- 15 -

                                    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 June 30, 1998


[   ]    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            (I.R.S. Employer Identification No.)
incorporated or organization)

    12015 E. 46th Avenue, Denver, CO                    80239
(Address of principal executive offices)             (Zip Code)


Issuer's telephone number including area code:  (303) 371-7400


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 August 4,
1998 was 13,792,064.



<PAGE>



                                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                                    14




                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings                                    15 

Item 6.  Exhibits and Reports on Form 8-K                     15




<PAGE>


                                           PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
FRONTIER AIRLINES, INC.
Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                                               June 30,       March 31,
                                                                                 1998            1998
                                                                             -------------   -------------
                                                                             (unaudited)
<S>                                                                          <C>             <C>
Assets
Current assets:
    Cash and cash equivalents                                              $    9,295,600  $    3,641,395
    Short-term investments                                                      4,932,533         -
    Restricted investments                                                      4,000,000       4,000,000
    Trade receivables, net of allowance for doubtful accounts
      of $180,666 and $139,096 at June 30, 1998 and March 31, 1998              9,287,698      11,661,323
    Maintenance deposits                                                       11,381,019       9,307,723
    Prepaid expenses and other assets                                           5,067,638       3,843,694
    Inventories                                                                 1,401,837       1,164,310
    Deferred lease and other expenses                                             380,975         380,975
                                                                             -------------   -------------
            Total current assets                                               45,747,300      33,999,420

Security, maintenance and other deposits                                        8,883,483       7,633,143
Property and equipment, net                                                     5,609,636       5,579,019
Deferred lease and other expenses                                                 685,185         780,429
Restricted investments                                                          2,606,459       2,606,459
                                                                             =============   =============
                                                                           $   63,532,063  $   50,598,470
                                                                             =============   =============

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
    Accounts payable                                                       $   10,443,630  $   13,664,750
    Air traffic liability                                                      19,830,061      18,910,441
    Other accrued expenses                                                      4,090,275       5,157,640
    Accrued maintenance expense                                                13,760,957      12,537,228
    Note payable                                                                  179,663         -
    Current portion of obligations under capital leases                            70,475          54,346
                                                                             -------------   -------------
            Total current liabilities                                          48,375,061      50,324,405

Senior secured notes payable                                                    3,555,739       3,468,138
Accrued maintenance expense                                                     3,052,149       2,381,354
Obligations under capital leases, excluding current portion                       112,081          97,757
                                                                             -------------   -------------
            Total liabilities                                                  55,095,030      56,271,654
                                                                             -------------   -------------

Stockholders' equity (deficit)
    Preferred stock, no par value, authorized 1,000,000 shares;
        none issued and outstanding                                               -               -
    Common stock, no par value, stated value of $.001 per share,
        authorized 40,000,000 shares; 13,616,564 and 9,253,563 shares
        issued and outstanding at June 30, 1998 and March 31, 1998                 13,617           9,253
    Additional paid-in capital                                                 51,626,728      37,954,584
    Accumulated deficit                                                       (43,203,312)    (43,637,021)
                                                                             -------------   -------------
            Total stockholders' equity (deficit)                                8,437,033      (5,673,184)
                                                                             -------------   -------------
                                                                           $   63,532,063  $   50,598,470
                                                                             =============   =============
</TABLE>

See accompanying notes to condensed financial statements.




<PAGE>



FRONTIER AIRLINES, INC.
Condensed Statements of Operations

<TABLE>
<CAPTION>


                                                                            Three Months Ended June 30,
                                                                                 1998            1997
                                                                          --------------------------------
                                                                                    (Unaudited)
<S>                                                                        <C>             <C>
Revenues:
    Passenger                                                              $   41,560,587  $   33,621,450
    Cargo                                                                       1,004,748         627,809
    Other                                                                         322,218         307,411
                                                                             -------------   -------------

            Total revenues                                                     42,887,553      34,556,670
                                                                             -------------   -------------

Operating expenses:
    Flight operations                                                          17,853,706      14,244,102
    Aircraft and traffic servicing                                              7,137,822       6,788,493
    Maintenance                                                                 8,727,868       7,734,691
    Promotion and sales                                                         7,126,460       6,299,522
    General and administrative                                                  1,278,559       1,378,766
    Depreciation and amortization                                                 338,449         349,588
                                                                             -------------   -------------

            Total operating expenses                                           42,462,864      36,795,162
                                                                             -------------   -------------

            Operating income (loss)                                               424,689      (2,238,492)
                                                                             -------------   -------------

Nonoperating income:
    Interest income                                                               275,569         160,806
    Interest expense                                                             (240,239)         (4,537)
    Other, net                                                                    (26,310)         (4,434)
                                                                             -------------   -------------

            Total nonoperating income, net                                          9,020         151,835
                                                                             -------------   -------------

Net income (loss)                                                          $      433,709  $   (2,086,657)
                                                                             =============   =============

Earnings (loss) per share (note 2):
             Basic                                                         $         0.03  $       (0.24)
                                                                             =============   =============
             Diluted                                                       $         0.03  $       (0.24)
                                                                             =============   =============

Weighted average shares of common stock outstanding                            12,513,827       8,844,375
                                                                             =============   =============

Weighted average shares of common stock and
  common stock equivalents outstanding                                         13,689,997       8,844,375
                                                                             =============   =============
</TABLE>

See accompanying notes to condensed financial statements.



<PAGE>



FRONTIER AIRLINES, INC.
Condensed Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                            Three Months Ended June 30,
                                                                                 1998            1997
                                                                          --------------------------------
                                                                                    (Unaudited)
<S>                                                                        <C>             <C>
Cash flows from operating activities:
    Net income (loss)                                                      $      433,709  $  (2,086,657)
    Adjustments to reconcile net income (loss) to net cash
        used by operating activities:
            Depreciation and amortization                                         521,294         419,482
            Changes in operating assets and liabilities:
                Restricted investments                                            -                  (129)           
                Trade receivables                                               2,373,625         383,629
                Security, maintenance and other deposits                       (3,323,636)     (1,641,471)
                Prepaid expenses and other assets                              (1,223,944)       (451,618)
                Inventories                                                      (237,527)          2,669
                Note receivable                                                   -                 6,703 
                Accounts payable                                               (3,221,120)     (1,254,908)
                Air traffic liability                                             919,620         331,488
                Other accrued expenses                                         (1,067,365)      1,103,056
                Accrued maintenance expense                                     1,894,524       2,088,735
                                                                             -------------   -------------
                     Net cash used by operating activities                     (2,930,820)     (1,099,021)
                                                                             -------------   -------------

Cash flows used in investing activities:
    Increase in short-term investments                                         (4,932,533)         -
    Aircraft lease deposits                                                       -              (147,500)
    Capital expenditures                                                         (328,162)       (642,620)
                                                                             -------------   -------------
                     Net cash used in investing activities                     (5,260,695)       (790,120)
                                                                             -------------   -------------

Cash flows provided by financing activities:
    Net proceeds from issuance of common stock                                 13,676,508         -
    Proceeds from short-term borrowings                                           179,663         170,318
    Principal payments on short-term borrowings                                   -               (27,830)
    Principal payments on obligations under capital leases                        (10,451)         (8,548)
                                                                             -------------   -------------
                    Net cash provided by financing activities                  13,845,720         133,940
                                                                             -------------   -------------

                    Net increase (decrease) in cash and cash equivalents        5,654,205      (1,755,201)


Cash and cash equivalents, beginning of period                                  3,641,395      10,286,453
                                                                             -------------   -------------

Cash and cash equivalents, end of period                                   $    9,295,600  $    8,531,252
                                                                             =============   =============

</TABLE>

See accompanying notes to condensed financial statements.



<PAGE>


FRONTIER AIRLINES, INC.
Notes to Condensed Financial Statements
June 30, 1998


(1)  Basis of Presentation

     The  accompanying   unaudited  condensed  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 1998 Annual
     Report  on  Form  10-K.  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
     three months ended June 30, 1998 and 1997 are not necessarily indicative of
     the results that will be realized for the full year.

 (2) Common Stock

     In April 1998,  the Company sold 4,363,001  shares of its common stock,  no
     par value, through a private placement to an institutional investor.  Gross
     proceeds to the Company from the transaction were $14,179,753, of which the
     Company received net proceeds of $13,676,508.  The Company issued a warrant
     to this investor to purchase  716,929 shares of common stock of the Company
     at a purchase  price of $3.75 per  share,  which  warrant  expires in April
     2002.


<PAGE>


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. (the "Company") and the expectations of the
Company  and  management.  When used in this  document,  the  words  "estimate,"
"anticipate,"  "project"  and  similar  expressions  are  intended  to  identify
forward-looking  statements.  These  statements are subject to certain risks and
uncertainties  that could cause actual results to differ  materially  from those
set forth.  These risks and uncertainties  include,  but are not limited to: the
timing of, and  expense  associated  with,  expansion  and  modification  of the
Company's  operations in accordance with its business strategy or in response to
competitive  pressures or other  factors such as the Company's  commencement  of
passenger  service  and  ground  handling  operations  at several  airports  and
assumption of  maintenance  and ground  handling  operations at DIA with its own
employees;  general economic factors and behavior of the fare-paying  public and
the  federal  government,  such as the  crash  in May 1996 of  another  low-fare
carrier's  aircraft  that  resulted in a federal  investigation  of the carrier,
suspension  of the  carrier's  operations  and  increased  federal  scrutiny  of
low-fare carriers  generally that may increase the Company's  operating costs or
otherwise adversely affect the Company;  actions of competing airlines,  such as
increasing   capacity  and  pricing   actions  of  United   Airlines  and  other
competitors;  the current  limited  supply of Boeing 737 aircraft and the higher
lease and maintenance costs associated with such aircraft, which may inhibit the
Company's  ability to achieve  operating  economies  and  implement its business
strategy; recent changes to the former air transportation excise tax of 10% to a
combination  of a  percentage  tax and flight  segment  fee;  and  uncertainties
regarding aviation fuel prices. Because the Company's business, like that of the
airline  industry  generally,  is  characterized by high fixed costs relative to
revenues,  small  fluctuations in the Company's yield per RPM or expense per ASM
can significantly affect operating results.

General

       The  Company is a  low-fare,  full-service  commercial  airline  based in
Denver,  Colorado.  The Company currently operates routes linking its Denver hub
to 15 cities in 12 states spanning the nation from coast to coast. The Company's
current route system  extends from Denver to Los Angeles,  San Francisco and San
Diego,   California;   Chicago   and   Bloomington/Normal,   Illinois;   Boston,
Massachusetts;   Baltimore,  Maryland;   Seattle/Tacoma,   Washington;  Phoenix,
Arizona; Minneapolis/St. Paul, Minnesota; Salt Lake City, Utah; Omaha, Nebraska;
Albuquerque,  New Mexico, New York (LaGuardia), New York; and El Paso, Texas. At
present,  the Company utilizes  approximately five gates at Denver International
Airport ("DIA") for approximately 66 daily flight departures and arrivals.

       Organized in February 1994, the Company  commenced  flight  operations in
July 1994 with two leased Boeing 737-200 jet aircraft. It has since expanded its
fleet to 14 leased jets, including seven Boeing 737-200s and seven larger Boeing
737-300s.

       The Company's senior management team includes executives with substantial
experience  in the airline  industry,  including  persons who  occupied  similar
positions at a former  airline  called  Frontier  Airlines that served  regional
routes to and from  Denver  from 1950 to 1986.  From  time to time,  the  former
Frontier Airlines served most of the Company's current and intended markets with
jet equipment from its Denver hub.

       The Company expanded  operations  during the quarters ended June 30, 1997
and June 30,  1998.  Therefore,  the  Company's  results of  operations  for the
quarters  ended  June  30,  1997  and 1998  are not  necessarily  comparable  or
indicative of future operating results.

Terminated Merger with Western Pacific Airlines

       On June 30,  1997,  the Company  signed an  Agreement  and Plan of Merger
("the Merger Agreement")  providing for the merger (the "Merger") of the Company
with Western Pacific Airlines ("Western  Pacific"),  a low-fare airline that had
previously used Colorado Springs, Colorado as its base of flight operations. The
Merger  Agreement was signed following  Western  Pacific's shift of a portion of
its flight  operations  to DIA, and its announced  intent to further  expand its
operations at DIA.  Pursuant to the Merger  Agreement,  a "code share" marketing
alliance  between the Company and Western  Pacific went into effect on August 1,
1997, in effect integrating the route networks of the two airlines.

       On September 29, 1997,  both companies  mutually  agreed to terminate the
Merger  Agreement  and the  code-share  arrangement.  The  separation of the two
carriers required the Company to implement a costly  restructuring of its flight
schedule and route system to support a stand-alone  operation  competing against
both Western  Pacific and United  Airlines,  the dominant air carrier at DIA. On
October 5, 1997,  Western  Pacific filed for protection  under Chapter 11 of the
U.S.  Bankruptcy Code. Western Pacific ceased operations on February 4, 1998 and
is in the process of liquidating its business.

Results of Operations

       The  Company  had net income of  $434,000  or $.03 per basic and  diluted
share  for the  quarter  ended  June  30,  1998  as  compared  to a net  loss of
$2,087,000  or $.24 per share for the quarter  ended June 30,  1997.  During the
quarter  ended June 30, 1998 as compared to the prior  comparable  quarter,  the
Company experienced higher fares as a result of increases in business travelers,
decreased  competition  as a result of the  demise of  Western  Pacific,  and an
increase in the average length of haul and stage length. The Company was able to
reduce its cost per ASM to  7.80(cent)  during the  quarter  ended June 30, 1998
from 9.08(cent) for the prior comparable  period.  The Company  benefited from a
significant reduction in fuel prices, a reduction in maintenance costs per block
hour as a result  of four  new  aircraft,  and  operating  efficiencies  and the
economies of scale as the Company's fixed costs were spread across a larger base
of operations.

       Small  fluctuations in the Company's yield per RPM or expense per ASM can
significantly affect operating results because the Company, like other airlines,
has high fixed costs and low operating margins 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 the
Company's liquidity, cash flows and results of operations.


<PAGE>


       The following table sets forth certain quarterly  financial and operating
data regarding the Company for the fifteen  months of operations  ended June 30,
1998.
<TABLE>
<CAPTION>

                                                    Selected Financial and Operating Data                        

                                                                  Quarter Ended
                          ----------------------------------------------------------------------------------------
<S>                        <C>               <C>               <C>               <C>               <C>    

                             June 30,        September 30,     December 31,        March 31,         June 30,
                               1997              1997              1997              1998              1998

Passenger revenue          $33,622,000       $36,021,000       $31,922,000       $40,454,000       $41,561,000
Revenue passengers             339,000           347,000           301,000           370,000           368,000
carried
Revenue passenger
    miles (RPMs)(1)        249,436,000       282,190,000       259,443,000       328,309,000       337,555,000
Available seat miles
  (ASMs)(2)                405,395,000       490,810,000       524,686,000       575,294,000       544,557,000
Passenger load factor(3)         61.5%             57.5%             49.4%             57.1%             62.0%
Break-even load factor(4)        65.3%             60.8%             67.3%             60.0%             61.3%
Block hours(5)                   9,087            10,507            11,059            12,114            11,255
Average daily block hour
  utilization(6)                 10.28              9.89             10.52             10.30             10.27
Yield per RPM(7) (cents)         13.48             12.76             12.30             12.32             12.31
Yield per ASM(8) (cents)          8.52              7.66              6.31              7.28              7.88
Expense per ASM (cents)           9.08              8.12              8.52              7.70              7.80
Passenger revenue per
  block hour                 $3,700.01         $3,428.29         $2,886.52         $3,339.44         $3,692.63
Average fare(9)                    $94               $99              $101              $105              $108
Average aircraft in fleet         11.0              11.8              13.0              13.6              14.0

Operating income (loss)    ($2,238,000)      ($2,253,000)     ($11,626,000)      ($2,437,000)          $425,000
Net income (loss)          ($2,087,000)      ($2,048,000)     ($11,519,000)      ($2,092,000)          $434,000
</TABLE>

(1)  "Revenue  passenger  miles," or RPMs,  are  determined by  multiplying  the
     number of fare-paying passengers carried by the distance flown.
(2)  "Available  seat miles," or ASMs, are determined by multiplying  the number
     of seats available for passengers by the number of miles flown.
(3)  "Passenger  load  factor" is determined by dividing revenue passenger miles
     by available seat miles.
(4)  "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 (5) "Block  hours" represent the
     time between  aircraft  gate  departure and aircraft gate arrival.
(6)  "Average  daily block hour  utilization"  represents  the total block hours
     divided by the weighted  average number of aircraft days in service.  
(7)  "Yield per RPM" is  determined  by dividing  passenger  revenues by revenue
     passenger miles. 
(8)  "Yield per ASM" is determined by  dividing total revenues by available seat
     miles. 
(9)  "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.

<PAGE>


       The  following  table  provides  operating  revenues and expenses for the
Company  expressed  as cents per total  available  seat miles  ("ASM")  and as a
percentage of total operating revenues, as rounded, for the year ended March 31,
1998 and the quarters ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>

                                                                        Quarters Ended June 30,
                                     Year Ended March 31,    -------------------------------------------------
                                             1998                      1998                     1997
                                    -----------------------  ------------------------ ------------------------
                                       Per           %          Per           %           Per           %
                                      total         of         total          of         total         of
                                       ASM        Revenue       ASM        Revenue        ASM        Revenue
<S>                                 <C>          <C>         <C>          <C>         <C>           <C>


     Revenues: 
         Passenger                    7.11         96.5%        7.63         96.9%        8.29        97.3%
         Cargo                        0.15          2.0%        0.18          2.3%        0.15         1.8%
         Other                        0.11          1.4%        0.06          0.8%        0.08         0.9%
                                    -----------  ----------  -----------  ----------- ------------  ----------
     Total revenues                   7.37        100.0%        7.88        100.0%        8.52       100.0%
                                                                                    

     Operating expenses:
         Flight operations            3.32         45.1%        3.28         41.6%        3.51        41.2%
         Aircraft and traffic         
           servicing                  1.54         20.9%        1.31         16.6%        1.67        19.6%                       
         Maintenance                  1.59         21.6%        1.60         20.4%        1.91        22.4%
         Promotion and sales          1.47         19.9%        1.31         16.6%        1.55        18.2%
         General and administrative   0.32          4.3%        0.23          3.0%        0.34         4.0%
         Depreciation and             
         amortization                 0.06          0.9%        0.06          0.8%        0.09         1.0%                
                                    ===========  ==========  ===========  =========== ============  ==========
     Total operating expenses         8.30        112.6%        7.80          99.0%       9.08       106.5%
                                    ===========  ==========  ===========  =========== ============  ==========  
     Total ASMs (000s)               1,996,185                  544,557                   405,395

</TABLE>
                                     
Revenues

       The  Company's  revenues are highly  sensitive to changes in fare levels.
Fare pricing  policies  have a  significant  impact on the  Company's  revenues.
Because of the  elasticity  of  passenger  demand,  the  Company  believes  that
increases  in fares  will  result  in a  decrease  in  passenger  demand in many
markets.  The Company  cannot  predict  future fare  levels,  which  depend to a
substantial  degree on actions of  competitors.  When sale prices or other price
changes are  initiated by  competitors  in the  Company's  markets,  the Company
believes that it must, in most cases,  match those competitive fares in order to
maintain its market  share.  Passenger  revenues are seasonal in leisure  travel
markets  depending on the markets'  locations and when they are most  frequently
patronized.

       The Company's  average fare for the quarters ended June 30, 1998 and 1997
were $108 and $94,  respectively.  Management  believes that the increase in the
average  fare during the quarter  ended June 30, 1998 over the prior  comparable
period was largely a result of the Company's  focus on increasing  the number of
business travelers,  decreased  competition as a result of the demise of Western
Pacific,  and an increase in the average  length of haul and stage  length.  The
average  length of haul  increased from 737 miles for the quarter ended June 30,
1997 to 917 miles for the  quarter  ended June 30,  1998.  Effective  October 1,
1997,  the  U.S.  Congress  reduced  the  10%  excise  tax to 9%,  but  added  a
per-flight-segment  fee of $1 on  domestic  flights.  The  tax  decreases  to 8%
October  1, 1998 and to 7.5% on  October 1,  1999.  The  per-flight-segment  fee
increases to $2 effective  October 1, 1998, $2.25 effective  October 1, 1999 and
thereafter increases in annual amounts of 25 cents until it reaches $3 effective
October 1, 2002.

       Passenger  Revenues.  Passenger  revenues  totaled  $41,561,000  for  the
quarter ended June 30, 1998 compared to  $33,621,000  for the quarter ended June
30, 1997, or an increase of 23.6%. The number of revenue  passengers carried was
368,000 for the quarter  ended June 30, 1998 compared to 339,000 for the quarter
ended June 30,  1997 or an  increase  of 8.6%.  The Company had an average of 14
aircraft  in its fleet  during the quarter  ended June 30,  1998  compared to an
average of 11 aircraft in its fleet during the quarter  ended June 30, 1997,  or
an increase of 27.3% and an increase in ASMs of 139,162,000 or 34.3%.

       During the quarter ended June 30, 1998, the Company had eight or 57.1% of
its fleet out for scheduled major  maintenance  compared to five or 45.4% of its
fleet  during  the  quarter  ended  June 30,  1997.  In order to  complete  this
maintenance cycle so that the entire fleet would be fully operational during the
summer months, the Company was required to rotate two aircraft out of service at
a time. Because of this, the Company was unable to provide additional  scheduled
service  during the quarter  ended June 30, 1998.  Management  believes that the
number of revenue  passengers and related  revenue would have been higher during
the  quarter  ended  June  30,  1998 had it not  been  for the  volume  of heavy
maintenance performed.

       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 quarter ended June 30,
1998,  the Company's  break-even  load factor was 61.3%  compared to a passenger
load factor of 62%. For the quarter ended June 30, 1997 the Company's break-even
load  factor  was 65.3%  compared  to a  passenger  load  factor  of 61.5%.  The
Company's  break-even  load factor  decreased from the prior  comparable  period
largely  as a result of an  increase  in its  average  fare to $108  during  the
quarter  ended June 30, 1998 from $94 during the quarter ended June 30, 1997 and
a decrease in its expenses per ASM to 7.80(cent)  for the quarter ended June 30,
1998 from 9.08(cent) for the quarter ended June 30, 1997.

       Cargo  revenues,  consisting  of revenues  from freight and mail service,
totaled  $1,005,000  and $628,000 for the quarters ended June 30, 1998 and 1997,
representing  2.3% and 1.8% of total  operating  revenues or an increase of 60%,
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 liquor sales and excess baggage
fees,  totaled $322,000 and $307,000 or less than 1% of total operating revenues
for each of the quarters ended June 30, 1998 and 1997, respectively.

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
decreased  to 99% of revenue  for the quarter  ended June 30,  1998  compared to
106.5% of revenue  for the  quarter  ended  June 30,  1997.  Operating  expenses
decreased as a percentage  of revenue  during the quarter ended June 30, 1998 as
the Company  experienced  a  significant  reduction  in fuel  prices,  decreased
maintenance costs per block hour as a result of four new aircraft, and operating
efficiencies and the economies of scale as the Company's fixed costs were spread
across a larger base of operations.

       Flight  Operations.   Flight  operations   expenses  of  $17,854,000  and
$14,244,000  were 41.6% and 41.2% of total  revenue for the quarters  ended June
30, 1998 and 1997, 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.

       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
costs of $5,191,000  for  8,667,000  gallons used and  $5,520,000  for 7,169,000
gallons  used  resulted in an average fuel cost of  59.9(cent)  and 77(cent) per
gallon and represented 30.9% and 38.8% of total flight  operations  expenses for
the quarters ended June 30, 1998 and 1997,  respectively.  The average fuel cost
per gallon  decreased  for the quarter  ended June 30, 1998 from the  comparable
prior  period due to an overall  decrease  in the cost of fuel.  Fuel prices are
subject to change  weekly as the Company does not  purchase  supplies in advance
for inventory.  Fuel  consumption  for the quarters ended June 30, 1998 and 1997
averaged 770 and 789 gallons per block hour, respectively.  Fuel consumption per
block hour decreased as a result of more fuel efficient aircraft and an increase
in the average length of haul.

       Aircraft lease expenses totaled  $7,591,000  (17.7% of total revenue) and
$4,616,000  (13.4% of total  revenue) for the  quarters  ended June 30, 1998 and
1997,  respectively,  or  an  increase  of  44.6%.  The  increase  is  partially
attributable  to the increase in the average number of aircraft in service to 14
from 11, or 27.3%, for the quarters ended June 30, 1998 and 1997,  respectively,
and largely due to higher lease  expenses  for larger and newer  Boeing  737-300
aircraft added to the fleet.

       Aircraft  insurance  expenses  totaled  $647,000 (1.5% of total revenue) 
for the quarter  ended June 30, 1998 offset by a profit  commission  of $153,000
for the  policy  period  ended June 6, 1998.  The profit  commission  was earned
because the Company had no aircraft hull  insurance  claims during the 1997-1998
policy year.  Aircraft  insurance  expenses for the quarter  ended June 30, 1997
were $634,000 (1.8% of total revenue).  Aircraft insurance expenses decreased as
a  percentage  of revenue  as a result of  competitive  pricing in the  aircraft
insurance  industry,  the Company's  favorable  experience rating since it began
flight  operations  in July 1994 and  economies  of scale due to the increase in
fleet size.  For the policy period June 7, 1998 to June 6, 1999, the Company has
reduced its  aircraft  insurance  rates by  approximately  44.8% or an estimated
annual savings of $1,787,000 at its present fleet levels.

       Pilot and flight  attendant  salaries  before  payroll taxes and benefits
totaled $2,316,000 and $1,967,000 or 5.6% and 5.9% of passenger revenue for each
of the quarters ended June 30, 1998 and 1997, or an increase of 17.7%. Pilot and
flight  attendant  compensation  increased  principally  as a result  of a 27.3%
increase in the  average  number of aircraft in service and an increase of 23.9%
in block hours. Pilot and flight attendant salaries decreased as a percentage of
passenger revenue because the Company did not add additional aircraft during the
quarter  ended June 30,  1998.  The  Company  pays  pilot and  flight  attendant
salaries  for  training   consisting  of  approximately  six  and  three  weeks,
respectively,  prior to  scheduled  increases  in  service  which  can cause the
compensation  expense during that period to appear high in  relationship  to the
average number of aircraft in service. When the Company is not in the process of
adding aircraft to its system,  pilot and flight attendant  expense per aircraft
normalizes.  With a scheduled passenger operation, and with salaried rather than
hourly crew  compensation,  the  Company's  expenses for flight  operations  are
largely fixed, with flight catering and fuel expenses the principal exception.

       Aircraft and Traffic  Servicing.  Aircraft and traffic servicing expenses
were  $7,138,000  and  $6,788,000 for the quarters ended June 30, 1998 and 1997,
respectively,  and represented  16.6% and 19.6% of total revenue.  These include
all  expenses  incurred at airports  served by the  Company,  as well as station
operations  administration  and flight operations ground equipment  maintenance.
Station  expenses  include landing fees,  facilities  rental,  station labor and
ground handling expenses.  Station expenses as a percentage of revenue decreased
during the quarter ended June 30, 1998 over the quarter ended June 30, 1997 as a
result of the Company's rental costs (in particular, the gate rentals at DIA and
other cities where the Company added additional  frequencies)  which are largely
fixed  costs,  remaining  relatively  constant as  compared  to the  increase in
revenue. Aircraft and traffic servicing expenses will increase with the addition
of new cities to the Company's  route system;  however,  the increased  existing
gate utilization at DIA is expected to reduce per unit expenses.

       Maintenance. Maintenance expenses of $8,728,000 and $7,735,000 were 20.4%
and  22.4% of total  revenue  for the  quarters  ended  June 30,  1998 and 1997,
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.  Maintenance  cost per block hour was $775 and $851
per block  hour for the  quarters  ended June 30,  1998 and 1997,  respectively.
Maintenance  costs per block hour decreased as a result of the four new aircraft
added to the  Company's  fleet during the past year and the fixed rental cost of
the  hangar  facility  being  spread  over a larger  aircraft  fleet  offset  by
corrosion  inspections  on two of the  Company's  737-200s.  The newer  aircraft
require fewer routine repairs and are generally  covered by a warranty period of
approximately  three years on standard Boeing  components.  Management  believes
that these costs will continue to normalize as additional  aircraft are added to
the fleet.

       Promotion  and  Sales.  Promotion   and  sales   total  expenses  totaled
$7,126,000  and  $6,300,000 and  were 16.6% and 18.2% of  total  revenue for the
quarters ended June 30, 1998 and 1997, 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.  Promotion  and sales  expenses  decreased  as a  percentage  of  revenue
for the quarter ended June 30, 1998 over the prior comparable  period largely as
a  result  of  an  increase  in  the average fare;  however, promotion and sales
expenses  per  passenger  increased to $19.36 from $18.58 from the quarter ended
June 30, 1997, due  to  increased reservations costs  including  communications,
computer reservation fees and reservation  personnel,  as well as an increase in
credit card  fees.  The  costs of reservation  personnel increased  as a  result
of outsourcing part of the Company's reservations requirements.  These increased
costs were offset by a decrease in travel agency  commissions.  During the month
of April 1998, the Company reduced travel commissions to 8% from 10% matching an
8%  commission  instituted  by the  Company's  competitors  in the fall of 1997.
Additionally,  the Company's direct sales, which are not subject to commissions,
increased as a percentage of passenger  revenue.  Travel agency commissions as a
percentage of passenger revenue, before non-revenue  passengers,  administrative
fees and  breakage  (revenue  from expired  tickets),  decreased to 5.7% for the
quarter ended June 30, 1998 from 7.2% for the quarter ended June 30, 1997.

       Advertising  expenses of $854,000 were 2.1% of passenger  revenue for the
quarter ended June 30, 1998,  compared to $725,000 or 2.2% of passenger  revenue
for the  quarter  ended  June 30,  1997.  Advertising  expenses  normalized  and
decreased  to some extent as the Company did not incur  advertising  expenses to
introduce new markets during the quarters ended June 30, 1998 and 1997.

       General and Administrative.  General and administrative  expenses for the
quarters ended June 30, 1998 and 1997 totaling $1,279,000 and $1,379,000 were 3%
and 4% of total revenue,  respectively.  During the quarter ended June 30, 1998,
the Company  relieved  approximately  $240,000 of its employee health  insurance
liability which was determined to be overfunded  with a corresponding  credit to
general  and  administrative  expenses.  Without  this  adjustment,  general and
administrative  expenses  would have been  approximately  $1,519,000  or 3.5% of
revenue.  These  expenses  include  the wages  and  benefits  for the  Company's
executive  officers  and  various  other  administrative  personnel.  Legal  and
accounting expenses, supplies and other miscellaneous expenses are also included
in this category.

       Depreciation and Amortization.  Depreciation and amortization  expense of
$338,000 and $350,000  were  approximately  1% of total revenue for the quarters
ended June 30, 1998 and 1997, respectively.  These expenses include depreciation
of office  equipment,  ground station  equipment,  and other fixed assets of the
Company.  Amortization of start-up and route  development costs are not included
as  these  expenses  have  been  expensed  as  incurred.  Depreciation  expenses
decreased from the prior  comparable  period as the Company  matured and certain
assets,  acquired  around  the time of the  Company's  inception  and  which the
Company has not found necessary to replace, have been fully depreciated.

       Nonoperating  Income  (Expenses).  Total net nonoperating  income totaled
$9,000 for the quarter  ended June 30, 1998 compared to $152,000 for the quarter
ended June 30, 1997.  Interest income increased from $161,000 to $276,000 during
the  quarter  ended  June 30,  1998 from the prior  comparable  period due to an
increase in cash balances as a result of the sale of Common Stock in April 1998.
Interest  income was offset by interest  expense of $240,000  during the quarter
ended June 30, 1998. In December 1997, the Company sold $5,000,000 of 10% senior
notes.  In  connection  with this  transaction,  the  Company  issued the lender
warrants to purchase 1,750,000 shares of Common Stock.  Interest expense paid in
cash and the  accretion  of the  warrants and  deferred  loan  expenses  totaled
$234,000 during the quarter ended June 30, 1998.

       Expenses per ASM. The Company's  expenses per ASM for the quarters  ended
June 30,  1998 and 1996  were  7.80(cent)  and  9.08(cent),  respectively,  or a
decrease of 14.1%.  Expenses per ASM decreased from the prior comparable  period
as a result of the economies of scale as fixed costs were spread across a larger
base of operations, a decrease in fuel prices, and the average ASMs per aircraft
having  increased as the Company added  aircraft  with more seating  capacity as
compared to its earlier fleet additions. Expenses per ASM are influenced to some
degree by the utilization of aircraft and by the seating configuration that each
airline employs. For example,  with the 108 seat all coach seating configuration
selected by the Company on five of its Boeing 737-200 aircraft, the expenses per
ASM of the Company are higher by 11% when compared with the 120 seat alternative
used by many carriers.  The Company's average seats per aircraft for the quarter
ended  June 30,  1998 were 124 as  compared  to 120 seats per  aircraft  for the
quarter ended June 30, 1997.

Liquidity and Capital Resources

       The  Company's  balance sheet  reflected  cash and cash  equivalents  and
short-term  investments  of $14,228,000 at June 30, 1998 and $3,641,000 at March
31, 1998. At June 30, 1998, total current assets were $45,747,000 as compared to
$48,375,000 of total current liabilities, resulting in a working capital deficit
of  $2,628,000.  At March 31, 1998,  total current  assets were  $33,999,000  as
compared to  $50,324,000  of total current  liabilities,  resulting in a working
capital deficit of $16,325,000. The $13,697,000 reduction in the working capital
deficit  is a result of the sale of  4,363,001  shares of the  Company's  common
stock with net proceeds to the Company totaling approximately $13,677,000.

       Cash used by operating activities for the quarter ended June 30, 1998 was
$2,931,000. This is attributable to increases in security, maintenance and other
deposits,  prepaid  expenses and other assets and decreases in accounts  payable
and  other  accrued  expenses,  offset by  decreases  in trade  receivables  and
increases in air traffic liability and accrued maintenance  expenses.  Cash used
by operating activities for the quarter ended June 30, 1997 was $1,099,000. This
is largely  attributable to the Company's net loss for the period,  increases in
maintenance  deposits  and  prepaid  expenses,  offset  by  decreases  in  trade
receivables  and  increases  in air traffic  liability  and accrued  maintenance
expenses.

       Cash used in investing activities for the quarter ended June 30, 1998 was
$5,261,000.  The Company invested $4,933,000 in short-term investments comprised
of  government  backed  agencies  with  maturities  of one year or  less.  These
short-term  investments matured in August 1998 and are presently included in the
Company's cash position.  The Company used $328,000 for capital expenditures for
rotable aircraft components and aircraft leasehold costs and improvements.  Cash
used  in  investing  activities for the quarter ended June 30, 1997 was $790,000
largely a result of capital  expenditures  for rotable  aircraft components  and
aircraft leasehold costs and improvements for an aircraft delivered in May 1997.

        Cash provided by financing  activities  for the quarters  ended June 30,
1998 and 1997 was  $13,846,000  and $134,000,  respectively.  During the quarter
ended June 30,  1998,  the Company  sold  4,363,001  shares of its common  stock
through a private placement to an institutional investor.  Gross proceeds to the
Company  from the  transaction  were  approximately  $14,180,000,  of which  the
Company received net proceeds of approximately $13,677,000. The Company issued a
warrant to this  investor  to  purchase  716,929  shares of common  stock of the
Company at a purchase price of $3.75 per share,  which warrant  expires in April
2002.

       Five of the Company's  Boeing 737-200 aircraft are leased under operating
leases  which  originally  expired  in 1997.  The leases  provide  for up to two
renewal  terms of two years each with no  increase  in basic  rent.  The Company
renewed the leases for the first  two-year  renewal  period and these leases now
expire in 1999.  Under these  leases,  the Company was required to make security
deposits and makes  deposits for  maintenance  of these leased  aircraft.  These
deposits totaled $625,000 and $2,991,000, respectively, at June 30, 1998.

       The Company in November  1995 leased two Boeing  737-300  aircraft  under
operating leases which expire in the year 2000. The Company was required to make
security  deposits and makes deposits for maintenance of these leased  aircraft.
Security and  maintenance  deposits for these  aircraft  totaled  $1,505,000 and
$3,606,000, respectively, at June 30 1998. These aircraft are compliant with FAA
Stage 3 noise  regulations.  The  Company  has  issued to each of the two Boeing
737-300  aircraft  lessors a warrant to purchase 100,000 shares of the Company's
Common Stock at an aggregate purchase price of $500,000.  These warrants, to the
extent not earlier  exercised,  expire upon the expiration dates of the aircraft
leases.

       In June 1996, the Company leased two additional  Boeing 737-200  aircraft
under  operating  leases which expire in the year 2001.  In November  1997,  the
Company renegotiated one of these leases extending the lease term by one year to
2002 in return for a slight reduction in the monthly rental payment. The Company
was required to make security  deposits for these  aircraft  totaling  $858,000.
Commencing  July 1996 the Company  was  required to make  monthly  deposits  for
maintenance of these leased  aircraft.  At June 30, 1998, these deposits totaled
$2,497,000.  These  aircraft  were  "hush-kitted"  by the lessor at its  expense
during  1996  making  them  compliant  with FAA Stage 3 noise  regulations.  The
Company has issued to the aircraft  lessor two warrants,  each of which entitles
the  lessor to  purchase  70,000  shares  of the  Company's  Common  Stock at an
aggregate purchase price of $503,300 per warrant.

       In November  1996,  the Company took delivery of a leased Boeing  737-300
aircraft  which it placed in scheduled  service in December 1996. The lease term
for this aircraft is eight years from date of delivery. The Company was required
to secure the  aircraft  lease with a letter of credit  totaling  $600,000.  The
Company is also required to make monthly cash deposits for  maintenance  of this
aircraft.  As of June  30,  1998,  the  Company  had made  maintenance  deposits
associated with this leased aircraft totaling $1,598,000.

       During the year ended  March 31,  1997,  the  Company  entered  into four
operating lease  agreements for four additional new Boeing 737-300 aircraft with
scheduled deliveries during the Company's year ended March 31, 1998. The Company
took  delivery  of these  aircraft  in May,  August  and  September  1997 and in
February  1998.  In connection  with the Boeing  737-300  aircraft  delivered in
September  1997,  the  Company  has issued to the  lessor a warrant to  purchase
55,000 shares of Common Stock at an aggregate purchase price of $385,000.  As of
June 30, 1998,  the Company had made cash security deposits totaling  $1,616,000
with  respect  to these  aircraft.  During the year ended  March 31,  1998,  the
Company  secured  lease  obligations  for two of these  aircraft with letters of
credit totaling  $1,500,000 and, in turn, $650,000 of cash security deposits was
returned to the Company.  The Company's  restricted cash increased by $1,500,000
to  collateralize  the letters of credit.  Two each of the four lease agreements
have seven and eight year terms from date of delivery,  respectively. Two of the
four leases have up to two one year renewal terms and a third may be renewed for
up to three one year terms. The Company is required to pay monthly cash deposits
to each  aircraft  lessor based on flight  hours and cycles  operated to provide
funding of future scheduled  maintenance costs. As of June 30, 1998, the Company
had maintenance deposits associated with these aircraft totaling $3,168,000.

       The  Company's  aircraft  fleet is currently in  compliance  with Stage 3
noise  level  requirements.  However, 75%  of  the  Company's  fleet  must be in
compliance by January 1, 1999 and 100% must be in compliance by January 1, 2000.
If  the  Company  is  unable  to  secure  three  additional  Stage 3 aircraft by
December  31,  1998,  it will be required  by December 31, 1998  to  retrofit an
existing  Stage 2 aircraft to Stage 3 compliance  or add  a Stage 3 aircraft  an
remove a Stage 2 aircraft  from its certificate, (permitting it to maintain a 14
aircraft fleet),  or remove one  of  its  Stage 2  aircraft from its certificate
(resulting n a 13 aircraft fleet).

       Management is continuing to take steps  designed to improve the Company's
operating  performance.  Effective  January 28,  1997,  the  Company  introduced
electronic  ticketing.  Passengers  who call the Company  directly are given the
option of receiving a paper ticket or a  confirmation  number in lieu of a paper
ticket.  Electronic  ticketing  decreases  certain costs  including  postage and
handling costs,  ticket stock,  and reduced revenue  accounting fees because the
accounting  for  electronic  ticketing  is  automated.   The  Company  also  has
implemented and maintains a booking capability on its Internet site.

       The  Company  has  announced  its  intention  to  perform  its own ground
handling  operations  at DIA  effective  September 1, 1998, a function  which is
currently  being  provided by an independent  contractor.  The Company is in the
process of  acquiring  certain  ground  handling  equipment  with total  capital
expenditures  estimated to be  $850,000.  The Company is seeking  financing  for
these  expenditures  but there can be no assurance that it will be successful in
obtaining the necessary financing.

       The Company is exploring  various  means to increase  revenues and reduce
expenses.  The Company is considering revenue  enhancement  initiatives with new
marketing alliances and ad hoc charters.  Expense reduction programs include the
installation of an upgraded flight operations,  maintenance, and parts inventory
management  information  system which will be installed by the end of the fiscal
year ending March 31, 1999.  Other  potential cost savings  programs  include an
in-house  revenue  accounting  system and conducting  certain heavy  maintenance
checks in-house.  The latter program would require capital expenditures and will
be implemented if the Company is able to increase its capital resources.

       The Company has a contract with a credit card processor that requires the
Company to provide a letter of credit to match the total  amount of air  traffic
liability  associated  with credit card  customers  if the Company does not meet
certain financial  covenants and if the credit card processor  requests that the
collateral be increased.  As of September 30, 1997, the Company did not meet the
financial  covenant  requirements.  In November  1997, the credit card processor
required  an  increase  in the  collateral  amount  from  its  present  level of
$2,000,000 to  $4,000,000,  which  increased the  Company's  current  restricted
investment  balance  accordingly.  As of July 31,  1998,  the  Company  could be
required to increase the collateral amount to $5,738,000.

       Most of the Company's  suppliers  currently  provide goods,  services and
operating equipment on open credit terms. If such terms were modified to require
immediate  cash  payments,  the Company's  cash position would be materially and
adversely affected.

       The Company's  goal is to lease a number of additional  aircraft to serve
additional  cities from Denver.  The Company  believes that  expanding its route
system would  facilitate  a greater  volume of  connecting  traffic as well as a
stable  base of local  traffic  and  offset  the  impact of  higher  DIA-related
operating  costs through more efficient gate  utilization.  The expansion of the
Company's  operations  will entail the hiring of  additional  employees to staff
flight and ground operations in new markets,  and significant initial costs such
as deposits for airport and  aircraft  leases.  Because of the  expansion of the
Company's  business,  and  competition  within the airline  industry which often
requires  quick  reaction by  management  to changes in market  conditions,  the
Company likely will require additional capital to further expand its business.

       Effective  February 11, 1997, United Airlines commenced service using its
low fare United "Shuttle"  between Denver and Phoenix,  Arizona,  and on October
31,  1997 such  service  to Salt Lake City was added by  United.  These are both
markets in which the Company  provides  service,  in  addition to other  markets
where United Airlines provides flights. This additional competition,  as well as
other  competitive  activities by United and other carriers,  have had and could
continue to have a material adverse effect on the Company's revenues and results
of operations.

       The Company has incurred substantial operating losses since its inception
and has a working capital deficit at June 30, 1998. In addition, the Company has
substantial  contractual  commitments for leasing and maintaining aircraft.  The
Company believes that its existing cash balances coupled with improved operating
results will be adequate to fund the Company's operations at least through March
31,  1999.  There  can be no  assurances  however,  that  the  Company  will  be
successful in improving  its operating  results in fiscal 1999. If its operating
results do not  improve,  the Company  anticipates  that it would be required to
obtain additional capital or other financing to fund its operations.

Year 2000 Compliance

       The Company uses information  systems in managing and conducting  certain
aspects of its  business.  The  Company's  systems are  currently  not Year 2000
compliant,  and the Company is in the process of ascertaining the  modifications
that will be  necessary  for its  systems to attain  Year 2000  compliance.  The
Company is taking  measures to address  this problem and has created a Year 2000
committee,  headed by an officer of the Company,  to manage and  coordinate  the
Company's efforts to identify and fix critical date-sensitive systems. While the
Company   believes  it  will  be  able  to  perform  or  obtain  the   necessary
modifications  on a timely basis,  the Company has not determined the costs that
will be necessary for attaining compliance,  and there is no assurance that such
costs will not be  significant.  Failure  by the  Company  and its key  business
partners  (e.g.,  the  FAA,  DOT,  airport  authorities,   suppliers,  and  data
providers)  to  achieve  Year 2000  compliance  on a timely  basis  could have a
significant  adverse impact on the Company's  business,  financial condition and
operating results.

Item 3:  Quantitative and Qualitative Disclosures About Market Risk

       Not applicable.



<PAGE>


                                            PART II. OTHER INFORMATION


Item 1:        Legal Proceedings

               In December  1997 the City of New York filed a petition  with the
               United  States  Court of  Appeals  for the Second  Circuit  for a
               review of an order of the Secretary of Transportation challenging
               the Secretary's award of landing and takeoff slots to the Company
               at New York City's LaGuardia Airport. The Court of Appeals denied
               the Petition in July 1998.

Item 5:        Other Information
               
               Shareholders   are  entitled  to  submit   proposals  on  matters
               appropriate for shareholder action consistent with regulations of
               the Securities and Exchange  Commission and the Company's bylaws.
               Should  a  shareholder  wish to  have a  proposal  appear  in the
               Company's proxy  statement for next year's annual meeting,  under
               the regulations of the Securities and Exchange Commission it must
               be received by the corporate secretary at 12015 East 46th Avenue,
               Denver,  CO 80239 on or before  May 30,  1999.  If a  shareholder
               intends to submit a proposal at the meeting  that is not included
               in the Company's proxy  statement,  and the Shareholder  fails to
               notify the Company prior to June 31, 1998 of such proposal,  then
               the  proxies  appointed  by the  Company's  management  would  be
               allowed  to use their  discretionary  voting  authority  when the
               proposal is raised at the annual meeting, without any discussions
               of the matter in the proxy statement.

Item 6:  Exhibits and Reports on Form 8-K

Exhibit
Numbers

         (a)   Exhibits

              27.1       Financial Data Schecule

         (b)  The  Registrant  filed two  Reports on form 8-K during the quarter
              for which this report is being filed.

              1.  Report filed on May 4, 1998  included  information  under Item
                  Nos.  5  (Other  Events)  and 7  (Financial  Statements).  The
                  financial   statements   consisted  of  Unaudited   Pro  Forma
                  Condensed Financial Statements.

              2.  Report filed on May 28, 1998 included information under 
                  Item No. 5 (Other Events).






<PAGE>



                                   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:  August 7, 1998                    By: /s/ Samuel D. Addoms
                                              ---------------------
                                         Samuel D. Addoms, Principal Executive
                                         Officer and Principal Financial Officer


Date:  August 7, 1998                    By: /s/ Elissa A. Potucek
                                              ----------------------
                                         Elissa A. Potucek, Vice Presdent, 
                                         Controller, Treasurer and Principal 
                                         Accounting Officer