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AIRLINE HAS NEW FRONTIER 8 YEARS AFTER MOURNING

SHARE AIRLINE HAS NEW FRONTIER 8 YEARS AFTER MOURNING

After Frontier Airlines, which operated in Utah for many years, collapsed eight years ago, hundreds of employees gathered at a mock funeral, grieving as if they had lost a family member.

The pilots, attendants, crew members and executives, who shared a special camaraderie, have remained in touch over the years, holding annual reunions that have drawn 1,000 or more. Many never lost the hope that they would reunite in a new, successful venture.On Tuesday, that dream will come true when Frontier Airlines is reborn with daily jet service from Denver to North Dakota.

About three-fourths of the 180 employees worked for the original Frontier.

"The Frontier spirit has never died," said chairman M.C. "Hank" Lund, a former president and chief executive of the original Frontier. "The employees are just unbelievably committed and enthusiastic.

"We had 5,000 applications before we shut them off. We told them straightforward, `You're entering a new business and you have to anticipate some risks.' They couldn't wait to get on board."

Frontier is hoping to capitalize on an emerging market - cities in the West where major carriers have reduced or eliminated jet service. Its competition in North Dakota is United Express' turboprop commuter planes and Northwest's jet service to Minneapolis, Lund said.

Denver-based Frontier has raised about $9.4 million in start-up financing, including $7.6 million in an initial public stock offering, plus investments from the founders and private stock placements.

In the first couple of years, Frontier expects to carry about 500,000 passengers. Lund said he has projected a first-year loss of about $1.2 million, "but we may beat that. The interest is really exceeding what we expected."

Chris Fotos, publications director of Avmark Inc., an airline industry consulting firm, said Frontier is adopting a strategy similar to other new airlines aimed at niche markets. "Everybody is really looking to pick up the pieces that are left when the big guys pull out," he said.

Most begin with about $5 million or less, he said.

During its 40 years in the air, the original Frontier built a regional network that served 89 cities in the United States, Canada and Mexico. Its strength was customer service, from on-time flights to cordial employees and fine dining that included occasional steak and lobster dinners.

Between 1972 and 1982, Frontier posted profits in every quarter.

But the carrier began running into problems when airline industry deregulation in the late 1970s left it competing against United and Continental airlines in the Denver market.

In 1985, Frontier's largest stockholder, Gencorp of Akron, Ohio, threatened to liquidate the airline. That year Texas Air Corp., Continental's parent, and a coalition of Frontier employee unions submitted separate offers to acquire the airline.

But People Express outbid both, buying Frontier for about $300 million.

People Express, which became a power by offering cheap fares on no-frills flights, imposed its policies on Frontier. But the strategy backfired as customers moved to full-service flights that sold for the same price.

Frontier lost $10 million a month in the first six months of 1986. It stopped flying on Aug. 24, 1986, and entered bankruptcy five days later.

A group of former Frontier executives began putting together the new Frontier about a year ago. Seven of the eight executives in the new venture held similar positions in the original Frontier.

Lund, who came out of retirement in Sun City West, Ariz., to head the venture, is optimistic about its chance for success. "I'm 73 and I feel like 22," he said.

Frontier is starting with service on two routes linking Denver to the North Dakota cities of Bismarck and Minot, and Fargo and Grand Forks. It plans to add routes in Montana by summer's end, Lund said. Other potential markets are in Iowa and Nebraska.

The carrier has leased two Boeing 737-200 twinjets that are painted white with a bold blue "Frontier" on the side.