salaries  before  payroll taxes and benefits
totaled  $16,185,000 and  $10,320,000 or 6.9% and 4.3% of passenger  revenue for
the six months ended  September 30, 2001 and 2000,  an increase of 56.8%.  Pilot
and  flight  attendant  salaries  before  payroll  taxes  and  benefits  totaled
$8,407,000  and  $5,399,000 or 7.4% and 4.2% of passenger  revenue for the three
months  ended  September  30, 2001 and 2000,  an increase of 55.7%.  In November
1998, our pilots voted to be represented by an independent  union,  the Frontier
Airline  Pilots  Association.  The first  bargaining  agreement  for the pilots,
which has a 5-year term,  was ratified  and made  effective in May 2000.  In May
2001,  we agreed to  reconsider  the current  rates of pay under our  collective
bargaining  agreement  with our  pilots.  During  the past year,  several  pilot
unions at other air  carriers  received  wage  increases  which caused our pilot
salaries to be  substantially  below  those paid by certain of our  competitors.
We  submitted  a revised  pilot pay  proposal  to the  Frontier  Airline  Pilots
Association,  and its members  accepted this proposal and was made effective May
2001.  Pilot and flight attendant  compensation  also increased as a result of a
9.6%  increase  in the average  number of  aircraft  in service,  an increase of
13.7% in block hours,  a general  wage  increase in flight  attendant  salaries,
and  additional  crew required to replace those who were  attending  training on
the Airbus equipment.

       Aircraft and Traffic  Servicing.  Aircraft and traffic servicing expenses
were  $35,801,000  and  $28,489,000  (an  increase  of 25.7%) for the six months
ended September 30, 2001 and 2000,  respectively,  and represented 15% and 11.7%
of total revenue.  Aircraft and traffic servicing  expenses were $17,955,000 and
$14,841,000  (an increase of 21%) for the three months ended  September 30, 2001
and 2000,  respectively,  and  represented  15.5%  and  11.3% of total  revenue.
Aircraft  and  traffic  servicing  expenses  include  all  expenses  incurred at
airports  including  landing fees,  facilities  rental,  station  labor,  ground
handling  expenses,  and  interrupted  trip expenses  associated with delayed or
cancelled  flights.   Interrupted  trip  expenses  are  amounts  paid  to  other
airlines  to  reaccomodate   passengers  as  well  as  hotel,   meal  and  other
incidental  expenses.  During the six  months  ended  September  30,  2001,  our
departures  increased to 20,920 from 18,901 for the six months  ended  September
30, 2000,  or 10.7%.  Aircraft and traffic  servicing  expenses  were $1,711 per
departure  for the six months  ended  September  30,  2001 as compared to $1,507
per  departure  for the six months ended  September  30, 2000, or an increase of
$204 per  departure.  During the three months  ended  September  30,  2001,  our
departures  increased  to  10,730  from  9,772 or  9.8%.  Aircraft  and  traffic
servicing  expenses  were  $1,673  per  departure  for the  three  months  ended
September  30,  2001 as compared to $1,519 per  departure  for the three  months
ended  September  30, 2000, or an increase of $154 per  departure.  Aircraft and
traffic  servicing  expenses  increased as a result of expenses  associated with
deicing  in April  2001 as a result of an  unusual  spring  blizzard,  a general
wage rate  increase,  and an increase in  interrupted  trip expenses as a result
of the number of flight  cancellations  related to the  aircraft  out of service
for  repair  of  hail  damage.  Additionally,   due  to  the  number  of  flight
cancellations  as a result of these weather  conditions as well as the September
11 terrorist  attacks,  the number of departures  were less than we had planned,
which  caused  our fixed  costs to be  spread  over  fewer  departures  and,  we
believe,  distorted  our  expenses  per  departure  for the three and six months
ended September 30, 2001.

       Maintenance.  Maintenance  expenses of $38,364,000 and  $32,591,000  were
16% and 13.4% of total  revenue for the six months ended  September 30, 2001 and
2000,  respectively.  Maintenance  expenses of $20,017,000 and $18,200,000  were
17.3% and 14% of total  revenue for the three  months ended  September  30, 2001
and 2000,  respectively.  These include all labor,  parts and supplies  expenses
related to the  maintenance of the aircraft.  Routine  maintenance is charged to
maintenance   expense  as  incurred  while  major  engine  overhauls  and  heavy
maintenance  check  expense is accrued  monthly  with  variances  from  accruals
recognized  at the time of the  check.  Maintenance  cost per block hour for the
six months ended  September 30, 2001 and 2000 were $826 and $798,  respectively.
Maintenance  costs per block hour  increased  as a result of hail damage to five
of our aircraft  during the six months ended  September  30, 2001,  estimated at
$491,000  ($11 per block hour),  excluding  in house  labor,  and a general wage
rate increase  effective  April 2001.  During the six months ended September 30,
2001, we incurred  approximately  $881,000 for Airbus  training or $19 per block
hour.  Additionally,  due to the number of flight  cancellations  as a result of
these  weather  conditions as well as the  September 11 terrorist  attacks,  the
number of block  hours  were less than we had  planned,  which  caused our fixed
costs to be spread over fewer block  hours and, we believe,  distorted  our cost
per block  hour for the  quarter.  During  the six months  ended  September  30,
2000, we performed  heavy  maintenance  checks on two of our leased aircraft for
which we were  reimbursed  by the  aircraft  owner,  thereby  reducing our labor
costs  by  $601,000,  or $15 per  block  hour.  We did  not  perform  any  heavy
maintenance  checks on our aircraft  during the six months ended  September  30,
2001. We also incurred  increased  costs in personnel,  training and information
technology  expenses  for  implementation  of new  maintenance  and  engineering
software and in preparation for the Airbus transition.

       Promotion and Sales.  Promotion and sales expenses totaled $32,911,000
and $27,821,000 and were 13.8% and 11.4% of total revenue for the six months
ended September 30, 2001 and 2000, respectively.  Promotion and sales expenses
totaled $16,386,000 and $15,359,000 and were 14.1% and 11.7% of total revenue
for the three  months ended September 30, 2001 and 2000, respectively.  These
include advertising expenses, telecommunications expenses, wages and benefits
for reservationists and reservations supervision as well as marketing management
and sales personnel, credit card fees, travel agency commissions and computer
reservations costs. During the six months ended September 30, 2001, promotion
and sales expenses per passenger increased to $19.97 compared to $18.09 for
the six months ended September 30, 2000.  Promotion and sales expenses
increased largely as a result of an increase in advertising expenses to
stimulate traffic in a slowing economy.  Additionally, we have incurred costs
associated with the start-up and promotion of our frequent flyer program as
well as the redesign of our web site.

       General and  Administrative.  General  and  administrative  expenses  for
the six  months  ended  September  30,  2001 and 2000  totaled  $13,209,000  and
$12,645,000 and were 5.5% and 5.2% of total revenue,  respectively,  an increase
of  4.5%.  General  and  administrative  expenses  for the  three  months  ended
September  30, 2001 and 2000 totaled  $5,974,000  and  $6,416,000  and were 5.2%
and 4.9% of total  revenue,  respectively,  a decrease  of 6.9%.  During the six
months ended  September 30, 2001 and 2000,  we accrued for employee  performance
bonuses  totaling  $1,559,000 and $4,293,000,  respectively,  which were .7% and
1.8%  of  total  revenue,  a  decrease  of  63.7%.  General  and  administrative
expenses  include the wages and benefits for several of our  executive  officers
and  various  other  administrative   personnel  including  legal,   accounting,
information   technology,   aircraft  procurement,   corporate   communications,
training  and  human   resources  and  other  expenses   associated  with  these
departments.  Employee  health  benefits,  accrued  vacation and bonus expenses,
general  insurance  expenses  including  worker's  compensation,  and write-offs
associated  with credit  card and check  fraud are also  included in general and
administrative  expenses.  We  experienced  increases  in our  human  resources,
training  and  information  technology  expenses  as a result of an  increase in
employees from approximately  2,275 in September 2000 to approximately  2,500 in
September 2001, an increase of 9.9%.  Because of the increase in personnel,  our
health  insurance  benefit  expenses  and  accrued  vacation  expense  increased
accordingly.

       Depreciation and  Amortization.  Depreciation  and amortization  expenses
of $5,066,000 and $2,293,000  were  approximately  2.1% and .9% of total revenue
for the six months  ended  September  30,  2001 and 2000,  an  increase of 121%.
These  expenses  include  depreciation  of  aircraft  and  aircraft  components,
office   equipment,   ground   station   equipment   and  other  fixed   assets.
Amortization of start-up and route  development  costs are not included as these
expenses have been expensed as incurred.  Depreciation  expense  increased  over
the prior year as a result of  depreciation  expense  associated  with our first
three purchased  aircraft,  an increase in our spare parts  inventory  including
spare engines and parts for the Airbus fleet,  ground  handling  equipment,  and
computers to support new  employees as well as  replacement  computers for those
with outdated technology.

       Nonoperating   Income   (Expense).   Net   nonoperating   income  totaled
$10,326,000  for the six months ended  September 30, 2001 compared to $3,700,000
for the six months  ended  September  30,  2000.  Interest  income  decreased to
$2,647,000 from  $3,773,000  during the six months ended September 30, 2001 from
the prior  period due to a decrease  in cash  balances  as a result of cash used
for  pre-delivery  payments  for  future  purchases  of  aircraft,  spare  parts
inventories  largely for the new Airbus fleet and a decrease in interest  rates.
Interest  expense  increased to $926,000 for the six months ended  September 30,
2001  from  $35,000  as  a  result  of  interest  expense  associated  with  the
financing of the first three purchased  Airbus aircraft  received in May, August
and September 2001.

       During  the  three  months  ended   September  30,  2001,  we  recognized
$8,802,000  of a  federal  grant as a result  of the Act to  offset  direct  and
incremental  losses we  experienced  as a result  of the  terrorist  attacks  on
September 11, 2001. We received a total of  $10,118,000  in September  2001; the
remaining  $1,316,000  represents amounts received in excess of allowable direct
and  incremental  losses  incurred from September 11, 2001 to September 30, 2001
and is included as a deferred liability in our balance sheet.

       Income  Tax  Expense.   We  accrued   income  taxes  of  $9,028,000   and
$23,025,000  at 38.25% and 39% of  taxable  income  during the six months  ended
September  30,  2001 and  2000,  respectively.  During  the three  months  ended
September  30, 2001,  we recorded a $444,000  reduction to income tax expense as
a result of a review and  revision of state tax  apportionment  factors  used in
filing our amended state tax returns for 2000.

Liquidity and Capital Resources

       Our balance sheet  reflected  cash and cash  equivalents  and  short-term
investments  of  $90,698,000  and  $111,251,000  at September 30, 2001 and March
31,  2001,  respectively.  At  September  30, 2001,  total  current  assets were
$170,858,000  as  compared  to   $124,843,000  of  total  current   liabilities,
resulting in working  capital of $46,015,000.  At March 31, 2001,  total current
assets  were   $199,794,000   as  compared  to  $136,159,000  of  total  current
liabilities,  resulting in working capital of  $63,635,000.  The decrease in our
cash and  working  capital is  largely a result of cash flows used by  investing
activities,  principally  the  purchase of our first three  Airbus  aircraft and
spare parts for the new Airbus  fleet.  Cash  provided by  operating  activities
for  the  six  months  ended  September  30,  2001  was  $17,383,000.   This  is
attributable to our net income for the period,  decreases in trade  receivables,
increases in depreciation and  amortization,  and accrued  maintenance  expense,
offset by increases in restricted investments,  security,  maintenance and other
deposits,  and decreases in accounts  payable,  air traffic  liability and other
accrued  expenses.  The  decrease  in other  accrued  expenses  was  offset as a
result of the  deferral  of payment  permitted  by the Act of excise and payroll
taxes totaling $1,980,000 and $847,000, respectively, as of September 30, 2001.

       Cash  provided  by  operating   activities   for  the  six  months  ended
September  30,  2000 was  $51,264,000.  This is  attributable  to our net income
for the period,  increases in air traffic  liability,  other  accrued  expenses,
income taxes payable,  and accrued maintenance  expense,  offset by increases in
trade receivables,  security,  maintenance and other deposits,  prepaid expenses
and inventories, and a decrease in accounts payable.

       Cash used by  investing  activities  for the six months  ended  September
30, 2001 was $110,046,000.  Net aircraft lease and purchase  deposits  decreased
by  $4,132,000  as  pre-delivery  payments  were  applied to the purchase of our
first three Airbus  aircraft,  reducing the amount of  pre-delivery  payments as
of  September  30,  2001.  During the six months ended  September  30, 2001,  we
converted two purchase  options into firmly ordered  Airbus A319  aircraft,  and
advanced  their delivery  dates from the third and fourth  calendar  quarters of
2004 to May and June  2002,  which  required  deposits  of  $9,203,000.  We also
used  $115,110,000  for the purchase of our first three  Airbus  aircraft and to
purchase rotable  aircraft  components to support the Airbus fleet, as well as a
spare  engine  for  the  Boeing  fleet,   leasehold  improvements  for  the  new
reservations  center,  computer  software for the new maintenance and accounting
systems,  and other  general  equipment  purchases.  During the six months ended
September  30, 2000, we used  $7,121,000  for capital  expenditures  for rotable
aircraft components,  maintenance  equipment and tools, aircraft leasehold costs
and  improvements,  computer  equipment  and  software for  enhancements  to our
internet  booking site,  our  reservation  system and a replacement  maintenance
system.

       Cash  provided  by  financing   activities   for  the  six  months  ended
September  30,  2001 and  2000 was  $72,110,000  and  $1,755,000,  respectively.
During the six months ended  September 30, 2001 and 2000,  we received  $571,000
and  $1,810,000,  respectively,  from the exercise of common  stock  options and
warrants.   During  the  six  months  ended  September  30,  2001,  we  borrowed
$72,000,000 to finance the purchase of our first three Airbus aircraft.

       As of October  31,  2001,  we lease two Airbus 319 type  aircraft  and 24
Boeing 737 type aircraft under operating  leases with  expiration  dates ranging
from 2002 to 2013.  Under these  leases,  we are required to make cash  security
deposits  or issue  letters  of  credit  to secure  our  lease  obligations.  At
September  30,  2001,  we had made cash  security  deposits and had arranged for
issuance   of   letters   of  credit   totaling   $4,881,000   and   $9,283,000,
respectively.  Accordingly,  our  restricted  cash balance  includes  $9,283,000
that  collateralize  the outstanding  letters of credit.  Additionally,  we make
deposits  for  maintenance  of these  aircraft.  At  September  30 and March 31,
2001,  we  had  made  maintenance   deposits  of  $48,980,000  and  $42,255,000,
respectively.

       We have  adopted a fleet  replacement  plan to phase out our  Boeing  737
aircraft  and  replace  them  with  a  combination   of  Airbus  A319  and  A318
aircraft.  In  March  2000,  we  entered  into  an  agreement,  as  subsequently
amended,  to  purchase  up to 29 new  Airbus  aircraft.  We have  agreed to firm
purchases  of 14 of  these  aircraft,  and have  options  to  purchase  up to an
additional  15 aircraft.  During the six months  ended  September  30, 2001,  we
took  delivery of the first  three  purchased  aircraft.  Under the terms of the
purchase  agreement,  we are required to make  scheduled  pre-delivery  payments
for  these   aircraft.   These   payments   are   non-refundable   with  certain
exceptions.  As of September  30,  2001,  we had made  pre-delivery  payments on
future  deliveries  totaling  $23,455,000  to secure  these  aircraft and option
aircraft.  As a  complement  to this  purchase,  in April and May 2000 we signed
two  agreements  to  lease  16 new  Airbus  aircraft,  two  of  which  had  been
delivered to us as of  September  30, 2001.  As of  September  30, 2001,  we had
made cash  security  deposits  on the  remaining  14 aircraft we agreed to lease
and had  arranged  for  issuance of letters of credit  totaling  $1,224,000  and
$2,677,000,  respectively,  to secure these  leases.  The  aggregate  additional
amounts  due  under  this  purchase   commitment   and  estimated   amounts  for
buyer-furnished  equipment  and spare  parts for both the  purchased  and leased
aircraft was  approximately  $331,300,000 as of September 30, 2001. We expect to
be  operating  up to 37  purchased  and  leased  Airbus  aircraft  by the  first
quarter of  calendar  2005.  As  discussed  below,  we have  secured a financing
commitment  for the first  three  purchased  Airbus A319  aircraft.  To complete
the  purchase  of the  remaining  aircraft we must  secure  additional  aircraft
financing. We are exploring various financing alternatives,  including,  but not
limited to, domestic and foreign bank  financing,  public debt financing such as
enhanced equipment trust  certificates,  and leveraged lease  arrangements.  The
additional  amount of financing  required  will depend on the number of aircraft
purchase  options we exercise  and the amount of cash  generated  by  operations
prior to delivery of the  aircraft.  While we believe that such  financing  will
be  available  to us,  there can be no  assurance,  particularly  in view of the
September  11  terrorist   attacks,   that  financing  will  be  available  when
required,  or on  acceptable  terms.  The  inability  to secure  such  financing
could result in delays in or our inability to take  delivery of Airbus  aircraft
we have agreed to purchase, which would have a material adverse effect on us.

       Additionally,   in  order  to  maximize  the   efficiency  of  our  fleet
replacement  plan,  we will continue to endeavor to return  certain  leased B737
aircraft  to their  owners on dates  other than the  currently  scheduled  lease
expiration  dates for these  aircraft.  We returned one Boeing  aircraft  during
the six months  ended  September  30, 2001.  If we are unable to negotiate  such
different return dates with the aircraft  owners,  or sublease these aircraft to
third  parties,  we may incur  additional  expense,  which  may have a  material
adverse effect on us.

       In May  2001,  we  entered  into  a  credit  agreement  to  borrow  up to
$72,000,000 for the purchase of three Airbus  aircraft with a maximum  borrowing
of  $24,000,000  per  aircraft.  Each aircraft loan has a term of 120 months and
is  payable  in equal  monthly  installments,  including  interest,  payable  in
arrears.  The loans are secured by the  aircraft.  As of September  30, 2001, we
had borrowed  $72,000,000 for purchase of the three Airbus  aircraft.  Each loan
provides for monthly  principal and interest  payments  ranging from $205,579 to
$218,109,  bears  interest  with rates  ranging  from 6.05% to 6.71%,  averaging
6.43%  for the  three  aircraft  loans,  with  maturities  in May,  August,  and
September  2011,  and has a balloon  payment of $10,200,000 at the expiration of
the loan term.

Air Transportation Safety and Stabilization Act

       As a result of the  September  11, 2001  terrorist  attacks on the United
States,  on September 22, 2001  President  Bush signed the Act into law. The Act
includes  for all  U.S.  airlines  and air  cargo  carriers  the  following  key
provisions:  (i) $5  billion  in cash  compensation,  of which  $4.5  billion is
available  to  commercial  passenger  airlines  and is  allocated  based  on the
lesser of each  airline's  share of available  seat miles during  August 2001 or
the direct and  incremental  losses  (including  lost revenues)  incurred by the
airline  from  September  11, 2001 through  December  31, 2001;  (ii) subject to
certain  conditions the availability of up to $10 billion in federal  government
guarantees  of  certain  loans  made to air  carriers  for  which  credit is not
reasonably  available as determined by a newly  established  Air  Transportation
Stabilization  Board;  (iii) the authority of the Secretary of Transportation to
reimburse  air carriers  (which  authority  expires 180 days after the enactment
of the Act) for  increases  in the cost of war risk  insurance  over the premium
in effect for the period  September 4, 2001 to September  10, 2001;  (iv) at the
discretion  of the  Secretary of  Transportation,  a $100  million  limit on the
liability  of any  air  carrier  to  third  parties  with  respect  to  acts  of
terrorism  committed  on or to such  air  carrier  during  the  180  day  period
following  enactment of the Act;  and (v) the  extension of the due date for the
payment by air carriers of certain payroll and excise taxes until November 15, 2001
and January 15, 2002, respectively.

       The Company  anticipates  receiving up to approximately  $20,200,000 from
the $5 billion in  authorized  grants,  of which  $10,118,000  was  received  in
September  2001.  The  Company  recognized  $8,802,000  of the grant  during the
quarter ended  September 30, 2001 which is included in  nonoperating  income and
expenses;  the remaining  $1,316,000  represents  amounts  received in excess of
allowable  direct and  incremental  losses  incurred from  September 11, 2001 to
September  30,  2001 and is  included  as a deferred  liability  in the  balance
sheet.  The  Company's  entitlement  to receive the entire amount of the maximum
grant  payable  to it will  depend  on its  operating  results  for  the  period
September  11, 2001 through  December  31,  2001,  compared to those it expected
just prior to  September  11, 2001 to achieve for the same  period. To date the
Company has deferred the payment of $847,000 and $1,980,000 in payroll and excise
taxes until November 15, 2001 and January 15, 2002, respectively, as permitted
by the Act.

       We plan  to  apply  under  the Act for a  guaranteed  loan.  We have  not
determined  the  nature  or  amount  of our  application.  A newly  created  Air
Transportation  Stabilization  Board  will have  authority  to set all terms and
conditions,  including  determining  the  amounts and  recipients  of the loans.
The Act also  allows  the  government  to take an equity  stake in the  airlines
receiving  federal loan  guarantees  as  collateral.  We may also be required to
obtain  concessions  from  our key  constituents,  including  aircraft  lessors,
vendors and other  creditors.  There can be no  assurance  that our  application
will be  successful;  however,  we  believe  that  our  inability  to  secure  a
guaranteed  loan  under  the  provision  of the Act  would  not have a  material
adverse effect on our business or operations.

Impact of the  September 11, 2001  Terrorist  Attacks,  Our Response,  and Third
and Fourth Quarter Outlook

       Among  the  effects  experienced  by  us  from  the  September  11,  2001
terrorist  attacks  have been  significant  flight  disruption  costs caused the
FAA's temporary  grounding of the U.S. airline  industry's fleet,  significantly
increased  security and other costs,  significantly  higher  ticket  refunds and
significantly   reduced  load   factors.   Further   terrorist   attacks   using
commercial  aircraft in flight could  result in another  grounding of our fleet,
and could  result in  additional  reductions  in load factor and  yields,  along
with  increased   ticket  refund,   security  and  other  costs.   In  addition,
terrorist  attacks not involving  commercial  aircraft,  or the general increase
in  hostilities  relating  to  reprisals  against  terrorist   organizations  or
otherwise,  and the  public's  reaction  to the  crash of an  American  Airlines
A-300  aircraft  in New  York  City  on  November  12,  2001,  could  result  in
decreased  load factors and yields for  airlines,  including  us, and  increased
costs.

       Immediately  following  the  terrorist  attacks on September 11, 2001, we
took several  steps to reduce our  operating  expenses.  We reduced our capacity
by approximately  20%.  However,  current capacity is still  approximately  9.7%
greater  than  capacity  for the  comparable  period last year.  We also reduced
our costs by offering  voluntary leaves of absences and early  retirements,  and
by furloughs,  totaling  approximately  390 employees;  by reducing salaries for
company  officers  by  20 to  40%,  and  reducing  the  salaries  of  650  other
employees  by  three  to  15%;  by  eliminating  food  service  provided  on our
flights;  and by  deferring  nonessential  capital  spending  and  significantly
reducing all nonessential  operating  expenses.  We have also been  experiencing
lower fuel  prices  since the end of  September  2001.  These cost  savings  are
expected  to  be  offset  by  increased  security  costs  and  higher  insurance
premiums.   As  of  November  9,  2001,  we  have  recalled   approximately  150
employees  as a  result  of the  increase  of  approximately  5.8%  in  capacity
scheduled to begin  November 15, 2001,  additional  personnel  requirements  for
enhanced  security  measures,   and  maintenance   personnel  to  provide  heavy
maintenance  checks  on the  additional  aircraft  that  will fly the  increased
schedule.  We have not altered the Airbus  delivery  schedule  and our intent is
to  continue  with the fleet  transition  plan in place prior to  September  11,
2001.

       After the events of September  11, many domestic  airlines  began working
with the FAA in order to  increase  the  security of aircraft  flight  decks.  A
variety of security  enhancements were introduced,  ranging from Level 1 through
Level 4, with  Level 4 being the most  comprehensive  of  enhancements.  We also
began  exploring  additional  security  measures and,  working with our aircraft
manufacturers  and  the  FAA,  developed  enhanced  flight  deck  door  security
measures  that are  consistent  with Level 2.  Seventeen of our Boeing  aircraft
are currently  Level 1 compliant,  and we  anticipate  that all 24 of our Boeing
aircraft  will be Level 2 compliant by  approximately  November  26,  2001.  Our
five Airbus  aircraft  will be Level 4 compliant by  approximately  December 31,
2001. In addition,  the federal  government has  established a fund by which the
participating  airlines  would be  reimbursed  for the  additional  flight  deck
security enhancements. We intend to participate in that reimbursement program.

       After  September 11, 2001, and with the subsequent  decline in the flying
public's  confidence in air travel safety and security,  we implemented  several
marketing  programs designed to assist in restoring  consumer  confidence in air
travel.   These  initiatives  have  helped  us  experience  a  slow  but  steady
increase in load  factors and booking  levels.  Some of these  initiatives  were
as follows:

o        Marketing programs that used direct mail, Internet fare sales, travel
         agent promotions and enhanced frequent flyer program benefits;
o        A community relations outreach program called Seats for Sharing that
         offered complimentary seats to eligible non-profit organizations,
         including schools and religious organizations;
o        Communication programs that included letters to various school
         administrators and employee-led visits to local schools, as well as
         increased unpaid media efforts designed to educate and inform the
         public on increased security;
o        An employee campaign that increased employee reduced rate "buddy"
         passes, designed to enable employees to encourage their friends and
         family members to fly again.

       The impact of the  terrorist  attacks  of  September  11,  2001 and their
aftermath on us and the  sufficiency  of our financial  resources to absorb that
impact will  depend on a number of factors,  including:  (i) the  magnitude  and
duration  of the  adverse  impact of the  terrorist  attacks  on the  economy in
general,  and the  airline  industry in  particular;  (ii) our ability to reduce
our operating  costs and conserve our financial  resources,  taking into account
the  increased  costs we will incur as a consequence  of the attacks,  (iii) the
higher  costs  associated  with new airline  security  directives  and any other
increased  regulation of air carriers;  (iv) the  significantly  higher costs of
aircraft   insurance   coverage  for  future  claims  caused  by  acts  of  war,
terrorism,  sabotage,  hijacking  and other  similar  perils,  and the extent to
which such  insurance  will continue to be  available;  (v) our ability to raise
additional  financing;  (vi) the price and availability of jet fuel, in light of
current industry  conditions;  and (vii) the extent of the benefits  received by
us under the Act, taking into account any challenges to and  interpretations  or
amendments of the Act or regulations issued pursuant thereto.

       During  the month of  October  2001,  our load  factor was 47.5 %, a 15.8
point  decrease  from  63.3%  for the  same  period  last  year.  Our  yield  is
estimated to be 16.74(cent)during the month of October  2001, a 2.2%  increase
over the same period last year when the yield was 16.38  cents.  At present,  we
have been able to  maintain  our yield as a result of close-in bookings and
limited fare sales  since the  September  11,  2001  terrorist  attacks.  On
October 24, 2001, we had a system-wide fare sale that ended on November 6, 2001,
which may lower our yield.

       As of November 9, 2001,  advance  booking levels are down 12.4,  8.6, and
3.4 points in November,  December,  and January,  respectively,  compared to the
same date and for the same  periods  last year.  Yields may decline in the third
and fourth fiscal quarters if our  competitors  continue to discount their fares
or we offer lower fares to boost traffic.

       At this  point,  due in part to the  lack  of  predictability  of  future
traffic  and  yields,  we are unable to fully  estimate  the impact on us of the
events of September 11, 2001 and their  consequences  and the sufficiency of our
financial resources to absorb that impact.

New Accounting Pronouncements

       In June 2001, the Financial  Accounting  Standards  Board ("FASB") issued
Statement of Financial  Accounting  Standards No. 141,  "Business  Combinations"
which  requires  the use of the  purchase  method and  eliminates  the option of
using  the   pooling-of-interests   method  of   accounting   for  all  business
combinations.   The  provisions  in  this   statement   apply  to  all  business
combinations  initiated  after  June 30,  2001,  and all  business  combinations
accounted  for using the purchase  method for which the date of  acquisition  is
July 1, 2001, or later.

       In  June  2001,  the  FASB  issued  Statement  of  Financial   Accounting
Standards  No. 142,  "Goodwill  and Other  Intangible  Assets"  (SFAS 142) which
requires that all  intangible  assets  acquired,  other than those acquired in a
business  combination,  be  initially  recognized  and  measured  based  on  the
asset's  fair  value.  We are  required  to  adopt  the  provisions  of SFAS 142
effective  January  1,  2002.  Goodwill  and  certain  identifiable   intangible
assets will not be  amortized  under SFAS 142,  but instead will be reviewed for
impairment  at  least  annually  in  accordance  with  the  provisions  of  this
statement.  This  accounting  pronouncement  presently has no impact on us as we
do not have any intangible assets on our balance sheet.

       In  June  2001,  the  FASB  issued  Statement  of  Financial   Accounting
Standards  No. 143 (SFAS  143),  Accounting  for Asset  Retirement  Obligations,
which addresses  financial  accounting and reporting for obligations  associated
with the  retirement  of tangible  long-lived  assets and the  associated  asset
retirement  costs.  The standard  applies to legal  obligations  associated with
the  retirement  of  long-lived   assets  that  result  from  the   acquisition,
construction,  development  and/or  normal use of the asset.  SFAS 143  requires
that the fair  value  of a  liability  for an  asset  retirement  obligation  be
recognized  in the period in which it is  incurred if a  reasonable  estimate of
fair  value  can be  made.  The  fair  value  of the  liability  is added to the
carrying amount of the associated  asset and this additional  carrying amount is
depreciated  over the life of the asset.  The  liability  is accreted at the end
of each period  through  charges to  operating  expense.  If the  obligation  is
settled for other than the carrying  amount of the liability,  we will recognize
a gain or loss on  settlement.  We do not  expect the  impact of  adopting  SFAS
143 to be significant.

       In October  2001,  the FASB issued  Statement of Financial  Standards No.
144,  Accounting  for the  Impairment  or Disposal of Long-Lived  Assets,  which
addressed  financial  accounting and reporting for the impairment or disposal of
long-lived  assets.  While  Statement  No. 144  supersedes  Statement  No.  121,
Accounting  for the Impairment of Long-Lived  Assets and for  Long-Lived  Assets
to be  Disposed  of,  it  retains  many of the  fundamental  provisions  of that
Statement.  Statement  No. 144 also  supersedes  the  accounting  and  reporting
provisions    of   APB    Opinion   No.   30,    Reporting    the   Results   of
Operations-Reporting  the Effects of  Disposal  of A Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions,  for
the  disposal  of a  segment  of a  business.  We do not  expect  the  impact of
adopting SFAS No. 144 to be significant.

Item 3:  Quantitative and Qualitative Disclosures About Market Risk

       The  risk  inherent  in  our  market  risk  sensitive   position  is  the
potential  loss  arising  from  an  adverse  change  in the  price  of  fuel  as
described  below.  The sensitivity  analysis  presented does not consider either
the effect  that such an adverse  change may have on overall  economic  activity
or  additional  action  management  may take to mitigate  our exposure to such a
change.  Actual  results may differ from the amounts  disclosed.  At the present
time,  we do not utilize fuel price hedging  instruments  to reduce our exposure
to fluctuations in fuel prices.

       Our  earnings are  affected by changes in the price and  availability  of
aircraft fuel.  Market risk is estimated as a hypothetical  10 percent  increase
in the  average  cost per  gallon of fuel for the year  ended  March  31,  2001.
Based on fiscal  year 2001  actual  fuel  usage,  such an  increase  would  have
resulted in an increase to aircraft  fuel  expense of  approximately  $7,104,000
in fiscal year 2001.  Comparatively,  based on  projected  fiscal year 2002 fuel
usage,  such an increase  would  result in an increase to aircraft  fuel expense
of  approximately  $8,608,000  in fiscal year 2002.  The increase in exposure to
fuel  price  fluctuations  in  fiscal  year 2002 is due to the  increase  of our
average  aircraft  fleet size  during the year ended March 31,  2001,  projected
increases  to our  fleet  during  the year  ended  March  31,  2002 and  related
gallons purchased.

       Our average  cost per gallon of fuel for the six months  ended  September
30,  2001  decreased  4.9%  from  the  average  cost  for the six  months  ended
September  30,  2000.  See  "Management's  Discussion  and Analysis of Financial
Condition and Results of Operations - Operating Expenses."






                           PART II. OTHER INFORMATION

Item 4:           Submission of Matters to a Vote of Security Holders

              Our annual meeting of shareholders was held on September 6, 2001,
              at which a quorum for the transaction of business was present.
              Two matters were voted upon, as described below.

              Members of the Board of  Directors  elected  at the  meeting  were
              Samuel  D.  Addoms,  D. Dale  Browning,  Paul S.  Dempsey,  Jeff S.
              Potter,  William B.  McNamara,  B. Larae  Orullian,  , and James B.
              Upchurch.  The votes cast with  respect  to each  nominee  were as
              follows:

                  23,537,003 "For" Mr. Addoms;   1,273,586  "Withheld"
                  24,614,121 "For" Mr. Browning;   196,468  "Withheld"
                  24,614,220 "For" Mr. Dempsey;    196,369  "Withheld"
                  24,613,140 "For" Mr. Potter      197,449  "Withheld"
                  24,614,584 "For" Mr. McNamara;   196,005  "Withheld"
                  24,614,590 "For" Ms. Orullian;   195,999  "Withheld"
                  24,614,115 "For" Mr. Upchurch;   196,474  "Withheld"

              The shareholders of the Company approved an amendment to our
              Articles of Incorporation increasing the number of authorized
              shares of our common stock, no par value per share, from
              40,000,000 shares to 100,000,000 shares as follows:

                  20,388,815 "For"     4,365,401 "Against"   56,373 "Abstain"

Item 6:       Exhibits and Reports on Form 8-K


Exhibit
Numbers
- -------

(a)      Exhibits


3.1      Amended and Restated Articles of Incorporation. (1)

10.61     Codeshare Agreement between Mesa Airlines, Inc. and Frontier
          Airlines, Inc. (1)

(1)      Filed herewith.

         (b)      Reports on Form 8-K

                  We filed a report on Form 8-K/A on July 11, 2001 that updated
                  disclosure of our fleet transition plan.






                                   SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                                     FRONTIER AIRLINES, INC.


Date:  November 14, 2001                             By: /s/ Paul H. Tate
                                                        ------------------------
                                                     Paul H. Tate, Vice
                                                     President and
                                                     Chief Financial Officer

Date:  November 14, 2001                             By: /s/ Elissa A. Potucek
                                                        ------------------------
                                                     Elissa A. Potucek, Vice
                                                     President, Controller,
                                                     Treasurer and Principal
                                                     Accounting Officer

EX-3.1 BY-LAWS, ARTI

                                                                     Exhibit 3.1

                              AMENDED AND RESTATED

                           ARTICLES OF INCORPORATION

                                       OF

                            FRONTIER AIRLINES, INC.



         Pursuant to the provisions of the Colorado  Business  Corporation  Act,
Frontier  Airlines,  Inc. (the  "Corporation")  adopts the following Amended and
Restated  Articles of  Incorporation.  These  articles  correctly  set forth the
provisions  of the Articles of  Incorporation,  as amended,  and  supersede  the
original Articles of Incorporation and all amendments thereto.

1.       Name

         The name of the Corporation is Frontier Airlines, Inc.

2.       Capital; Shareholders

         a.       Authorized  Capital. The total  number of shares that the
                  Corporation will  have  authority to issue is one-hundred-one
                  million (101,000,000), of which one-hundred million
                  (100,000,000)shares will be common stock, without par value
                  and one million (1,000,000) shares will be preferred stock
                  without par value.

         b.       Common  Stock. Each  holder of common  stock is  entitled
                  to one vote for each share of common stock held on all matters
                  as to which holders of common stock are entitled to vote.
                  Except for and subject to those preferences, rights, and
                  privileges expressly granted to the holders of preferred
                  stock, and except as may be provided by the laws of the
                  State of Colorado, the holders of common stock have
                  exclusively all other rights of stockholders of the
                  Corporation, including, but not by way of limitation, (i) the
                  right to receive dividends, when, as and if declared by the
                  board of directors out of assets lawfully available therefore,
                  and (ii), in the event of any distribution of assets upon the
                  dissolution and liquidation of the  Corporation,  the right to
                  receive   ratably  and  equally  all  of  the  assets  of  the
                  Corporation  remaining  after the  payment  to the  holders of
                  preferred  stock of the specific  amounts,  if any, which they
                  are  entitled  to  receive  as  may  be  provided   herein  or
                  pursuant hereto.

         c.       Preferred Stock. The board of directors of the Corporation
                  is authorized to provide by resolution or resolutions  for the
                  issuance of the shares of  preferred  stock as a class or in a
                  series  and to  establish  from  time to time  the  number  of
                  shares  to be  included  in each such  series,  and to fix the
                  designation,  powers,  preferences,  and  rights of the shares
                  of the class or of each such  series  and the  qualifications,
                  limitations  and  restrictions  thereof.  The authority of the
                  board of  directors  with  respect to the class or each series
                  includes,   but  is  not  limited  to,  determination  of  the
                  following:

                  i.       The  number of shares constituting any series and the
                           distinctive designation of that series;

                  ii.      The dividend rate on the shares of the class or of
                           any  series, whether dividends shall be cumulative
                           and, if so, from which date or dates, and the
                           relative rights of priority, if any, of payment of
                           dividends on shares of the class or of that series;

                  iii.     Whether the class or any series shall have voting
                           rights, in addition to the  voting rights provided
                           by law and, if so, the terms of such voting rights;

                  iv.      Whether the class or any series shall have conversion
                           privileges and, if so, the terms and conditions of
                           such conversion, including  provisions for adjustment
                           of the conversion  rate in such events as the board
                           of directors shall determine;

                  v.       Whether or not the shares of the class or of any
                           series  shall be redeemable and, if so, the terms and
                           conditions of such  redemption, including the date or
                           dates upon or after which they shall be redeemable
                           and the amount per share payable in case of
                           redemption, which amount may vary under different
                           conditions and at different redemption dates;

                  vi.      Whether the class or any series shall have a sinking
                           fund for the redemption or purchase of shares of the
                           class or that series and, if so, the terms and amount
                           of such sinking fund;

                  vii.     The rights of the shares of the class or of any
                           series in the event of voluntary or involuntary
                           dissolution or windingup of the Corporation and the
                           relative rights of priority, if any, of payment of
                           shares of the class or of that series; and

                  viii.    Any other powers, preferences, rights,
                           qualifications, limitations, and restrictions of the
                           class or of any series.

         d.       Quorum; Manner  of  Acting. At all meetings of share-
                  holders, a majority of the shares entitled to vote at such
                  meeting represented in person or by proxy, shall constitute a
                  quorum.  At any meeting at which a quorum is present the
                  affirmative vote of a majority of the shares represented at
                  such meeting and entitled to vote on the subject matter shall
                  be the act of the shareholders, unless the vote of greater
                  proportion or number is required by the laws of Colorado and
                  except that in each case where the Colorado Corporation Code
                  requires a two-thirds vote of all of the outstanding shares of
                  the Corporation entitled to vote, and such required vote is
                  hereby reduced, as permitted by such vote, to a majority of
                  all of the outstanding shares of the Corporation entitled to
                  vote on the subject matter thereof.

3.       Preemptive Rights

         No  shareholder  of  the  Corporation  shall  have  any  preemptive  or
similar  right to acquire or subscribe for any  additional  unissued or treasury
shares of stock,  or other  securities  of any  class,  or rights,  warrants  or
options to purchase stock or scrip, or securities of any kind  convertible  into
stock or carrying stock purchase warrants or privileges.

4.       Board of Directors

         a.       Initial  Board.  The initial board of directors of the
                  Corporation shall consist of three  persons and the names and
                  addresses of such persons, who are to serve as directors until
                  the first annual meeting of the shareholders or until  their
                  successors are elected and shall qualify, are as follows:

                  M. C.  Lund               Hanger 9, Box B-5
                                            7375 South Peoria Street
                                            Englewood, Colorado  80112

                  Samuel D. Addoms          Hanger 9, Box B-5
                                            7375 South Peoria Street
                                            Englewood, Colorado  80112

                  Arthur T. Voss            Hanger 9, Box B-5
                                            7375 South Peoria Street
                                            Englewood, Colorado  80012

         b.       Number  of  Directors.  The number of directors of the
                  Corporation shall be fixed and may be altered from time to
                  time as provided in the bylaws of the Corporation.

5.       Limitation on Liability

        To the fullest  extent  permitted by the Colorado  Corporation  Code, as
the same  exists or may  hereafter  be amended,  a director  of the  Corporation
shall  not  be  liable  to the  Corporation  or its  shareholders  for  monetary
damages  for  breach  of   fiduciary   duty  as  a   director.   Any  repeal  or
modification  of the Article by the  shareholders  of the  Corporation  shall be
prospective  only and shall not  adversely  affect any right or  protection of a
director   of  the   Corporation   existing  at  the  time  of  such  repeal  or
modification.

6.       Offices

         a.     Registered  Agent. The address of the initial registered
                office of the Corporation is 1400 Glenarm Place, Denver,
                Colorado 80202. The name of its initial registered agent at such
                address is The Prentice-Hall Corporation.

         b.     Principal Office.  The address of the Corporation's
                initial principal office is 12015 East 46th Avenue, Denver,
                Colorado 80239.

7.       Incorporator

         The name and address of the incorporator is:

                  Nancy M. Garrett
                  1700 Lincoln Street, Suite 4100
                  Denver, Colorado  80203


                                                     FRONTIER AIRLINES, INC.


                                                     By:/s/Arthur T. Voss
                                Its:  Secretary 

EX-10.61 MATERIAL CO

                                  CODESHARE AGREEMENT

         This Codeshare Agreement (the "Agreement"), dated as of September 4,
2001, is entered into by and between Frontier Airlines, Inc. ("Frontier"), a
corporation organized under the laws of Colorado, and Mesa Airlines, Inc.
("Mesa"), a corporation organized under the laws of Nevada.

         WHEREAS, Frontier wishes to expand its route network to offer new
         competitive services in additional markets, and to enhance Frontier's
         existing route network by increasing frequency of service on certain
         routes;

         WHEREAS, Mesa is an operator of regional jet aircraft;

         WHEREAS, Frontier is hub carrier at Denver;

         WHEREAS, Mesa has no services at Denver;

         WHEREAS, Mesa and Frontier wish to collaborate to provide new services,
         where neither Frontier nor Mesa could economically and efficiently do
         so independently;

         WHEREAS,  Frontier and Mesa wish to enter into this Agreement whereby
         Mesa will carry the "F9" code on the routes identified in Annex B;

         NOW THEREFORE, In consideration of the mutual covenants and promises in
         this Agreement, Frontier and Mesa hereby agree as follows:

1.       DEFINITIONS

         1.1      Capitalized terms used in this Agreement, unless the context
                  otherwise requires or expressly provides, shall have the
                  meanings setforth in Annex A.

         1.2      It is agreed that accepted industry procedures and any
                  existing agreements relating to the interlining of passengers
                  and baggage, including those industry procedures set forth in
                  the ATA Resolution 5.65 (Interline Traffic Agreement -
                  Passengers) for carriage solely within and between the United
                  States, Canada, Puerto Rico and the U.S. Virgin Islands, shall
                  apply to the provision of air transport and the related
                  transactions contemplated by this Agreement, except to the
                  extent inconsistent or in conflict with the terms of this
                  Agreement.







2.       CODESHARE SERVICE

         2.1      The parties shall mutually designate certain flights as
                  Codeshared Flights, whereby Mesa will carry Frontier's "F9"
                  designator code on the city-pair routes identified in Annex B.

                           2.1.1    The parties shall use commercially
                                    reasonable efforts to meet the target
                                    implementation dates specified in Annex B.
                                    Provided, however, that these target dates
                                    are subject to change in light of any
                                    necessary regulatory approvals, operational
                                    constraints, and the delivery of aircraft.

                           2.1.2    Frontier shall cooperate in promptly
                                    publishing all Codeshared Flights in the
                                    Airline Guides, Reservations Systems and
                                    CRSs.

                           2.1.3    Mesa reserves the right to discontinue
                                    Codeshared Flights on any specific route,
                                    flight or schedule, and in the event of such
                                    discontinuation, Frontier shall cooperate in
                                    publishing the resulting changes in the
                                    Airline Guides, Reservations Systems and
                                    CRSs.

                           2.1.4    Mesa shall have no obligation to extend
                                    Codeshared Flights to other routes or to
                                    maintain operations on any route; no such
                                    obligation can be created by any oral
                                    statements or representations or course of
                                    dealing, but only by express written
                                    agreement.

                           2.1.5    Mesa shall have the sole and exclusive right
                                    to operate flights using the F9 code on the
                                    Mesa Exclusive Routes; provided, however,
                                    that Mesa shall have no obligation to
                                    operate flights on the Mesa Exclusive R
                                    Routes.  Mesa agrees to provide Frontier
                                    with ninety (90) days prior advance written
                                    notice of intention to provide service on
                                    any Mesa Exclusive Route.

                           2.1.6    Mesa shall have the right, but not the
                                    obligation, to operate at least fifty
                                    percent (50%) of all flights operating under
                                    the F9 code on the Mesa Minimum Service
                                    Routes specified in Annex C.


         2.2      Detailed procedures for implementing this Agreement will be set forth
                  in the procedures manual prepared by the parties in conjunction with
                  this Agreement (the "Procedures Manual").  The parties will use their
                  best commercially reasonable efforts to finalize the Procedures
                  Manual prior to program implementation.  The Procedures Manual,
                  including any amendments or supplements thereto agreed in writing
                  between the parties from time to time is incorporated by reference
                  into and made a part of this Agreement; provided, however, that in
                  the event of a conflict between a provision of this Agreement and any
                  provision of the Procedures Manual, as amended and supplemented, the
                  terms of this Agreement shall prevail.

         2.4      In the event of any flight delay or cancellation that requires a
                  Codeshared Passenger to be involuntarily rerouted or denied boarding
                  and denied boarding compensation is paid on the operating carriers
                  ticket stock or the Mesa special service ticket stock, as the case
                  may be, to such passenger, the party causing such involuntarily
                  rerouting or denied boarding shall bear all reasonable associated
                  costs arising out of its actions.  Each of the parties agrees to
                  provide seat availability, subject to reasonable capacity
                  limitations, on their respective flights in connection with vouchers
                  awarded to passengers in connection with this Section. Settlement of
                  the costs associated with the involuntary rerouting or denied
                  boarding will be conducted through the ACH and subject to ACH
                  policies and procedures.   Notwithstanding the foregoing, Frontier
                  agrees to provide customer service support in the event of a flight
                  delay or cancellation at its Customer Service Counter at Denver
                  International Airport.  In addition, baggage handling and settlement
                  of baggage handling claims shall be in accordance with existing
                  tariffs and the Trade Practice Manual of the Air Transport
                  Association or the IATA Resolutions and Recommended Practices Manual,
                  whichever is applicable.

         2.5      The parties shall use commercially reasonable efforts to coordinate
                  their service schedules and to consider schedule and route changes
                  suggested by Frontier to maximize program passengers and revenue and
                  to maximize the convenience and minimize the waiting time of
                  passengers making connections between the Codeshared Flights and
                  other flights operated by the parties; provided, however, that
                  neither party is obligated to operate specific flights or service
                  schedules and each party retains the right to determine the service
                  schedules of its own flights, including, without limitations, the
                  right to reduce flights, add new flights and discontinue flights and
                  cities or airports served.  Each party agrees to notify the other
                  party as soon as practicable, but not less than sixty (60) days
                  unless otherwise agreed to by the parties, in advance of any schedule
                  change to a Codeshared Flight or a connecting Frontier-operated
                  flight. If Frontier suspends or terminates service to a particular
                  market shall be solely responsible for transferring the reservations
                  of such passengers to other carriers or making alternative
                  arrangements. If Mesa suspends or terminates service to a particular
                  market it will pay Frontier five dollars ($5.00) per PNR to transfer
                  the reservations of such passengers to other carriers.  Frontier will
                  charge Mesa the net expense of ticketing passengers on a
                  reaccomodation basis through the ACH.

         2.6      The Conditions of Carriage of Frontier (as modified from time to
                  time) shall govern the transportation of Codeshared Passengers on the
                  Codeshared Flights, except that if there are any material differences
                  between the operating rules and procedures of Mesa, and those
                  operating rules and procedures that apply to Frontier-operated
                  flights, such material differences shall be described in the
                  Procedures Manual and Frontier shall disclose the same in its
                  Conditions of Carriage.

         2.7      The Operating Carrier has final authority and responsibility concerning the
                  operation and safety of the aircraft and its passengers.  In
                  emergencies, the parties shall adhere to the emergency procedures for
                  Codeshared Passengers set forth in the Procedures Manual.

         2.8      Upon request by Mesa, Frontier agrees to provide Mesa with ticketing,
                  gate and ground handling services at Denver International Airport and
                  stations where both carriers operate based on a "per turn" fee to be
                  agreed to by the parties and subject to a separate ground handling
                  agreement.  Subject to the provisions in Section 3.4, Mesa shall be
                  responsible for the cost of gates, facilities, and the build-out of
                  such at each station.  Mesa will also be responsible for providing
                  all the equipment necessary for its operations at each station.  Mesa
                  shall be responsible for securing gates at Denver International
                  Airport.


3.       IMPLEMENTATION EXPENSES

         3.1.    Each party shall bear its own automation costs and expenses
                  associated with the services contemplated by this Agreement.  Mesa
                  shall retain the right under this Agreement to convert to Mesa's
                  reservation system, utilize Mesa ticket stock and operate a dual code
                  (YV) on the Mesa local markets.

         3.2      Frontier and Mesa will share the cost and expense (on a 80/20 basis)
                  of roadside, exterior, check-in concourse, gate and baggage service
                  signage placed at airports and city ticket offices identifying
                  Frontier in locations served by the Codeshared Flights in order to
                  facilitate travel on the Codeshared Flights.  Frontier will be
                  responsible for installing and maintaining all such signage, but the
                  parties will mutually determine which party will obtain any necessary
                  formal or informal approvals from appropriate airport or other
                  authorities to install such signage.

         3.3      Each party shall retain all rights, titles and interests in systems, software,
                  equipment and facilities funded by it.

         3.4      In the event that Frontier enters a market previously served by Mesa as a
                  Codeshared Flight, Frontier agrees to: (i) assume Mesa's lease at the
                  airport ; (ii) reimburse Mesa for the EDS line and phone system
                  installations; (iii) reimburse Mesa for all start-up training costs
                  for those employees currently employed by Mesa at such location; (iv)
                  reimburse Mesa for all unamortized reasonable costs of the build out
                  of facilities at such location; and (v) offer to purchase from Mesa
                  or assume the lease of any equipment, including but not limited to
                  computers, printers, and ground support equipment, owned or leased by
                  Mesa at the airport at a price equal to the fair market value.
                  Notwithstanding the foregoing, in the event that the then above
                  mentioned facilities or equipment is not suitable for Frontier's
                  operations due to the size or type of aircraft, Frontier shall not be
                  responsible for such reimbursement.

4.       INVENTORY CONTROL AND PROCEDURES

         4.1      Frontier will ticket Codeshared Passengers using available CRS inventory (free
                  sale environment) as set forth in the Procedures Manual.  The parties
                  will map inventory classes of the Codeshared Flights to inventory
                  classes of Frontier as set forth in the Procedures Manual.  The
                  parties will endeavor to map the average coupon value of Frontier'
                  inventory classes to comparable classes of Mesa to provide
                  nondiscriminatory access for bookings made by Frontier for passengers
                  yielding comparable revenue values, provided however that Mesa will
                  retain sole and ultimate control over the management of seat
                  inventory availability on Codeshared Flights that are operated by
                  Mesa.

         4.2      Frontier shall provide authorized Mesa individuals restricted access to
                  Frontier's CRS partition.  Each day Frontier will transmit to Mesa a
                  file containing daily booking information on each Codeshared Flight.
                  Each day Frontier shall accept from Mesa daily updated authorization
                  levels for each Codeshared Flight.


5.       MARKETING, RESERVATIONS AND PRODUCT DISPLAY

         5.1      The Codeshared Flights will be marketed and promoted by Frontier
                  under its flight designator code.  Frontier agrees to promote the
                  Codeshared Flights throughout the term of this Agreement through
                  sales, advertising, and promotional support to enhance the interline
                  exchange of passengers between the parties.    Each party shall
                  ensure that its respective advertising and promotions shall comply
                  with all applicable governmental laws, rules and regulations.
                  Frontier shall comply with 14 C.F.R. Section 399.88 and any other
                  applicable rules regarding the disclosure and holding out of
                  Codeshared Flights provided for herein.

         5.2      Reservations for passengers using the services described in this Agreement
                  will be made by Frontier on a non-discriminatory basis in accordance
                  with Frontier's established methods and procedures.  For passengers
                  originating their travel at points other than those served by Mesa
                  under this Agreement, either on Frontier's system or on the systems
                  of other airlines, connecting reservations to the services of Mesa
                  will also be on a non-discriminatory basis in accordance with
                  currently established industry methods and practices.  In all cases,
                  Frontier will confirm the reservations of  Mesa's passengers through
                  the entire itinerary of their scheduled trips.  When a contact number
                  is supplied by the passengers making such reservations, Frontier will
                  assume the responsibility of notifying passengers of any changes in
                  Mesa's schedules or operations, provided that Mesa furnishes Frontier
                  with advance notice as set forth in Section 2.5 of such changes.

         5.3      Frontier may identify the Codeshared Flights, to the extent permitted by
                  governmental rules and regulations, in Airline Guides, Timetables,
                  CRS' and Reservations Systems using Frontier' flight designator
                  code.  Any costs incurred for the publication of Codeshared Flights
                  or connections to and from such flights in Airline Guides, CRSs and
                  Reservation Systems shall be borne by Frontier.  Each party shall
                  include the Codeshared Flights in its internal Reservations Systems.

         5.4      Frontier will publish schedules for Mesa in cites served by Mesa but not
                  served by Frontier.  The format and nature of such schedules shall be
                  consistent with schedules published by Frontier in cities not served
                  by Mesa.


         5.5      Frontier and Mesa will mutually cooperate to create an interline agreement to
                  transport cargo on an interline basis, provided the agreement makes
                  sound business sense to both parties.  This agreement will be
                  developed and executed separate to this Codeshare Agreement.

         5.6      Mesa will actively pursue codeshare agreements with other codeshare partners
                  of Frontier. Upon reaching such agreements, Frontier will be allowed
                  to market codeshare to codeshare service.  Under these agreements,
                  Frontier will only be allowed to recover its costs in the manner
                  prescribed in Section 6.

6.       TRAFFIC DOCUMENT ISSUANCE AND SETTLEMENT

         6.1      Frontier shall establish, publish and sell through passenger fares.
                  Passenger revenues will be allocated to each carrier based upon the
                  straight rate/prorate formula (as set forth in detail in section
                  6.6), unless the division of such revenue is otherwise mutually
                  agreeable to Frontier and Mesa.

         6.2      Mesa shall establish, publish, sell and collect local fares
                  applicable to travel within Mesa Exclusive Routes. Unless otherwise
                  provided herein, Mesa shall be paid its local fares for passengers
                  traveling solely on Mesa's flights in accordance with industry and
                  Clearing House practices.

         6.3      Flight coupons for use on the Codeshared Flights may be issued by
                  either party, or by third parties with whom the parties from time to
                  time have interline traffic agreements.

         6.4      All flight coupons on Codeshared Flights shall be sent to and
                  retained by Mesa and shall be billed by Mesa to Frontier or the
                  third-party Ticketing Carrier, as applicable, using the standard
                  interline process of the ACH (as set forth in detail in section
                  6.5).    Settlement of other charges between the carriers will be
                  invoiced and payable through the ACH.
         6.5      Mesa shall remit to Frontier the interline service charge as published by the
                  ACH for all commissionable flight coupons billed under this Agreement
                  for passengers traveling solely on Mesa flights (i.e., passengers who
                  do not connect to/from a Frontier flight).

         6.6      Marketing Carrier Tickets issued by Frontier or Mesa for wholly-domestic
                  itineraries shall be settled in accordance with standard industry
                  straight rate proration as defined in the Passenger Proration Manual
                  based on construction of "highY" fare values, which shall be agreed
                  to by the parties in advance of commencing Codeshared Flights and the
                  parties agree to review such rates on a quarterly basis if necessary
                  or requested by the parties.  For fare verification purposes, the
                  applicable published fare is that filed with the U.S. Department of
                  Transportation or shown in Air Tariff or Airline Passenger Tariff in
                  PIPPS (Passenger Interline Prorate System) in effect on the date that
                  the passenger's ticket is issued. For example, if the Mesa's segment
                  construction Y fare OKC- DEN  is $100 and the Frontier segment
                  construction Y fare for DEN- SEA $400, the dollar value of the
                  OKC-SEA ticket would be divided 20% to Mesa and 80% to Frontier.

                  For itineraries involving an international segment (excluding Canada
                  and other countries that are treated as "domestic" for proration
                  purposes under the ACH rules), proration will be based on the
                  procedures of the Multilateral Prorate Agency as published in the
                  IATA Revenue Accounting Manual.  Marketing Carrier Tickets issued by
                  parties other than Frontier or Mesa shall be settled in accordance
                  with any proration or similar agreements then in force between Mesa
                  and the Ticketing Carrier.

         6.7      Frontier and Mesa will enter into an industry standard Ticketing and Baggage
                  Agreement that will become part of this Agreement. Each carrier will
                  use its own ticket stock associated for special service ticket items.
                  Any other matters not specifically addressed in this Agreement, which
                  require the collecting of fees or issuance of ticket stock, will be
                  subject to the rules of the ACH.

         6.8      In consideration for the reservation services, CRS fees, credit card
                  charge commissions, and certain ticketing services provided by
                  Frontier under this Agreement, Mesa agrees to pay to Frontier  five
                  dollars ($5.00) per passenger fee that involves passengers flying
                  solely on Mesa routes.  Frontier shall bill Mesa on a monthly basis
                  and such billing shall be conducted through the ACH and subject to
                  the ACH policies and procedures..

         6.9      In the case of a rejected credit card or a returned check, Frontier
                  may recover through the ACH any funds paid to Mesa associated with
                  such rejected credit card or returned check.

7.       TRAINING

         7.1      Except as otherwise agreed, each party shall provide or arrange, at
                  its own cost and expense, all initial and recurring training of its
                  personnel (and its travel agents) to facilitate the Codeshared
                  Flights and operations at airports served by the Codeshared Flights,
                  reservations and ticket offices and other points of contact between
                  the parties and with the public.  This training shall include
                  passenger service, reservations and sales activities and in-flight
                  service involving the Codeshared Flights, all as more fully described
                  in the Procedures Manual.

         7.2      Frontier and Mesa shall share any training materials developed to
                  support the Codeshared Flights; provided that the copyright and all
                  other propriety rights to any materials exchanged shall remain with
                  the party who originally developed such materials. Notwithstanding,
                  Mesa shall only be responsible for procedures training as set forth
                  in the Procedures Manual.  Any changes to the Procedures Manual must
                  be agreed to by both Frontier and Mesa.

8.       SECURITY

         The parties shall cooperate in matters of security procedures, requirements
         and obligations at all airports served by the Codeshared Flights in accordance
         with the Procedures Manual.  The Operating Carrier reserves the right to apply
         at its sole expense the provisions of its own security programs to the
         carriage of all passengers, baggage and cargo on board the Codeshared
         Flights.  Such provisions may include any then applicable procedures used for
         the physical screening of passengers, baggage or cargo, interviewing of
         passengers and/or selective loading of baggage or cargo. Mesa will be liable
         for only the security costs related to local market passengers traveling
         solely on Mesa flights.

9.       AIRCRAFT MAINTENANCE AND CLEANING

         The Operating Carrier shall have sole responsibility for the maintenance and
         cleaning of its leased and owned aircraft and other equipment used in
         connection with the Codeshared Flights.  Maintenance of such aircraft and
         equipment must, at a minimum, comply with the standards imposed by the
         relevant aviation  authorities.

10.      FREE AND REDUCED RATE TRANSPORTATION

         Unless otherwise provided by relevant agreements between the Operating Carrier
         and other parties neither party shall be entitled to ticket travel industry
         non-revenue, discounted (i.e., AD, ID, etc.) or free travel on the Codeshared
         Flights.


11.      FREQUENT FLYERS

         11.1     Frontier may offer to participants in the Frontier Frequent Flyer
                  program only (and not participants in any other frequent flyer
                  program with which Frontier may have a participation agreement) the
                  opportunity to accrue and redeem Frontier mileage on the Codeshared
                  Flights.  Mileage accrual on Codeshared Flights will be calculated by
                  and awarded to Frontier Frequent Flyer participants at Frontier' sole
                  discretion.  Mesa shall have sole and exclusive control of frequent
                  flyer capacity awarded in each route for award travel on Codeshared
                  Flights for Frontier Frequent Flyer program members; provided,
                  however such average frequent flyer capacity on Mesa flights shall
                  not be less than seven percent("FF Seat Availability").

         11.2     Within five (5) days after (a) issuance or receipt of notice of
                  termination of this Agreement or (b) receipt of notice of
                  discontinuance of designated Codeshared Flights for any reason,
                  Frontier will discontinue issuing Marketing Carrier Tickets as
                  frequent flyer awards for travel on the discontinued flights where
                  such travel is to occur after the effective date of such termination
                  or discontinuance and Mesa shall have no further obligations under
                  this Agreement.

         11.3     Frontier shall administer its Frequent Flyer Program in a manner that
                  is consistent with the parties' respective obligations under this
                  Agreement and in accordance with all applicable laws.  Frontier shall
                  be solely responsible for the promotion and administration of its
                  Frequent Flyer Program, including without limitation, processing of
                  member enrollments, determining eligibility for award travel,
                  issuance of all award certificates and tickets, recording of mileage
                  accruals, redemption's and other account activity, preparation and
                  distribution of account statements, responding to member inquiries
                  and other customer services.  The advertising and promotional
                  materials disseminated by Frontier respecting mileage accrual or
                  redemption on the Codeshared Flights shall, to the extent
                  practicable, place the public on notice that availability of such
                  accruals and redemption's will terminate in the event of the
                  termination of this Agreement or discontinuance of designated
                  Codeshared Flights.  In the event either party gives notice of
                  termination of this Agreement, Frontier at its expense will advise
                  members of its Frequent Flyer Program in accordance with program
                  rules of the impending termination and the restrictions on
                  post-termination award travel on the Codeshared Flights.

         11.4    Mesa will have no responsibility or liability for Frontier' promotion
                 or administration of its Frequent Flyer Program and Frontier shall
                 indemnify, defend and hold harmless the Operating Carrier Indemnified
                 Party (as defined in Section 15.2) against any and all Damages caused
                 by, arising out of or relating to Frontier' promotion or
                 administration (whether proper or improper) of its Frequent Flyer
                 Program.  This indemnity shall survive the termination of this
                 Agreement.


12.      TRADEMARKS AND CORPORATE IDENTIFICATION

         12.1     Each of Frontier and Mesa acknowledges for all purposes that any and
                  all logos, trademarks, service marks and trade names of the other,
                  whether registered or not, are and shall at all times remain the
                  exclusive property of the other and may not be used in a manner not
                  authorized without the prior written consent of such party, except as
                  set forth herein.  Each of Frontier and Mesa further acknowledges
                  that any goodwill or other rights which arise as a result of the use
                  by it of the other party's marks as permitted under this Agreement
                  shall accrue solely to the benefit of the party owning such marks,
                  whether registered or not.

         12.2     Each of Frontier and Mesa hereby grants to the other, a
                  non-exclusive, non-transferable, royalty-free license for the terms
                  of this Agreement to use their respective service marks ("Frontier"
                  for Frontier and "Mesa"  for Mesa, each a "Licensed Trademark"),
                  subject to the terms and conditions set forth in this Section 12.
                  This license is limited to the use of the Licensed Trademarks in
                  connection with the advertising and promotion of the Codeshared
                  Flights contemplated by this Agreement.

         12.3     Each party agrees to use the Licensed Trademarks only in a manner
                  approved in advance and in writing by the party owning such Licensed
                  Trademarks.  Each Licensed Trademark shall be marked with an(R)or TM
                  or SM or other symbol.
         12.4     Each party agrees that all advertising and promotional materials
                  bearing the Licensed Trademarks in relation to air transport services
                  contemplated by this Agreement shall meet the quality and
                  presentation standards as set forth by the party owning the relevant
                  Licensed Trademark.

         12.5     Each party has sole discretion to determine the acceptability of both
                  the quality and presentation of advertising and promotional materials
                  using its Licensed Trademark.
         12.6     Each party is responsible for providing to its own authorized agents
                  and airport locations the agreed promotional materials bearing the
                  Licensed Trademarks.

         12.7     Mesa operated flights under the F9 codeshare will be operated with an
                  aircraft livery that reflects either Mesa or Frontier.


13.      REPRESENTATIONS AND WARRANTIES

         13.1     Each of Frontier and Mesa hereby represents and warrants to the
                  others as follows:

                  a.       It is a duly incorporated and validly existing corporation,
                           in good standing under the laws of its jurisdiction of
                           incorporation; is an air carrier duly authorized to act as
                           such by the government of its country of incorporation; and
                           has the requisite corporate power and authority to enter
                           into and perform its obligations under this Agreement.  The
                           execution, delivery and performance of this Agreement by it
                           have been duly authorized by all necessary corporate
                           action.  This Agreement has been duly executed and delivered
                           by it and assuming due authorization, execution and delivery
                           by the other party hereto.  This Agreement constitutes its
                           legal, valid and binding obligation, enforceable against it
                           in accordance with its terms, except to the extent that
                           enforceability may be limited or modified by the effect of
                           bankruptcy, insolvency or other similar laws affecting
                           creditors' rights generally and the application of general
                           principles of equity and public policy.

                  b.       The execution, delivery or performance by it of this
                           Agreement, shall not (i) contravene, conflict with or cause
                           a default under (A) any applicable law, rule or regulation
                           binding on it, or (B) any provision of its Charter,
                           Certificate of Incorporation, Bylaws or other documents of
                           corporate governance, or (ii) contravene or cause a breach
                           or violation of any agreement or instrument to which it is a
                           party or by which it is bound, except where such conflict,
                           contravention or breach would not have a material adverse
                           effect on it and its Affiliates taken as a whole or on its
                           ability to perform this Agreement.

                  c.       The execution, delivery and performance by it of this
                           Agreement do not require the consent or approval of or the
                           giving of notice to, the registration with, the recording or
                           filing of any document with, or the taking of any other
                           action in respect of any competent authority, any trustee or
                           holder of any of its indebtedness or obligations any
                           stockholder or any other person or entity, and except where
                           failure to obtain or take such action would not have a
                           material adverse effect on it or a material adverse effect
                           on the transactions contemplated in this Agreement.

         13.2     Each of the foregoing representations and warranties shall survive
                  the execution and delivery of this Agreement.


14.      TERM

         14.1     The term of this Agreement shall commence on the date Codeshared
                  Services begins and shall continue until the fifth year anniversary
                  of such date, unless earlier terminated pursuant to Sections 14.2,
                  18, 24, or as elsewhere provided in this Agreement.  At the
                  expiration of the initial term, this Agreement shall be automatically
                  renewed for additional terms of one year each, unless either party
                  provides written notice to the other party of its intent not to renew
                  this Agreement at least  350 days prior to the end of the initial or
                  any renewal term.

         14.2     This Agreement may be terminated prior to expiration as follows:

                  a.       at any time by mutual written consent of the parties hereto;

                  b.       by the non-breaching party upon the breach of a material
                           term, agreement, covenant, representation or warranty of
                           this Agreement (other than a breach of Section 6.3, 6.4,
                           6.5, or 6.6 of this Agreement or the failure to otherwise
                           pay any sums due pursuant to this Agreement), including a
                           failure to comply with any material obligations and
                           procedures set forth in the Procedures Manual, provided that
                           the non-breaching party provides the breaching party at
                           least 30 days' prior written notice describing the alleged
                           breach with as much particularity as reasonably
                           practicable.  Termination under this Section 14.2.c shall
                           not be effective if the breaching party, (i) corrects such
                           breach within twenty-five (25) days following receipt of
                           such notice, or (ii) if such breach cannot be corrected in
                           such 25-day period, take actions reasonably contemplated to
                           correct such breach and which do correct such breach no
                           later than 30 days following receipt of such notice.

                  c.       by the non-breaching party upon the breach of Section 6 of
                           this Agreement or the failure to otherwise pay any sums due
                           to the non-breaching party pursuant to this Agreement by the
                           other party, after the non-breaching party provides the
                           breaching party at least 15 days' prior written notice
                           describing, with as much particularity as practical the
                           alleged breach and the breaching party does not, within 7
                           days following receipt of such notice, correct such breach;
                           or


                  d.       at any time by Mesa or Frontier upon written notice if the
                           other party (i) makes an assignment for the benefit of
                           creditors; (ii) suspends the payment of or admits in writing
                           its inability to pay, or generally fails to pay, its debts
                           as they become due; (iii) has suspended (as declared by a
                           clearing house) its transactions with banks and/or other
                           financial institutions or proposes or commences a moratorium
                           upon or extension or composition of its debts; (iv) has
                           issued against it any writ, execution, process or abstract
                           of judgment which may have a material adverse effect on it
                           and which is not dismissed, satisfied or stayed within 60
                           days; (v) files a petition for bankruptcy, composition,
                           corporate reorganization, corporate liquidation, arrangement
                           or special liquidation proceedings; or (vi) ceases all or a
                           substantial part of its operations (other than due to Force
                           Majeure as defined in Section 18).

                  e.       if: (i) Mesa's  arrival  performance  as  measured by the DOT
                           for the Denver hub falls one and one-half  percentage  points
                           below Frontier's  arrival  performance for the Denver Hub for
                           four of any five  consecutive  calendar months or (ii) Mesa's
                           flight    completion    factor    (excluding    cancellations
                           attributable to weather,  air traffic control  cancellations,
                           cancellations   resulting  from  an  emergency  airworthiness
                           directive  from  the FAA  affecting  all  aircraft  similarly
                           equipped,  cancellations resulting from the acts or omissions
                           of Frontier or its employees,  including, without limitation,
                           damage to  aircraft)  for the Denver hub falls  below 97% for
                           four of any of five  consecutive  calendar  months  (each,  a
                           "Cancellation  Event"),  Frontier,  at its  election,  may by
                           written notice (a  "Performance  Notice") inform Mesa that if
                           the  Cancellation  Event is not cured within ninety (90) days
                           from receipt of such Performance  Notice (the "Cure Period"),
                           Frontier,  at its  option may give a  Termination  Notice (as
                           defined below).  If the Cancellation  Event relates to Mesa's
                           arrival  performance,  the  cure  shall be  effected  by Mesa
                           bringing its arrival  performance for such hub to a rate that
                           is  equal  to or  above  Frontier's  arrival  performance  as
                           measured  by the  DOT at  the  Denver  hub  during  the  Cure
                           Period.  If the  Cancellation  Event  relates  to the  Mesa's
                           flight completion  factor, the cure shall be effected by Mesa
                           bringing  its flight  completion  factor at the Denver hub to
                           97% or higher  during  the Cure  Period.  If,  after the Cure
                           Period has  expired  and Mesa has not cured the  Cancellation
                           Event as set forth  above,  then  Frontier at any time during
                           the thirty  (30) day period  following  the lapse of the Cure
                           Period  without cure may, upon 60 days' prior written  notice
                           to Mesa  ("Termination  Notice"),  terminate this  Agreement.
                           Frontier  and Mesa shall  provide  each  other  with  written
                           reports,  within  ten days  from  the last day of the  month,
                           containing the necessary data for the above calculations.

         14.3     Subject to Section 14.4, in the event of termination or expiration of
                  this Agreement, Frontier shall take all reasonable actions to confirm
                  and preserve  reservations on the Operating Carrier for passengers
                  scheduled to be traveling on Marketing Carrier Tickets and, as
                  applicable, endorse or otherwise modify or reissue such tickets to
                  permit use on the Operating Carrier.  The Operating Carrier shall
                  accept passengers traveling on such tickets as if such reservations
                  had been booked through the Operating Carrier using ordinary
                  interline procedures but giving effect to the ticket settlement
                  methodology provided in Section 6.4 of this Agreement.

         14.4     In the event that this Agreement is terminated by the Operating Carrier
                  pursuant to Section `4.2.b,c or d, the Operating Carrier, in its sole
                  discretion, may decline any or all passengers scheduled to be
                  traveling on Marketing Carrier Tickets.  The Operating Carrier who
                  terminates this Agreement shall be solely responsible for
                  transferring the reservations of such passengers to other carriers or
                  making other alternative arrangements.

         14.5     Mesa agrees to dedicate five (5) aircraft to Codeshare Flights under
                  this Agreement by April 30, 2002 and Mesa agrees that absent a
                  material adverse change in its business that it will not reduce the
                  size of its fleet in Denver by more than one aircaft every two (2)
                  months.

15.      INDEMNIFICATION

         15.1     Subject to the indemnities provided in Section 15.2(a), Mesa shall
                  indemnify, defend and hold harmless Frontier and its Affiliates and
                  their respective directors, officers, employees and agents
                  (individually a "Marketing Carrier Indemnified Party") from and
                  against any and all Damages arising out of, caused by or occurring in
                  connection with (or alleged to arise out of, be caused by or be
                  occurring in connection with):

                  a.       the death of or injury to persons (other than employees of
                           Marketing Carrier Indemnified Party while performing
                           services required under this Agreement), delay of passengers
                           or delay or loss of or damage to property (including
                           aircraft, baggage or cargo) occurring while such persons or
                           property are under the control or in the custody of, or
                           being transported by, Mesa, (including for the avoidance of
                           doubt, death of or injury to codeshare passengers traveling
                           on Marketing Carrier Tickets that implement limits of
                           liability with respect to passenger claims that differ from
                           those of the Operating Carrier) except to the extent and
                           degree caused by the willful misconduct of a Marketing
                           Carrier Indemnified Party (in which case Frontier shall
                           indemnify Mesa);

                  b.       negligent acts or omissions Mesa which are in any way
                           related to services contemplated by this Agreement to the
                           extent insurable;

                  c.       Mesa's breach of any of its representations or warranties
                           set forth in Section 13 of this Agreement;

                  d.       infringement of a third party's intellectual property or
                           similar rights by Mesa's logos, trademarks, service marks or
                           trade names; or

                  e.       based upon Mesa's provision of or failure to provide
                           carriage or service in conformity with the governing
                           conditions of carriage or orders or regulations binding on
                           the carrier with which the passenger has a contract of
                           carriage.

         15.2     Subject to the indemnities provided in Section 15.1(a), Frontier
                  shall indemnify, defend and hold harmless Mesa and its Affiliates and
                  their respective directors, officers, employees and agents
                  (individually an "Operating Carrier Indemnified Party") against any
                  and all Damages arising out of, caused by or occurring in connection
                  with (or alleged to arise out of, be caused by or be occurring in
                  connection with):

                  a.       the death of or injury to persons (other than employees of
                           the Operating Carrier Indemnified Party while performing
                           services required under this Agreement), delay of passengers
                           or delay or loss of or damage to property (including
                           aircraft, baggage or cargo) occurring while such persons or
                           property are under the control or in the custody of, or
                           being transported by, the Marketing Carrier, (including for
                           the avoidance of doubt, death of or injury to codeshare
                           passengers traveling on Marketing Carrier Tickets that
                           implement limits of liability with respect to passenger
                           claims that differ from those of the Operating Carrier)
                           except to the extent and degree caused by the willful
                           misconduct of a Operating Carrier Indemnified Party (in
                           which case Mesa shall indemnify the Marketing Carrier
                           Indemnified Party

                  b.       negligent acts or omissions of a Marketing Carrier
                           Indemnified Party which are in any way related to services
                           contemplated under this Agreement to the extent insurable;

                  c.       passenger claims based on Frontier' failure to properly
                           issue and complete transportation documentation in
                           accordance with the provisions of the standard IATA, or ATA
                           (as may be appropriate), ticketing procedures, including the
                           failure to put a proper notice of the limits of liability on
                           such documentation or regulatory requirements imposed by
                           governing governmental authorities;

                  d.       Frontier' breach of its representations or warranties set
                           forth in Section 13of this Agreement; or

                  e.       infringement of a third party's intellectual property or
                           similar rights by Frontier' logos, trademarks, service marks
                           or trade names.

         15.3     A party (the "Indemnified Party") that believes it is entitled to
                  indemnification from another party (the "Indemnifying Party")
                  pursuant to the terms of this Agreement with respect to a third party
                  claim shall provide the Indemnifying Party with written notice (an
                  "Indemnification Notice") of such claim (provided, however, that the
                  failure to give such notice shall not relieve the Indemnifying Party
                  of its obligations hereunder except to the extent that such failure
                  is materially prejudicial to the Indemnifying Party), and the
                  Indemnifying Party shall be entitled, at its own cost and expense and
                  by its own legal advisors, to control the defense of or to settle any
                  such third-party claim.  The Indemnifying Party shall have the right
                  to elect to settle any such claim, for monetary damages only, subject
                  to the consent of the Indemnified Party; provided, however, if the
                  Indemnified Party fails to give such consent to a settlement that has
                  been agreed upon by the Indemnifying Party and the claimant in
                  question within 20 days of being requested to do so, the Indemnified
                  Party shall, assume the defense of such claim or demand and
                  regardless of the outcome of such matter, the Indemnifying Party's
                  liability hereunder shall be limited to the amount of any such
                  proposed settlement.  If the Indemnifying Party fails to take any
                  action against the third-party claim that is the subject of an
                  Indemnification Notice within 30 days of receiving such
                  Indemnification Notice, or otherwise contests its obligation to
                  indemnify the Indemnified Party in connection therewith, the
                  Indemnified Party may, upon providing prior written notice to, but
                  without the further consent of, the Indemnifying Party settle or
                  defend against such third-party claim for the account and at the
                  expense of the Indemnifying Party.  Except as set forth in this
                  Section 15.3, the Indemnified Party shall not enter into any
                  settlement or other compromise or consent to a judgment with respect
                  to a third party claim to which the Indemnifying Party has an
                  indemnity obligation without the prior written consent of the
                  Indemnifying Party.  Each Indemnified Party shall have the right, but
                  not the duty, to participate in the defense of any claim with
                  attorneys of its own choosing and at its own cost, without relieving
                  the Indemnifying Party of any obligations hereunder.

         15.4     Each party further agrees to indemnify, defend and hold harmless the
                  other from and against any and all Taxes and related assessments,
                  levied upon or advanced by the Indemnified Party but that ultimately
                  the Indemnifying Party would be responsible for paying and resulting
                  from any transaction or activity contemplated by this Agreement.

         15.5     The rights and obligations of the parties under this Section 15 shall
                  survive the termination or expiration of this Agreement.


16.      INSURANCE

         16.1     Mesa shall procure and maintain for the benefit of Frontier during
                  the term of this Agreement with insurance carriers of known financial
                  responsibility, insurance of the type and in the amounts listed below:

                  a.       comprehensive airline liability insurance, including
                           comprehensive general liability, passenger (including
                           Codeshared Passengers and all other revenue and non-revenue
                           passengers), baggage, cargo, mail and aircraft third party
                           legal liability (all policies shall be extended to include
                           war risks, hijacking and allied perils), in an amount not
                           less than Three Hundred Million Dollars (US $300,000,000)
                           (or other foreign currency equivalent) per any one
                           occurrence, or any lesser amount traditionally carried in
                           the regional airline industry under similar agreements.
                           This insurance must be primary to the extent of the
                           indemnification obligations of Mesa without right of
                           contribution from any insurance carried by Frontier, and
                           shall (i) name Frontier and the other Marketing Carrier
                           Indemnified Parties as additional insureds, (ii) contain a
                           severability of interest clause and a breach of warranty
                           clause in favor of Frontier, and (iii) specifically insure
                           the Operating Carrier's indemnification obligations under
                           this Agreement;

                  b.       hull all risk insurance, including war risk, and such policy
                           shall include a waiver of subrogation in favor of Marketing
                           Carrier to the extent of the indemnity specified in Section
                           15.1; and

                  c.       Workers' compensation and employers' liability insurance
                           or such other similar or equivalent insurance carried outside
                           of the United States, in accordance with statutory limits.

         16.2     Frontier shall procure and maintain for the benefit of Mesa during
                  the term of this Agreement with insurance carriers of known financial
                  responsibility, insurance of the type and in the amounts listed below:

                  a.       comprehensive airline liability insurance, including
                           comprehensive general liability, passenger (including
                           Codeshared Passengers and all other revenue and non-revenue
                           passengers), baggage, cargo, mail and aircraft third party
                           legal liability (all policies shall be extended to include
                           war risks, hijacking and allied perils), in an amount not
                           less than Three Hundred Million Dollars (US $300,000,000)
                           (or other foreign currency equivalent) per any one
                           occurrence. This insurance must be primary to the extent of
                           the indemnification obligations of Frontier without right of
                           contribution from any insurance carried by Mesa, and shall
                           (i) name Mesa and the other Operating Carrier Indemnified
                           Parties as additional insureds, (ii) contain a severability
                           of interest clause and a breach of warranty clause in favor
                           of Mesa, and (iii) specifically insure Frontier's
                           indemnification obligations under this Agreement;

                  b.       hull all risk insurance, including war risk, and such policy
                           shall include a waiver of subrogation in favor of Operating
                           Carrier to the extent of the indemnity specified in Section
                           15.1; and

                  c.       workers' compensation and employers' liability insurance or
                           such other similar or equivalent insurance carried outside
                           of the United States, in accordance with statutory limits.


         16.3     Both Mesa and Frontier shall provide to each other certificates of
                  insurance evidencing the required coverage within five (5) Business
                  Days after the effective date of this Agreement and thereafter within
                  five (5) days of the date of any renewal of such coverage.  The
                  certificates must indicate that the above coverage shall not be
                  canceled or materially altered without thirty (30) days' advance
                  written notice to either party and that either party shall be
                  notified of any expiration or renewal of such coverage.  The notice
                  period in respect of war and allied perils coverage shall be 7 days
                  or such lesser period as is or may be available in accordance with
                  policy conditions.

         16.4     Family Assistance.  The carriers and their insurers shall endeavor to
                  cooperate in post-accident handling to mutually ensure that the
                  families of accident victims are treated with the dignity, respect
                  and financial assistance to which they are entitled.  All parties
                  will act in the spirit of good faith and reasonableness.  Cooperation
                  among all parties shall not be unreasonably withheld.

                  The Operating Carrier shall be responsible for performing, and incur
                  all associated costs with respect to, all emergency response
                  activities at the accident scene and all Family Assistance Activities
                  as required by law (Aviation Disaster Family Assistance Act of 1996 -
                  49 U.S.C. 1136 and 41113.) or usual custom and practice.
                  The Operating Carrier and its insurers agree to be responsible for
                  the following:

                  a.       Costs of defense;
                  b.       All associated post-accident expenses mandated by local and
                           international law and industry agreements;
                  c.       Indemnification to the Marketing Carrier for reasonable
                           services for which the Operating Carrier contracts
                  d.       Safety audits and analyses; and
                  e.       Limits of liability coverage to the extent to which the Marketing
                           Carrier has agreed to in its tariffs or conditions of contract.


17.      TAXES

         17.1     Each party shall be responsible for any net or gross income or
                  franchise taxes (or taxes of a similar nature) on the revenues or
                  income or any measure thereof which is attributable to it in
                  connection with the sale of air transportation pursuant to this
                  Agreement.  Each party shall be responsible for and pay such taxes on
                  the portion of such revenues or income attributable to it in relation
                  to any interline service charge.

         17.2     Frontier (if it is the Ticketing Carrier) shall collect, except as
                  otherwise prohibited by law, all Ticket Taxes relating to tickets
                  sold or travel documents issued by it with respect to air transport
                  pursuant to this Agreement.

18.      FORCE MAJEURE

         Except with respect to the performance of payment obligations under this
         Agreement, neither party shall be liable for delays in or failure to perform
         under this Agreement to the extent that such delay or failure (an "Excusable
         Delay") (a) is caused by any act of God, war, natural disaster, strike,
         lockout, labor dispute, work stoppage, fire, serious epidemic or quarantine
         restrictions, act of government or any other cause, whether similar or
         dissimilar beyond the control of that party; and (b) is not the result of that
         party's lack of reasonable diligence.  If an Excusable Delay continues for 20
         consecutive days or any 30 days out of any 45-day period, the non-delayed
         party shall have the right, at its option to terminate this Agreement by
         giving the delayed party at least 30 days' prior written notice.


19.      GOVERNING LAW

         19.1     This Agreement shall in all respects be governed by and construed in
                  accordance with the laws of the State of Colorado (without regard to
                  its conflict of laws principles thereof ) including all matters of
                  construction, validity and performance.


20.      COVENANT TO COMPLY WITH ALL LAWS

         20.1     In performing its obligations under this Agreement, each party shall,
                  at its own cost and expense, fully comply with, and have all licenses
                  under, all applicable federal, state, provincial and local laws of
                  the United States, including rules and regulations promulgated by the
                  U.S. National Transportation Safety Board, Department of
                  Transportation, U.S. Federal Aviation Administration and the U.S.
                  Department of Defense.

         20.2     If either party has notice that a provision of this Agreement is
                  contrary to any applicable laws or governmental regulations, that
                  party shall immediately notify the other party in writing, such
                  notice to include a description of the perceived violation of
                  regulation and supporting written materials that facilitate the other
                  party's investigation of such perceived violation.


21.      PUBLICITY

         Except as required by applicable law, neither party may issue any written
         press release concerning this Agreement without the prior written consent of
         the other party (which consent shall not be unreasonably withheld or delayed).

22.      CONFIDENTIALITY

         22.1     Except as necessary to obtain any Government Approvals or as
                  otherwise provided below, each party shall ensure that its directors,
                  officers, employees, Affiliates, and professional advisors
                  (collectively, the "Representatives"), at all times, maintain strict
                  confidence and secrecy in respect of all Confidential Information of
                  the other party (including its Affiliates) received directly or
                  indirectly as a result of this Agreement.  If a  party (the
                  "Disclosing Party") is requested to disclose any Confidential
                  Information of the other party (the "Affected Party") under the terms
                  of a subpoena or order issued by a court or governmental body, it
                  shall (a) notify the Affected Party immediately of the existence,
                  terms and circumstances surrounding such request, (b) consult with
                  the Affected Party on the advisability of taking legally available
                  steps to resist or narrow such request and (c) if any disclosure of
                  Confidential Information is required to prevent the Disclosing Party
                  from being held in contempt or subject to other legal penalty,
                  furnish only such portion of the Confidential Information as it is
                  legally compelled to disclose and use commercially reasonable efforts
                  (at the cost of the party whose Confidential Information is being
                  protected) to obtain an order or other reliable assurance that
                  confidential treatment shall be accorded to the disclosed
                  Confidential Information.  Each party agrees to transmit Confidential
                  Information only to such of its Representatives as required for the
                  purpose of implementing and administering this Agreement, and shall
                  inform such Representatives of the confidential nature of the
                  Confidential Information and instruct such Representatives to treat
                  such Confidential Information in a manner consistent with this
                  Section 22.1.

         22.2     Within 90 days after the termination of this Agreement, each of
                  Frontier and Mesa shall, either deliver to the other party or destroy
                  all copies of the other party's Confidential Information in its
                  possession or the possession of any of its representatives
                  (including, without limitation, any reports, memoranda or other
                  materials prepared by such party or at its direction) and purge all
                  copies encoded or stored on magnetic or other electronic media or
                  processors, unless and only to the extent that the Confidential
                  Information is necessary for the continued administration and
                  operation of such party's programs or is reasonably necessary in
                  connection with the resolution of any dispute between the parties.

         22.3     Each party acknowledges and agrees that in the event of any breach of
                  this Section 22, the Affected Party shall be irreparably and
                  immediately harmed and could not be made whole by monetary damages.
                  Accordingly, it is agreed that, in addition to any other remedy at
                  law or in equity, the Affected Party shall be entitled to an
                  injunction or injunctions (without the posting of any bond and
                  without proof of actual damages) to prevent breaches or threatened
                  breaches of this Section 22 and/or compel specific performances of
                  this Section 22.

         22.4     The confidential obligations of the parties under this Section 22
                  shall survive the termination or expiration of this Agreement.


23.      ASSIGNMENT

         None of the parties may assign or otherwise convey or transfer any of its
         rights under this Agreement, or delegate or subcontract any of its duties
         hereunder, without the prior written consent of the other party.


24.      SEVERABILITY

         If any provision of this Agreement is or becomes illegal, invalid or
         unenforceable under the law of any jurisdiction, such provision shall be
         severed from this Agreement from the jurisdiction in question and shall not
         affect the legality, validity or enforceability of the remaining provisions of
         this Agreement nor the legality, validity or the enforceability of such
         provision under the law of any other jurisdiction; unless in the reasonable
         opinion of either party, any such severance affects the commercial basis of
         this Agreement, in which case the party shall so inform the other party and
         the parties shall negotiate to agree upon modification of this Agreement so as
         to maintain the balance of the commercial interests of the parties.  If,
         however, such negotiations are not successfully concluded within 90 days from
         the date a party has informed the other that the commercial basis has been
         affected, either party may terminate this Agreement by giving at least 30
         days' prior written notice to the other party.


25.      EXCLUSIVITY

         25.1     Mesa has the sole and exclusive right to operate Codeshared Flights
         using regional jet aircraft on behalf of Frontier during the term of this
         Agreement. In consideration of Mesa's exclusive regional jet codeshare partner
         air carrier status, Mesa shall have the right of first refusal to institute
         any new services (cities or flights) that are forecasted to be profitable by
         Frontier.  Depending on the availability of equipment, such services shall be
         inaugurated  no later than eighteen months  following the recommendation by
         Frontier. Frontier may not request service to more than two markets in any six
         calendar month period.  For purposes of this Agreement, "Six Calendar Month
         Period" means each period commencing on January 1 and ending on June 30 and
         commencing on July 1 and ending on December 30, with the first Six Month
         Calendar Month commencing on January 1, 2003.  If Mesa declines to provide the
         requested service, Frontier shall have the right to contract with another
         carrier to operate that route with the F9 code, provided that the market shall
         be the same as proposed to Mesa.  Mesa shall have thirty (30) days from the
         time it is offered the additional agreement to accept or decline such
         opportunity.

         25.2     Mesa Minimum Service Routes. Mesa shall have the right to operate no
                  less than fifty percent (50%) of the frequencies in the Minimum
                  Servcie Routes. Froniter must give at least six (6) months notice to
                  Mesa of its intent to replace Mesa's service with it's own service on
                  Minimum Service Routes. If Mesa desires to increase frequency in a
                  Minimum Service Routes and Frontier is already providing service in
                  such market, Mesa must receive written approval from Frontier (no
                  later than 90 days) prior to implementing the service.  If Frontier
                  requests Mesa to increase frequency in a Mesa Minimum Service Route,
                  Mesa shall have six months to increase service.  In the event that
                  Mesa fails to increase service in such market, Mesa shall only retain
                  the ability to continue its service at then current level.


         25.3     Other than as explicitly set forth in Sections 25.1, 25.2 and 25.5
                  this Agreement is non-exclusive and does not preclude any party from
                  entering into or maintaining marketing relationships, including
                  code-sharing, with other carriers.

         25.4     Non-Mesa Exclusive Routes.  Mesa shall have the right to operate
                  aircraft utilizing the "F9*" code on markets designated as Non-Mesa
                  Exclusive Routes.Frontier must give Mesa three months notice prior to
                  entering or operating additional service on a non-Mesa Exclusive
                  Route currently serviced by Mesa. Should Frontier begin service in a
                  Non-Mesa Exclusive Route, Frontier shall have the right to remove the
                  "F9*" code from the Mesa operated flights. .  Frontier may request
                  that Mesa operate concurrently in a non-Mesa Exclusive Route,  Mesa's
                  ability to operate concurrently in that market may be revoked by
                  Frontier with a minimum of three months advance written notice.


         25.5     Except for codeshare agreements with America West Airlines, Inc., USAirways,
                  Inc. and Midwest Express Airlines, Inc., Mesa agrees not to enter
                  into another codeshare agreement with a carrier hubbed in Denver for
                  markets served by Frontier that originate or end in Denver, Colorado.

         25.6     On flights where Mesa operates under the F9* code, Mesa may not
                  operate flights under another code other than the "YV" code.




26.      RELATIONSHIP OF PARTIES

         The relationship between Mesa and Frontier shall be that of independent
         contractors.  Each of Mesa and Frontier shall not have and shall not represent
         to any other person that it has, any power, right or authority to bind the
         other, or to assume, or create, any obligation or responsibility, express or
         implied, on behalf of the other, except as expressly required by this
         Agreement or as otherwise permitted in writing.  Nothing in this Agreement
         shall be construed to create between Mesa and Frontier and/or their respective
         Representatives any partnership, joint venture, employment relationship,
         franchise or agency.


27.      FURTHER ASSURANCES

         Each party shall perform such further acts and execute and deliver such
         further instruments and documents at such party's costs and expenses as may be
         required by applicable law, rules or regulations or as may be reasonably
         requested by the other to carry out and effectuate the purposes of this
         Agreement.


28.      MISCELLANEOUS

         28.1     This Agreement contains the entire agreement between the parties
                  relating to its subject matter, and supersedes any prior
                  understandings or agreements between the parties regarding the same
                  subject matter.  This Agreement may not be amended or modified except
                  in writing signed by a duly authorized representative of each party.

         28.2     Unless otherwise expressly required in this Agreement, all notices,
                  reports, invoices and other communications required or permitted to
                  be given to or made upon a party to this Agreement shall be given in
                  accordance with the procedures set forth in the Procedures Manual.

         28.3     All rights, remedies and obligations of the parties hereto shall
                  accrue and apply solely to the parties hereto and their permitted
                  successors and assigns; there is no intent to benefit any third
                  parties, including the creditors of either party.

         28.4     This Agreement may be executed and delivered by the parties in
                  separate counterparts, each of which when so executed and delivered
                  shall be an original, but all of which taken together shall
                  constitute one and the same instrument.

         28.5     No failure to exercise and no delay in exercising, on the part of any
                  party, any right, remedy, power or privilege hereunder, shall operate
                  as a waiver thereof; nor shall any single or partial exercise of any
                  right, remedy, power or privilege hereunder preclude any other or
                  further exercise thereof of the exercise of any other right, remedy,
                  power or privilege.  The rights, remedies, powers and privileges
                  herein provided are cumulative and not exclusive of any rights,
                  remedies, powers and privileges provided by law.  The failure of any
                  party to insist upon a strict performance of any of the terms or
                  provisions of this Agreement, or to exercise any option, right or
                  remedy herein contained, shall not be construed as a waiver or as a
                  relinquishment for the future of such term, provision, option, right
                  or remedy, but the same shall continue and remain in full force and
                  effect.  No waiver by any party of any term or provision of this
                  Agreement shall be deemed to have been made unless expressed in
                  writing and signed by such party.

         28.6     This Agreement is the product of negotiations between Frontier and
                  Mesa, and shall be construed as if jointly prepared and drafted by
                  them, and no provision hereof shall be construed for or against any
                  party by reason of ambiguity in language, rules of construction
                  against the drafting party, or similar doctrine.

         28.7     NEITHER PARTY SHALL BE LIABLE FOR ANY EXEMPLARY PUNITIVE, SPECIAL OR
                  CONSEQUENTIAL DAMAGES, INCLUDING LOST REVENUES, LOST PROFITS OR LOST
                  PROSPECTIVE ECONOMIC ADVANTAGE, ARISING FROM ANY PERFORMANCE OR
                  FAILURE TO PERFORM UNDER THIS AGREEMENT, EVEN IF SUCH PARTY KNOWS OR
                  SHOULD HAVE KNOW OF THE POSSIBILITY THEREOF, AND EACH PARTY HEREBY
                  RELEASES AND WAIVES ANY CLAIMS AGAINST THE OTHER PARTY REGARDING SUCH
                  DAMAGES.  FOR THE AVOIDANCE OF DOUBT, THE PARTIES AGREE THAT THE
                  FOREGOING SHALL NOT LIMIT A PARTY'S OBLIGATION TO INDEMNIFY THE OTHER
                  IN ACCORDANCE WITH SECTION 16 FOR DAMAGES ARISING OUT OF OR RELATING
                  TO CLAIM, SUIT OR CAUSE OF ACTION BY A THIRD PARTY.

         28.8     Unless otherwise expressly set forth in this Agreement, all notices,
                  reports, invoices and other communications required hereunder to be
                  given to or made upon any party shall be in writing, shall be addressed
                  as provided below and shall be considered as properly given and received
                  (i) when delivered, if delivered in person (and a signed acknowledgment of
                  receipt is obtained); (ii) one Business Day after dispatch if
                  dispatched by a recognized express delivery service which provides
                  signed acknowledgments of receipt; or (iii) three Business Days after
                  deposit in the U.S. mail, if sent by certified or registered first
                  class mail, postage prepaid, return receipt requested.    For the
                  purposes of notice, the addresses of the parties shall be as set
                  forth below; provided, however, that either party shall have the
                  right to change its address for notice to any other location by
                  giving at least three Business Days prior written notice to the other
                  party in the manner set forth above.

                  If to Frontier:

                           7001 Tower Road
                           Denver, Colorado  80249
                           Attention: Vice President- Marketing and Planning
                           Phone:  720/374-4200
                           Facsimile:  720/374-4375

                           with a copy to Attention:  General Counsel

                  If to Mesa:

                           410 North 44th  Street, Suite 700
                           Phoenix, Arizona 85008
                           Attention: Vice President - Planning
                           Phone:  602/685-4000
                           Facsimile:  602/685-4350

                           with a copy to Attention:  General Counsel

         28.9     Each carrier shall have the right, at its own cost, to inspect,
                  review, and observe the other carrier's operations of Codeshared
                  Flights, and/or to conduct a full safety and/or service audit of the
                  other carriers operations, manuals and procedures reasonably related
                  to the Codeshared Flights, at such intervals as each carrier shall
                  reasonably request.  In the exercise of such right, neither carrier
                  shall undertake any responsibility for the performance of the other's
                  operations.  Each carrier shall carrier shall coordinate it's safety
                  and service audits with the other so as to avoid disruptions of the
                  other carrier's operations.  Any safety audit may include, without
                  limitation, maintenance and operation procedures, crew planning,
                  reservations, passenger and baggage handling, customer service,
                  personnel records, spare parts, inventory records, training records
                  and manuals, flight training and operational records.

         IN WITNESS WHEREOF, the day authorized representatives of the parties have
executed this Agreement as of the date first indicated above.

FRONTIER AIRLINES, INC.                     MESA AIRLINES, INC.


By:       ___________________________             By:   ________________________
Name:     ___________________________             Name:  _______________________
Title:    ___________________________             Title:  ______________________

Attachments:
Annex A - Definitions
Annex B - Codeshared Flights
Annex C - Mesa Mininum Service Markets and Mesa Exclusive Routes






                                        ANNEX A
                                      DEFINITIONS

"ACH" means Airlines Clearing House, Inc., a clearing house which administers and
implements revenue settlement between carriers by reference to ACH's Manual of
Procedure.

"Affiliate" means with respect to any person or entity, any other person or entity
directly or indirectly controlling, controlled by, or under common control with, such
person or entity.  For purposes of this definition, "control" (including "controlled
by" and "under common control with") means the power directly or indirectly, to direct
or cause the direction of the management and policies of such person or entity,
whether through the ownership of voting securities, by contract or otherwise.

"Airline Guides" means the printed and electronic data versions of the "Official
Airline Guide" and its respective successor.

"ATA" means the Air Transport Association.

"Business Day" means any day other than a Saturday, Sunday or other day on which
banking institutions in New York, New York are required by law, regulation or
executive order to be closed.

"Codeshared Flights" means all flights operated by Mesa which carry the Frontier "F9"
flight designator code.  Such flights shall be established by mutual agreement, and
specifically include services operated on Mesa Exclusive Routes and Mesa Minimum
Service Routes.  The currently agreed routes for all such flights are listed in Annex
B; routes may be added or deleted from Annex B upon mutual agreement of Frontier and
Mesa and shall be reflected in a signed written amendment to Annex B.

"Codeshared Passenger" means a passenger traveling on a Marketing Carrier Ticket.

"Codeshared Services" means the actual transportation of passengers on Codeshared
Flights per this Agreement.

"Conditions of Carriage" means those tariffs and rules of carriage of a party that
govern the transport of passengers traveling on tickets showing such party's two
letter flight designator code in the carrier code box of the flight coupon.

"Confidential Information" means (a) all confidential or proprietary information of a
party, including, without limitation, trade secrets, information concerning past,
present and future research development, business activities and affairs, finances,
properties, methods of operation, processes and systems, customer lists, customer
information (such as passenger name record or "PNR" data) and computer procedures and
access codes; and (b) the terms and conditions of this Agreement and any reports,
invoices or other communications between the parties given in connection with the
negotiation or performance of this Agreement; and (c) excludes (i) information already
in a party's possession prior to its disclosure by other party; (ii) information
obtained from a third person or entity that is not prohibited from transmitting such
information to the receiving party as a result of a contractual, legal or fiduciary
obligation to the party whose information is being disclosed; (iii) information that
is or becomes generally available to the public, other than as a result of disclosure
by a party in violation of this Agreement; or (iv) information that has been or is
independently acquired or developed by a party, or its Affiliate, without violating
any of its obligations under this Agreement.

"CRS"  means a computerized reservations system owned or operated by any entity,
including either party to this Agreement, that contains information about commercial
airline schedules, fares, cargo rates, passenger and cargo tariff rules and flight
availability that is made available to travel agents, cargo agents, and other
non-airline entities to facilitate their ability to make reservations and issue
tickets and air waybills.

"Damages" means all claims, suits, causes of action, penalties, liabilities,
judgments, fines, losses and expenses of any nature or kind whatsoever under the laws
of any jurisdiction (whether arising in tort, contract, under the Warsaw Convention
and related instrument, or otherwise), including reasonable costs and expenses of
investigating, preparing or defending any claim, suit, action or proceeding (including
post judgment and appellate proceedings or proceedings that are incidental to the
successful establishment of a right of indemnification), such as reasonable attorneys'
fees and fees for expert witnesses, consultants and litigation support services, but
not including internal expenses of the indemnified party, such as employee salaries
and the costs of cooperating in the investigation, preparation or defense of claims.

"IATA" means the International Air Transport Association.

"ISC" means the Interline Service Charge. The Interline Service Charge (ISC), as
determined and published by the ACH, is the percentage charged on an interline billing
to reimburse the billing carrier for travel agent commission they paid on the ticket
when it was reported to the Airlines Reporting Corporation (ARC).  Due to the various
commission rates paid by all carriers, ARC looks at the amount of commission paid and
the base fare of all tickets reported to them and this determines the ISC rate charged
for the following three months.  An Airlines Clearing House (ACH) memo is distributed
to all participating carriers quarterly to inform them whether or not this average
commission percentage changes or not.

"Marketing Carrier Ticket" means a ticket issued by Frontier, Mesa or a third party
for travel on a Codeshared Flight showing Frontier' two letter flight designator code
in the carrier code box of the flight coupon.

"Marketing Flight(s)" means a Codeshared Flight when shown only as a flight of Frontier.


"Mesa Exclusive Routes" means routes to and from Denver where Mesa shall have the sole
and exclusive right to operate flights using the F9 code. Frontier shall not introduce
any flights under the F9 code using Frontier aircraft (or any other operator) on Mesa
Exclusive Routes without Mesa's express written permission, which permission may be
withheld for any reason at Mesa's complete and total discretion.   Mesa Exclusive
Routes are listed in Annex C; routes may be added or deleted from Annex C only upon
mutual agreement of Frontier and Mesa and shall be reflected in a signed written
amendment to Annex C.

"Mesa Minimum Service Routes" means routes to and from Denver where Mesa shall have
the right to operate at least fifty percent (50%) of all flights operating under the
F9 code.  For example, if the market from BOI to DEN has three flights per day, Mesa
shall be entitled to operate two of the three flights.  Mesa Minimum Service Routes
are listed in Annex C; subject to the provisions of Section 25.2 of this Agreement,
routes may be added or deleted from Annex C only upon mutual agreement of Frontier and
Mesa and shall be reflected in a signed written amendment to Annex C.

"Operating Carrier" means the party having operational control of an aircraft used for
a given Codeshared Flight.

"Procedures Manual" means a detailed procedures manual prepared by the parties for
implementing the transactions contemplated by this Agreement.

"Reservations System" means the internal computerized airline passenger or cargo
reservations system used by the personnel of an airline that contains information
about flight schedules, fares, cargo rates, passenger and cargo tariff rules and seat
availability of that airline and other carriers, and provides the ability to make
reservations and issue tickets or air waybills.

"Ticketing Carrier" means a carrier whose traffic documents are used to issue a ticket.

"Ticket Taxes" means any transactional taxes or passenger facility charges, including,
without limitation, sales taxes, use taxes, stamp taxes, excise taxes, value added
taxes, gross receipt taxes, departure taxes, surcharges and travel taxes, and all
related charges, fees, licenses or assessments (and any interest or penalty thereon)
imposed by any authority in any country, or political subdivision thereof or public
authority operating therein (including, without limitation any national, federal,
state, provincial, territorial, local, municipal, port or airport authority) or levied
upon it by operation of applicable law, or industry standard.  Ticket Taxes together
with the taxes referred to in Section 18 are hereinafter collectively referred to as
"Taxes".

"$" or USS" or "Dollars" means lawful currency of the United States of America.





                                        ANNEX B


CODESHARED FLIGHTS                                        IMPLEMENTATION DATE

Between Denver and:







                                        ANNEX C

MESA MINIMUM SERVICE ROUTES

Between Denver and:

                           Billings, MT              (BIL)
                           Eugene, OR                (EUG)
                           Boise, ID                 (BOI)
                           Tulsa, OK                 (TUL)
                           Spokane, WA               (GEG)
                           Milwaukee, WI             (MKE)
                           Oklahoma City, OK         (OKC)

MESA EXCLUSIVE ROUTES

                           Between Denver and:

                           Burbank, CA               (BUR)
                           Cedar Rapids, IA          (CID)
                           Des Moines, IA            (DSM)
                           Fargo, ND                 (FAR)
                           Fresno, CA                (FAT)
                           Wichita, KS               (ICT)
                           Little Rock, AR           (LIT)
                           Memphis, TN               (MEM)
                           Madison, WI               (MSN)
                           Palm Springs, CA          (PSP)
                           Santa Barbara, CA         (SBA)