**Table of Contents**

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**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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**FORM 10-K/A**

 
| **x**      | ** ** | **ANNUAL REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**     |
|------------|------------|---------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | **For the fiscal year ended  March 31, 2008**                                                      |
| ** ** | ** ** | **or**                                                                                                  |
| o          | ** ** | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For the transition period from             to               **

** **

**Commission File No. 000-51890**

 

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**FRONTIERAIRLINES HOLDINGS, INC.**

**(Exact name of registrant asspecified in its charter)**

 

| **Delaware**                    | ** ** | **20-4191157**      |
|---------------------------------|------------|---------------------|
| (State or other jurisdiction of |       | (I.R.S. Employer    |
| incorporation or organization)  |       | Identification No.) |

 

**7001 Tower Road**

**Denver, Colorado  80249**

**(720) 374-4200**

(Address, including zipcode and telephone number, including area code, of Registrant’s of principalexecutive office)

 

Securities registeredpursuant to Section 12(b) of the Act:

 
| **Title  of each class:**                     | ** ** | **Name of each exchange on which registered:** |
|-----------------------------------------------|------------|------------------------------------------------|
| **Common Stock, par value $0.001  per share** | ** ** | ** **                                     |

 

Securities registered pursuant to Section 12(g) ofthe Act:

**None**

** **

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Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct.  Yes o No x

 

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) ofthe Act.  Yes o No x

 

Indicate by check mark whether the Registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and(2) has been subject to such filing requirements for the past90 days.  Yes x No o

 

Indicate by check mark if disclosure ofdelinquent filers pursuant to Item 405 of Regulation S-K is not containedherein, and will not be contained, to the best of the registrant’s knowledge,in definitive proxy or information statements incorporated by reference in Part IIIof the Form 10-K or any amendment to the Form 10-K. o

 

Indicate by check mark whether the registrant isa large accelerated filer, an accelerated filer, a non-accelerated filer or asmaller reporting company.  Seedefinition of “large accelerated filer,” “accelerated filer” and “smallerreporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
| Large accelerated  filer o |   | Accelerated  filer x |   | Non-accelerated  filer o                  |   | Smaller  reporting company o |
|---------------------------------|--------|----------------------|--------|------------------------------------------------|--------|-----------------------------------|
|                            |   |                 |   | (Do not  check if a smaller reporting company) |   |                              |

 

Indicate by check mark whether the registrant isshell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

 

The aggregate market value of common stock heldby non-affiliates of the Company computed by reference to the last quoted priceat which such stock sold on such date as reported by the Nasdaq National Marketas of September 30, 2007 was $298,817,926.

 

The number of shares of the Registrant’s commonstock outstanding as of July 28, 2008 was 36,945,744.

 

 

 

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**FRONTIERAIRLINES HOLDINGS, INC.**

**2008Annual Report on Form 10-K/A**

 

**Tableof Contents**

 
| Explanatory  Note |                                                                                            | 3      |
|-------------------|-------------------------------------------------------------------------------------------------|--------|
|              |                                                                                            |   |   |
|              | **PART III**                                                                               |   |   |
|              | ** **                                                                                      |   |   |
| Item 10.          | Directors, Executive Officers and Corporate Governance                                          |   | 3 |
| Item 11.          | Executive Compensation                                                                          |   | 6 |
| Item 12.          | Security Ownership of Certain Beneficial Owners  and Management and Related Stockholder Matters |   | 17 |
| Item 13.          | Certain Relationships and Related Transactions,  and Director Independence                      |   | 19 |
| Item 14.          | Principal Accounting Fees and Services                                                          |   | 20 |
|              |                                                                                            |   |   |
|              | **PART IV**                                                                                |   |   |
|              | ** **                                                                                      |   |   |
| Item 15.          | Exhibits, Financial Statement Schedules                                                         |   | 21 |
| Signatures        |                                                                                            |   | 26 |

 

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**EXPLANATORYNOTE**

 

FrontierAirlines Holdings, Inc. is filing this Amendment No. 1 (this “AmendmentNo. 1”) to its Annual Report on Form 10-K for the fiscal year ended March 31,2008, filed with the Securities and Exchange Commission  (the “SEC”) on June 30, 2008 (the “2008 Form 10-K”),for the purpose of providing the information required by Part III of Form 10-K.  Except as set forth in Part III below,no other changes are made to the 2008 Form 10-K.  Unless expressly stated herein, thisAmendment No. 1 does not reflect events occurring after the filing of the2008 Form 10-K, nor does it modify or update in any way the disclosurescontained in the 2008 Form 10-K. Throughout this report, references to the “Company,” “we,” “our,” or “us”refer to Frontier Airlines Holdings, Inc. (Debtor and Debtor-in-Possessionas of April 10, 2008), and its consolidated subsidiaries, taken as awhole, unless the context otherwise indicates.

 

**PART III**

 

**ITEM 10. Directors, Executive Officers and Corporate Governance**

 

Set forthbelow is information concerning our directors and executive officers.

 

**Board ofDirectors**

 
| **Name**           | ** ** | **Age** | ** ** | **Position(s)**                                  | ** ** |
|--------------------|------------|---------|------------|--------------------------------------------------|------------|
| Sean Menke         |       | 39      |       | President,  Chief Executive Officer and Director |       |
| D. Dale Browning   |       | 71      |       | Director                                         |       |
| Rita M. Cuddihy    |       | 54      |       | Director                                         |       |
| Paul S. Dempsey    |       | 57      |       | Director                                         |       |
| Patricia A. Engels |       | 57      |       | Director                                         |       |
| B. LaRae Orullian  |       | 75      |       | Director                                         |       |
| Jeff S. Potter     |       | 48      |       | Director                                         |       |
| Robert D. Taylor   |       | 47      |       | Director                                         |       |
| James B. Upchurch  |       | 49      |       | Director                                         |       |

 

**Mr. Menke** has been our President, Chief ExecutiveOfficer and a Director since August 2007. Mr. Menke was the Executive Vice President - CommercialStrategy for Air Canada from May 2007 to August 2007, and wasExecutive Vice President and Chief Commercial Officer for Air Canada from July 2005to May 2007.  Mr. Menke hasover 15 years of aviation experience, including serving as our Senior VicePresident - Chief Operating Officer from July 2004 to July 2005,Senior Vice President - Marketing from November 2003 to June 2004,and Vice-President - Marketing and Planning from June 2000 to November 2003.  Mr. Menke held various positions withUnited Airlines, America West Airlines, and Western Pacific Airlines before hisprior tenure at Frontier Airlines.  Mr. Menkeholds an executive MBA from the University of Denver, as well as dual Bachelor’sdegrees in Economics and Aviation Management from Ohio State University.

 

**Mr. Browning** has been a Director since July 1996.  He is a retired bank and bankcardexecutive.  Mr. Browning served from1995 to 2001 as President and Chief Executive Office of ProCard, Inc.,Golden, Colorado, and from 1993 to 1995 as a Senior Consultant to VisaInternational.  He was President andChief Executive Officer of the Colorado National Bank of Denver from 1986through 1993, having concurrently served as Vice Chairman and Chief OperatingOfficer of Colorado National Bankshares and as Chief Executive Officer of RockyMountain BankCard System.  In 1982, hefounded Plus System, Inc., an international automatic teller machinenetwork, and served as President of that company until 1993.  Mr. Browning has served as a director ofCentral States Indemnity Company of Omaha since 1995.

 

**Ms. Cuddihy** has been a Director since November 2006and is currently the Senior Vice President, Renaissance North America withMarriott International, Inc.  Ms. Cuddihyserved as the Regional Vice President, Northern California, Colorado, andOklahoma for Marriott from 2004 to October 2006 and served as the SeniorVice President, Marketing for Marriott from 2002 to 2004.  Prior to joining Marriott International, Ms. Cuddihyserved as the President and Chief Executive Officer of US Airways Shuttle andin several executive level positions at US Airways from 1992 to 2001 in theareas of customer service, planning and marketing.  Ms. Cuddihy has almost 30 years ofairline and travel industry experience, primarily in the areas of marketing andplanning.

 

**Dr. Dempsey** has been a Director since July 1994and Vice-Chair of our board of directors since 1996.  Since 2002, Dr. Dempsey has been theTomlinson Professor of Global Governance in Air & Space Law, andDirector of the Institute of Air & Space Law at McGill University in Montreal,Canada.  From 1979 to 2002, he served asProfessor of Law and Director of the Transportation Law Program at theUniversity of Denver.  He was alsoDirector of the National Center for Intermodal Transportation.  For 13 years, he was host of KWGN-TV’s “YourRight to Say It” public affairs news program. He served as 

 

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Legal Advisor to theChairman, Interstate Commerce Commission, from 1981 through 1982;Attorney-Advisor to the Civil Aeronautics Board’s Office of General Counsel,and its Bureau of Pricing and Domestic Aviation from 1977 to 1979; andAttorney-Advisor to the Interstate Commerce Commission’s Office of Proceedingsfrom 1975 to 1977.  Dr. Dempseyholds the following degrees: A.B.J., J.D., University of Georgia; LL.M., GeorgeWashington University; and D.C.L., McGill University.  Dr. Dempsey is a Fulbright Scholar andhas authored 15 books and more than 75 law review articles on issues oftransportation law, economics, business and policy.  His editorials have appeared in majornewspapers and news magazines.

 

**Ms. Engels**has been aDirector since April 2004.  From2001 to 2004, Ms. Engels served as Executive Vice President, Products andMarketing for Qwest Communications International, Inc. in Denver,Colorado, where she was responsible for the product management, marketing andpricing of Qwest’s $14 billion voice, data, and Internet Protocol product portfolio.  Ms. Engels has extensive seniorleadership experience with Fortune 500 companies, including EDS Corporation,SBC Communications, Ameritech Corporation and United Airlines.  During her tenure with United, Ms. Engelsserved in several capacities, including President and Chief Executive Officerof Mileage Plus, Inc., Vice President of Market Development, and Directorof Market Planning.

 

**Ms. Orullian**has been aDirector since July 1994 and served as Chair of our board of directorsfrom 1995 until 2001, when she became Vice Chair.  Ms. Orullian continues to serve as ViceChair of our board of directors with Dr. Dempsey.  A long-time banker, she is Vice Chair of theboard of directors of Holladay Bank, Holladay, Utah.  From 1999 to 2003, she served on the board ofdirectors and audit committee of Anthem, Inc., a publicly traded companyheadquartered in Indiana with operations in several states.  Ms. Orullian is also on the board ofdirectors of several other non-publicly traded companies in Colorado andUtah.  In addition, she is past NationalPresident and former Chair of the Girl Scouts of the USA.  Among numerous other business and civicactivities, Ms. Orullian currently sits on the Colorado Supreme CourtDisciplinary Hearing Board, and serves on the Board of Directors of ColoradoPublic Television / KBDI, Channel 12-TV.  She was awarded a Doctorate in Humane Lettersfrom Whittier College in 2004.

 

**Mr. Potter** has been a Director since May 2001and was formerly our President and Chief Executive Officer from April 2002to August 2007.  Mr. Potter hasbeen the Chief Executive Officer of Exclusive Resorts, a luxury destinationclub, since August 2007.  Mr. Potterwas our Executive Vice President and Chief Operating Officer in May 2001and was appointed President in August 2001.  Mr. Potter served as Chief ExecutiveOfficer of Vanguard Airlines from May 2000 to April 2001.  Prior to working for Vanguard Airlines, hewas our Vice President of Marketing from 1995 to April 2000.  He has over 20 years of airline andairline related experience, including regional director of commercial marketingfor McDonnell Douglas Corporation and various positions with Pacific SouthwestAirlines, Continental Airlines, Northwest Airlines, and the former FrontierAirlines.

 

**Mr. Taylor** has been a Director since September 2006and is a Founding Partner of Centinela Capital Partners, an alternativeinvestment management firm focused on investments in and along side emergingmanagers.  Prior to joining Centinela, he was a founding partner of BlueCapital, a middle market private equity firm whose investment strategy centeredon post-acquisition value-creation.  While at Blue Capital, Mr. Taylorwas responsible for all aspects of the investment process and firmleadership.  Prior to starting Blue Capital, Mr. Taylor was a partnerat McKinsey & Company.  Mr. Taylor has served on the boardsof numerous private companies, none of which are our affiliates or are publiclytraded.  He also serves or has served on the board of several not-for-profitorganizations, including the National Urban League, where he is currentlySenior Vice Chairman, the Los Angeles Urban League, California Science Center,Stanford Graduate School of Business Management Board, and Stanford Law SchoolBoard of Visitors.  Mr. Taylor earned a B.S. in engineering, summacum laude, from California State University, Northridge (1982), a J.D. fromStanford Law School (1986), and an MBA from the Stanford Graduate School ofBusiness (1986).

 

**Mr. Upchurch** has been a director since October 1998and is the President and Chief Executive Officer of Caltius Capital Management,LP.  He actively manages the investingand lending of approximately $500 million of capital committed to severalmezzanine debt and private equity partnerships. Mr. Upchurch is also a member of the board of directors of severalCaltius portfolio companies, none of which are our affiliates or are publiclytraded.

 

**Executive Officers**

 

In addition to Mr. Menke,our President and Chief Executive Officer, who is also a director, thefollowing executive officers are not directors and serve at the discretion ofthe board of directors.  Each of theofficers devotes his or her full-time efforts to our affairs.

 

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| **Name**               | ** ** | **Age** | ** ** | **Position**                                           | ** ** |
|------------------------|------------|---------|------------|--------------------------------------------------------|------------|
| Ann E. Block           |       | 58      |       | Senior Vice  President, People                         |       |
| Edward M. Christie III |       | 37      |       | Chief  Financial Officer                               |       |
| Gerard A. Coady        |       | 51      |       | Senior Vice  President and Chief Information Officer   |       |
| Christopher L. Collins |       | 49      |       | Executive  Vice President and Chief Operations Officer |       |
| Matthew R. Henry       |       | 42      |       | Vice  President and General Counsel                    |       |
| Heather R. Iden        |       | 35      |       | Vice  President and Controller                         |       |

 

**Ann E.Block** has beenour Senior Vice President, People, since June 2007.  Prior to this appointment, she served as ourSenior Vice President, In-Flight and Administrative Services from November 2003to June 2007.  Previous appointmentswith us include Vice President, In Flight Services and Human Resources (April 2002to November 2003), Vice President, Human Resources and Flight Services (June 2000to April 2002), and Vice President, Human Resources (March 1999 to June 2000).  Before joining us in March 1999, sheserved as Director-Human Resources Strategy and Services for BlueCrossBlueShield of Colorado.  From 1971 to1996, she served in various capacities with Public Service Company ofColorado.  From 1996 to 1997, she servedas Director, Total Compensation for HR Source, Inc.

 

**EdwardM. Christie, III** has been our Chief Financial Officer since June 2008.  Prior to this appointment, he served as ourSenior Vice President, Finance since February 2008 and as our VicePresident, Finance from May 2007 to February 2008.  Prior to May 2007, he held severalpositions with us, including Corporate Financial Administrator; Director ofCorporate Financial Planning; and Senior Director of Corporate FinancialPlanning and Treasury.  Before joining usin December 2002, he served as Director of Marketing and Research and asVice President, Finance, with Alexander Capital Corporation, a company involvedin equipment finance and leasing.

 

**Gerard A.Coady** has beenour Senior Vice President and Chief Information Officer since March 2008.  Prior to this appointment, he served as ourVice President and Chief Information Officer since May 2007.  Prior to joining us, Mr. Coady was theChief Technological Officer and Executive Vice President of Engineering atEvident Software, a provider of software solutions for virtualized applicationsand services.  He also served as ChiefInformation Technology Officer at Xcel Energy in Denver, Colorado.  He has also held leadership positions at IBMand JD Edwards and spent many years with Digital Equipment Corporation, acomputer manufacturer that was acquired by Compaq in 1998 and subsequentlymerged into Hewlett-Packard in May 2002.

 

**ChristopherL. Collins**has been our Executive Vice President and ChiefOperations Officer since August 2007. Previously, he served as our Senior Vice President, Operations since joining us in January 2006.  Mr. Collins has over 20 years ofaviation experience.  Prior to joiningus, he served as Vice President, System Operations for JetBlue Airways from March 1999to December 2005.  Prior to JetBlue,he served Continental Airlines for over a decade in several different executiveand senior management capacities, including six years as Continental’sVice President of Operations and Planning for its Micronesia operations.

 

**MatthewR. Henry** has been our Vice President and General Counselsince March 2008.  Prior to thisappointment, he served as our Senior Corporate Counsel since February 2003.  From March 1999 to November 2002, Mr. Henryserved as Assistant General Counsel for El Paso Electric Company, a publicutility located in El Paso, Texas. Previously, Mr. Henry was a partner at Kemp Smith, PC in El Paso,Texas, where he practiced corporate, securities and bankruptcy law from 1991 to1999.

 

**Heather R. Iden** has been our VicePresident and Controller since February 2008, in which position sheoversees our general accounting, revenue accounting and financial reportingfunctions.  Prior to this appointment,she held two positions as our director of corporate and financial reporting andsenior manager, financial reporting since 2005. Prior to joining us in 2005, Ms. Iden served as manager offinancial reporting and technical accounting for Cenveo, Inc., the world’slargest producer of envelopes and one of the largest commercial printers in NorthAmerica.  Prior to that, she served ascontroller for Cavion Technologies, Inc., a start-up internet bankingcompany that had its initial public offering during her tenure.  Prior to joining Cavion Technologies, Inc.,she worked for Arthur Andersen, LLP in Denver for five years.  Ms. Iden is a certified publicaccountant.

 

**CORPORATE GOVERNANCE**

 

**AuditCommittee**

 

We**have aseparately-designated standing audit committee.  During ourfiscal year ended March 31, 2008, the members of the audit committee wereD. Dale Browning, Rita Cuddihy, Patricia A. Engels, B. LaRaeOrullian (Chair), and 

 

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Robert D. Taylor(Vice Chair), each of whom was an “independent director,” as defined byapplicable securities laws and NASDAQ listing standards.  Although our common stock was delisted fromthe NASDAQ Stock Exchange effective May 22, 2008, we continue to apply theindependence criteria set forth in the NASDAQ listing standards.  The board of directors has determined thatboth D. Dale Browning and B. LaRae Orullian qualify as “auditcommittee financial experts.”

 

**Section 16(a) BeneficialOwnership Reporting Compliance**

 

Section 16(a) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), requiresour directors, officers and holders of more than 10% of our common stock tofile with the SEC initial reports of ownership and reports of changes inownership of our common stock and other equity securities.

 

To our knowledge,based solely on a review of the copies of such reports furnished to us andwritten representations that no other reports were required, we believe thatall required reports of our officers, directors and 10% stockholders under Section 16(a)were timely filed during the fiscal year ended March 31, 2008, except forthe following: (1) one Form 4 relating to Edward M. Christie’sbeneficial ownership, which reported a grant of restricted stock units and agrant of stock option stock appreciation rights; (2) one Form 4relating to Gerard Coady’s beneficial ownership, which reported a grant ofrestricted stock units and a grant of stock option stock appreciation rights; (3) oneForm 4 relating to Paul S. Dempsey’s beneficial ownership, which reportedan open market purchase; (4) one Form 4 relating to Matthew Henry’sbeneficial ownership, which reported a grant of restricted stock units and agrant of stock option stock appreciation rights and (5) a Form 3 forHeather Iden, who became a Section 16 officer in February 2008, andone Form 4 relating to Heather Iden’s beneficial ownership, which reporteda grant of restricted stock units and a grant of stock option stockappreciation rights.  In addition, Forms4 reporting grants of restricted stock units and stock option stockappreciation rights on April 2, 2007 were not filed for any of the Section 16officers receiving such grants.

 

**Codeof Conduct and Ethics**

 

Our board ofdirectors adopted a Code of Business Conduct and Ethics that applies to all ofour directors, officers and employees, including the Chief Executive Officerand the Chief Financial Officer.  Acurrent copy of the Code of Business Conduct and Ethics is available on ourwebsite at www.frontierairlines.com.  Anyamendments to, or waivers from, any provision of the Code of Ethics applicableto our Chief Executive Officer, Chief Financial Officer, or persons performingsimilar functions will be disclosed on our website at www.frontierairlines.com.

 

**ITEM 11. Executive Compensation**

 

**Compensation Discussion &Analysis**

 

**Introduction**

 

On April 10, 2008, Frontier Airlines Holdings, Inc. and itssubsidiaries, Frontier Airlines, Inc. and Lynx Aviation, Inc., filedvoluntary petitions for reorganization under Chapter 11 of Title 11 of theUnited States Code in the United States Bankruptcy Court for the SouthernDistrict of New York.  The cases arebeing jointly administered under Case No. 08-11298 (RDD). See Item 1, “Business”and Item 1A, “Risk Factors” in the 2008 Form 10-k for more information. The compensation discussion andanalysis below pertains primarily to our fiscal year ended March 31, 2008. Because of the bankruptcy filings, the compensation-setting process andany decisions regarding compensation of our executive officers will likely varysignificantly from the process and decisions made in fiscal year 2008 and prior years.  For example, the compensation committeeintends to focus on the importance of continuity of executives during thistransitional period for our company. Except for the severance arrangements described below, we cannot predictwhat compensation arrangements may be put in place for our executive officersduring our bankruptcy proceedings or thereafter.

 

**Overviewof Fiscal Year 2008 Compensation Program Objectives and Design**

 

The compensationcommittee, in conjunction with the entire board, determines the totalcompensation of our President and CEO, reviews and approves the compensation ofour executive officers and is involved in the succession planning for ourexecutive officers.  The compensation committee historically has believedthat an effective compensation program for our executive officers, includingthe named executive officers listed in the Summary Compensation Table, will:

 
| · |   | attract, motivate, and  retain top executive talent by providing comprehensive and market-competitive  compensation, especially for high-impact positions that directly contribute  to stockholder value creation; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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| · |   | encourage a high level  of performance by linking a significant amount of executive pay to our  financial results and operating performance; and                              |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                          |
| · |   | align employee and  stockholder interests and motivate our executive team to achieve goals  consistent with our business strategy and maximize long-term stockholder  return. |

 

Our executivecompensation program has been designed to reward the executive officers for ourachievement of specific annual, long-term and strategic goals, and align theexecutive officers’ and stockholders’ interests by rewarding performance aboveestablished goals, with the ultimate objective of increasing stockholder value,and, during our bankruptcy, as an incentive to retain our executiveofficers.  In order to meet these objectives, the program has consisted ofbase salary, annual incentives, long-term incentives, and benefits.  Thecompensation committee has annually evaluated the executive officers’compensation to ensure that we have the ability to attract and retain superioremployees in key positions and the executive compensation program remainscompetitive compared to the compensation paid to similarly situated executivesof our peer companies.

 

**Determiningand Setting Executive Compensation**

 

The committee hasreviewed the performance of our President and CEO at least annually. The CEOreviews other executive officers’ performance and reports his evaluations tothe compensation committee. The CEO also has recommended to and discussed withthe compensation committee the non-equity compensation elements for executiveofficers, although the committee approves actual compensation awarded. The compensation committee also approves all equity-based compensation to allemployees, including the CEO and other executive officers.  Thecompensation committee generally has made decisions regarding base salaryduring a regularly scheduled meeting in September of each year anddecisions regarding annual bonus targets and equity incentive awards at one ormore regularly scheduled meetings during March of each year. Thecompensation committee continues to review compensation matters throughout theyear and changes or approves compensation at other times in response to hiringneeds, market changes and other occurrences. The committee’s decisions aboutequity awards are not “timed” or otherwise affected by the planned announcementof material information.

 

In 2004, thecompensation committee engaged Compensation Strategies, Inc., an outsideglobal executive compensation consulting firm, to conduct a review of its totalcompensation program for the executive officers. Compensation Strategiesprovided the committee with relevant market data and alternatives that thecommittee considered in making its compensation decisions and developing thecurrent executive compensation program.

 

A significantportion of each executive officer’s compensation opportunity has consisted ofannual and long-term variable compensation that is contingent on theachievement of specific business and strategic goals, and is designed to alignthe executive officer’s interests with those of our stockholders. Compensation has varied among the executive officers and generally increaseswith increased responsibility. In addition, the mix of annual and long-termincentive compensation also varies with the relative weighting of long-termincentive compensation being greater for greater levels ofresponsibility.  Our annual compensation is cash-based, while long-termcompensation has consisted of both cash and equity-based awards.  We allocate between cash and equity-basedcompensation based on established targets reviewed periodically by thecompensation committee.  We have reliedon the process described below in our determination of compensation levels foreach executive officer.

 

In consultationwith Compensation Strategies, the compensation committee approved a group ofcompanies (referred to in this discussion as the “peer companies”) to be usedfor annual benchmarking of our compensation program. These peer companiesrepresent domestic low cost air carriers and regional air carriers withbusiness activities and compensation programs similar to our own. Although thepeer companies consist of companies that vary in size and markets served, webelieve this group represents companies with which we compete for executivetalent.

 

In order todetermine competitive market levels, the compensation committee regularly hasreviewed total compensation levels for similarly situated executives in thesepeer companies.  Each element of compensation as well as totalcompensation are quantified and reviewed to determine our competitivenesscompared to the market.  On an annual basis, the compensation committeealso reviewed the compensation data of the peer companies as well as marketdata from published industry compensation survey sources.  In determiningappropriate individual compensation levels for the NEOs, the compensationcommittee considered this competitive market compensation data, as well as theindividual’s experience and skill set, internal equity considerations, andindividual and Company performance.  Compensation levels for all NEOs,except the CEO, are approved by our board of directors, based on therecommendation of the compensation committee and the CEO.  In the case ofthe CEO, the board of directors reviews and approves compensation levels inexecutive session without the CEO or any other member of management present.

 

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Thecompensation committee reviews the make-up of the peer companies on an on-goingbasis and also looks to larger airlines to evaluate compensation trends in theairline industry.  The peer companiesused in the compensation committee’s review of total compensation levels forfiscal year 2008 consisted of companies participating in the OCI, Inc.2007 Air Industry Executive Compensation Survey and certain publicly tradedlow-cost carriers and regional airlines.   Each company included inthe group is shown below:

 
| ** ** | **Peer Group**                  | ** ** | ** ** |
|------------|--------------------------------------|------------|------------|
|       | Airtran Holdings, Inc.     | ** ** |
|       | Alaska Air Group, Inc.          |       |
|       | ATA Airlines                         |       |
|       | Champion Air                         |       |
|       | Compass Airlines                     |       |
|       | Continental Airlines, Inc.      |       |
|       | Expressjet Holdings, Inc.       |       |
|       | JetBlue Airways Corp.                |       |
|       | Mesa Air Group, Inc.            |       |
|       | Republic Airways Holdings, Inc. |       |
|       | Skywest, Inc.                   |       |
|       | Virgin America                       |       |
|       | US Airways                           |       |

 

**Fiscal Year2008 Executive Compensation Components**

 

Forour fiscal year ended March 31, 2008, the principal components of theexecutive officers’ compensation were:

 

·                  Base salary

·                  Performance-based annual cash incentivecompensation

·                  Long-term equity incentive compensation

·                  Long-term cash incentive compensation

 

**Base Salary**

 

Ourpolicy has been to set salaries for the executive officers at levels that areapproximately 10% below the 50th percentile of the market for their respectiveassignments, with the ability to set actual base salaries based on anassessment of each officer’s experience and skill set, the external demand forcomparably skilled individuals, the individual’s potential impact on ouroverall financial and operational performance, internal equity considerations,and individual and Company performance.  The compensation committee has annuallyreviewed base salaries, and any approved changes typically become effective asof the beginning of September.

 

InAugust and September 2007, the compensation committee approved basesalary increases for our NEOs ranging from 5.3% to 25%.  These adjustmentsreflected the committee’s assessment of individual performance, achievement ofbusiness objectives, and the committee’s desire to maintain the NEOs’ salarylevels relative to the market. We believe that the NEOs’ adjusted base salarieswere at or below the 50th percentile of the market.

 

Afterfiling for bankruptcy on April 10, 2008, we instituted a salary reductionprogram, pursuant to which Sean Menke, our President and Chief ExecutiveOfficer, agreed to a 20% reduction in his base salary, and each other officeragreed to a 10% reduction in such officer’s base salary for the fiscal yearending March 31, 2009.

 

**Annual CashIncentive**

 

Wehave provided an annual cash incentive opportunity to the executive officersunder our Executive Bonus Plan.  The annual cash incentive was designed toencourage the NEOs, other executive officers, and eligible key employees, toincrease our performance through annual cash incentives.  We generallyintended to target annual incentive bonus opportunities at approximately 10%above the 50th percentile of the market for the NEOs (given our below-marketphilosophy regarding base salaries), with the ability to set actualopportunities based on an assessment of each executive officer’s experience andskill set, the external demand for comparably skilled individuals, theindividual’s potential impact on our overall financial and operationalperformance, internal equity considerations, and individual and companyperformance.  The objectives of the annual incentive have been to ensurean appropriate amount of at-risk compensation, to reward the NEOs and othereligible employees on the basis of our profitability within the context of theairline industry, and to promote 

 

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annual performanceconsistent with driving long-term stockholder value.  Incentive bonusopportunities have been reviewed on a regular basis and potentially representeda significant component of total compensation.

 

Forour fiscal year ended March 31, 2008, we established pre-tax profit marginas the performance metric for the annual incentive.  We set minimum,target, and maximum pre-tax profit margins of 2%, 8%, and 12%, respectively, asthe performance levels for fiscal year 2008.  The amount actually receivedby the participants depended on the extent of achievement of the performancelevels.  Under this design, no payments would be made if the minimum performancelevel was not attained.  For the NEOs, target bonus opportunities forfiscal year 2008 ranged from 45% to 75% of base salary.  Initial paymentsfor achievement of the minimum performance level would result in payments equalto 25% of the target opportunities, and achievement of the maximum performancelevel would result in payments equal to 150% of the target opportunities. The initial payment amounts were then adjusted based on the percentile rankingof our pre-tax profit margin compared to the peer group.  If our rankingwas equal to or less than the 25th percentile of the group, the initialpayment amount is multiplied by 50%.  If our ranking was equal to the50th percentile, the initial payment amounts are not changed.  If ourranking was equal to or greater than the 75th percentile, the initialpayment amount is multiplied by 150%.  The determinations of the initialpayments based on our pre-tax profit margin performance and the peerperformance adjustments were to be interpolated for performance levels betweenthose described above.  Finally, the peer adjusted performance paymentsmay be increased or decreased by up to 20% in the discretion of thecompensation committee. We believe that the NEOs’ target bonus opportunitieswere approximately equivalent to the 50th percentile of the market.

 

Forour fiscal year ended March 31, 2008, we did not achieve a pre-tax profitmargin of 2% and no annual cash incentive was awarded.

 

**Long-TermIncentives**

 

Our2004 Equity Incentive Plan was approved by our stockholders at the 2004 AnnualMeeting of Stockholders.  All equity incentives have been granted inaccordance with and subject to the 2004 Equity Incentive Plan.  Ourexecutive officers have had the opportunity to receive a combination of stockappreciation rights, restricted stock units and a cash incentive payment. The long-term nature of these awards (generally three- and five-year vesting)has been intended to promote performance and achievement of corporate goals byexecutive officers and key employees, encourage the growth of stockholder valueand allow the executive officers and key employees to participate in ourlong-term growth and profitability. Due to our bankruptcy filings, it isuncertain whether the long-term equity incentives granted to our executiveofficers, including those for fiscal year 2008 discussed below, will have anyvalue.

 

For our fiscal year ended March 31, 2008, our long-term incentiveprogram consisted of annual awards of stock-only stock appreciation rights(SOSARs), restricted stock units (RSUs), and a performance-based cashincentive.  The program was designed to retain the NEOs and otherexecutives and to focus their attention on our long-term performance. More specifically, the SOSARs and RSUs directly aligned the executive officers’financial interests with those of our  stockholders.  We generallyintended to target the value of our long-term incentive awards at approximately10% above the 50th percentile of the market for the executive officers (givenour below-market philosophy regarding base salaries), with the ability to setactual opportunities based on an assessment of each executive officer’sexperience and skill set, the external demand for comparably skilledindividuals, the individual’s potential impact on our overall financial andoperational performance, internal equity considerations, and individual andcompany performance.

 

*SOSARs*.  SOSARs, which are granted under our 2004 Equity Incentive Plan,are intended to directly link executive compensation to stockholders’ intereststhrough awards the value of which is entirely dependent upon appreciation inour stock price from the date the awards are granted.  The SOSARs aretypically granted during the first quarter of the fiscal year, have a ten-yearexpiration term, and vest 20% on each of the first five anniversaries of thegrant.  This vesting schedule ensures that recipients remain employed withus for an appropriate length of time prior to being able to exercise theSOSARs.  The SOSARs’ exercise prices are equal to our closing common stockprice on the date of grant.  The re-pricing of SOSARs is not permittedunder our Equity Incentive Plan without stockholder approval.  The valueof the SOSARs for each NEO is intended to represent approximately 40% of theNEO’s total long-term incentive compensation at the time of grant.  In April 2008, the compensationcommittee granted SOSARs to our executive officers that vest 50% on the firstanniversary of the date of grant (instead of the typical 20% annual vestingprovision) as a retention incentive. Due to our bankruptcy filing, we do not believe the SOSARs granted underthe 2004 Equity Plan will have any value.

 

*RSUs.* RSUs, which are granted under our 2004 Equity Incentive Plan, areintended to create an incentive to maximize stockholder value and to provide anincentive to remain through the full vesting date of the awards.  The RSUsare typically granted during the first quarter of the fiscal year and vest 100%on the fifth anniversary of the grant.  The value of RSUs for each NEO isintended to represent approximately 20% of the NEO’s total long-term incentivecompensation at the 

 

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time of grant.  In April 2008, the compensationcommittee granted RSUs to our executive officers that vest 50% on the firstanniversary of the date of grant and 50% on the third anniversary of the dateof grant (instead of the typical 100% vesting on the fifth anniversary) as aretention incentive.  Due to ourbankruptcy filing, we do not believe the RSUs granted under the 2004 EquityPlan will have any value.

 

*Performance-Based Cash Incentive.* The performance-based cash incentive isintended to reinforce our strategic business goals, provide an incentive toremain with us, and to reduce the annual share usage under our 2004 EquityIncentive Plan.  The awards for the fiscal year ended March 31, 2008cover the period from April 1, 2007 through March 31, 2008.  Withrespect to these awards, we established average pre-tax profit margin over thethree-year performance period as the performance metric and set minimum,target, and maximum pre-tax profit margins of 4%, 8%, and 12%, respectively, asthe performance levels.  The amount actually received by the participantsdepends on the extent of achievement of the performance levels.  Underthis design, no payments will be made if the minimum performance level is notattained.  For the NEOs, the target opportunities for these awards rangedfrom $76,000 to $221,000.  Initial payment levels for achievement of theminimum performance level would result in payments equal to 50% of the targetopportunities, and achievement of the maximum performance level would result inpayments equal to 150% of the target opportunities.  The initial paymentsare then adjusted based on the percentile ranking of our average pre-tax profitmargin compared to the peer group.  If our ranking is equal to or lessthan the 25th percentile of the group, the initial payment amount ismultiplied by 50%.  If our ranking is equal to the 50th percentile,the initial payment amounts are not changed.  If our ranking is equal toor greater than the 75th percentile, the initial payment amount ismultiplied by 150%.  The determinations of the initial payments based onour pre-tax profit margin performance and the peer performance adjustments areinterpolated for performance levels between those described above.  Thevalue of the performance-based cash incentive for each NEO is intended torepresent approximately 40% of the NEO’s total long-term incentive compensationat the time of grant.

 

**OtherBenefits and Agreements**

 

Ourexecutive officers are provided with the same benefits, such as healthinsurance, life insurance, and participation in our Section 401(k) planand Employee Stock Ownership Plan, as other full-time employees.  None ofthe executive officers is a party to employment or other written agreementswith respect to their employment.  In addition, none of the executiveofficers receive any perquisites.

 

**Arrangements with OurPresident and Chief Executive Officer**

 

EffectiveSeptember 7, 2007, Sean Menke succeeded Jeff  S. Potter as our President and ChiefExecutive Officer.  In connection withhis hiring, Mr. Menke received an annual salary of $325,000, and waseligible to participate in our Executive Bonus Plan and Equity Incentive Planat the same level as Mr. Potter.  Mr. Menkereceived initial grants of 100,000 SOSARs and 30,000 RSUs under these plans.  The SOSARs have a ten-year expiration termand will vest 20% on each of the first five anniversaries of the grant.  The RSUs vest 100% on the fifth anniversaryof the grant.  In addition, we agreed topay certain expenses related to Mr. Menke’s transition from Air Canada toour company.  Due to ourbankruptcy filing, we do not believe the SOSARs or RSUs granted to Mr. Menkewill have any value.

 

**Severance Plan**

 

InJune 2008, the United StatesBankruptcy Court for the Southern District of New York approved aseverance plan that would provide our executive officers and certain otheremployees with severance if they were terminated without cause.  The payments to each of our executiveofficers cannot exceed $144,180, and are subject to reduction under the plan’smitigation requirements.  Thecompensation committee believes that this plan was necessary to encourage theexecutive officers and other employees to continue in employment with ourcompany during our bankruptcy proceedings. Such severance arrangements may be modified or cancelled in connectionwith our Chapter 11 proceedings and any exit or reorganization plan.

 

**Deductibilityof Executive Compensation**

 

Certainawards made under our 2004 Equity Incentive Plan may qualify asperformance-based compensation that will be fully deductible for federal incometax purposes under the $1 million cap rules of Section 162(m) ofthe Internal Revenue Code.  However, in order to design compensationprograms that address our needs, we have not established a policy that mandatesthat all compensation must be deductible under Section 162(m).  Thecompensation committee considers it important to retain flexibility to designcompensation programs, even where compensation payable under our programs maynot be fully deductible, if the programs effectively recognize a full range ofcriteria important to our success. For example, we have not structured ourannual cash bonus plan to be “performance-based” for purposes of Section 162(m),although for our fiscal year ended March 31, 2008, total cash compensationfor each NEO was below the $1 million limit. We grant some equity awards (suchas restricted stock) that are not eligible for the Section 162(m) exception.Our 2004 Equity Incentive 

 

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Plan is intended to allowthe compensation committee to approve performance shares and stock options thatqualify as “performance-based” compensation for purposes of Section 162(m) tothe extent the compensation committee deems appropriate.

 

**Accountingfor Stock-Based Compensation**

 

Beginningon April 1, 2006, we began accounting for stock-based payments inaccordance with the requirements of FASB Statement 123(R).

 

**SummaryCompensation Table**

 

The table below summarizes the cash and non-cash compensation awardedto, earned by or paid to (i) the individuals who served as our ChiefExecutive Officer and Chief Financial Officer during the fiscal year ended March 31,2008, (ii) our next three most highly compensated executive officersduring the fiscal year ended March 31, 2008 and (iii) any formerexecutive officer who would have been among the three most highly compensatedexecutive officers during the fiscal year ended March 31, 2008 but for thefact that such individual did not serve as an executive officer on March 31,2008 (each, a “named executive officer” or “NEO”).

 
| **Name and Principal Position** | ** ** | **Year** | ** ** | **Salary  ($)** | ** ** | **Stock  Awards   ($) (a)** | ** ** | **Option   Awards   ($) (b)** | ** ** | **All Other   Compensation   ($) (c)** | ** ** | **Total   ($)** | ** ** |
|------------------------------------------------|------------|----------|------------|-----------------|------------|---------------------------------------|------------|----------------------------------------------|------------|------------------------------------------------------------|------------|----------------------|------------|
| **Sean Menke,**  President ****and CEO (d)     |       | 2008     |       | $               | 183,542    |                                  | $          | 161,100                                      |       | $                                                          | 310,520    |                 | $          | 527,526 | (e) | $ | 1,182,688 |   |
|                                           |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
| **Jeff S. Potter,**former                      |       | 2008     |       | $               | 161,623    |                                  | $          | 110,826                                      |       | $                                                          | 221,000    |                 | $          | 7,500 |   | $ | 500,949 |   |
| President and CEO (f)                          |       | 2007     |       | $               | 311,250    |                                  | $          | 100,304                                      |       | $                                                          | 200,595    |                 | $          | 10,680 |   | $ | 622,829 |   |
|                                           |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
| **Paul Tate,**former  Chief                    |       | 2008     |       | $               | 267,839    |                                  | $          | 120,690                                      |       | $                                                          | 233,191    |                 | $          | 26,771 |   | $ | 648,491 |   |
| Financial Officer (g)                          |       | 2007     |       | $               | 213,542    |                                  | $          | 50,003                                       |       | $                                                          | 99,998     |                 | $          | 11,835 |   | $ | 375,378 |   |
|                                           |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
| **Christopher L. Collins,**                    |       | 2008     |       | $               | 263,828    |                                  | $          | 82,218                                       |       | $                                                          | 160,346    |                 | $          | 18,606 |   | $ | 524,998 |   |
| Executive VP and COO                           |       | 2007     |       | $               | 194,917    |                                  | $          | 47,503                                       |       | $                                                          | 94,996     |                 | $          | 57,321 | (h) | $ | 347,862 |   |
|                                           |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
| **Ann E. Block,** Sr.  VP                 |       | 2008     |       | $               | 195,833    |                                  | $          | 64,848                                       |       | $                                                          | 121,258    |                 | $          | 21,914 |   | $ | 403,853 |   |
| People                                         |       | 2007     |       | $               | 183,125    |                                  | $          | 35,000                                       |       | $                                                          | 69,997     |                 | $          | 10,665 |   | $ | 289,788 |   |
|                                           |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
| **Gerard A. Coady,**Senior                     |       | 2008     |       | $               | 199,785    |                                  | $          | 16,513                                       |       | $                                                          | 38,767     |                 | $          | 1,905 |   | $ | 256,970 |   |
| VP and CIO                                     |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
|                                           |       |     |       |            |       |                                  |       |                                         |       |                                                       |       |                 |       |
| **John B. Happ,**  former Sr.                  |       | 2008     |       | $               | 182,107    |                                  | $          | 136,800                                      |       | $                                                          | 248,278    |                 | $          | 188,125 | (i) | $ | 755,310 |   |
| VP Marketing & Planning               |       | 2007     |       | $               | 225,000    |                                  | $          | 56,251                                       |       | $                                                          | 112,495    |                 | $          | 3,742 |   | $ | 397,488 |   |

 

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(a)  This column represents the dollar amount recognized ascompensation expense for financial statement purposes with respect to fiscalyear 2008 for the fair value of restricted stock granted in fiscal year 2008 inaccordance with SFAS 123R. Restricted stock awards are valued at the closingmarket price on the date of grant.  Foradditional information on the valuation assumptions with respect to the 2008grants, refer to Note 14 – Equity Based Compensation Plans of the Notesto the Consolidated Financial Statements in the 2008 Form 10-K.

(b)  This column represents the dollar amount recognized ascompensation expense for financial statement reporting purposes with respect tothe 2008 fiscal year for the fair value of stock option stock appreciationrights granted in fiscal year 2008 in accordance with SFAS 123R. Pursuant toSEC rules, the amounts shown exclude the impact of estimated forfeituresrelated to service-based vesting conditions. For additional information on the valuation assumptions with respect tothe 2008 grants, refer to Note 14 – Equity Based Compensation Plans ofthe Notes to the Consolidated Financial Statements in the 2008 Form 10-K.

(c) This column includes the value of the ESOP allocated to eachnamed executive officer in fiscal year 2008 (Menke - $2,958; Potter - $0; Tate- $2,958; Collins - $309; Block - $2,536; Coady - $1,905; and Happ - $2,958)and the 401(k) match we paid in fiscal year 2008 (Menke - $2,031; Potter -$7,500; Tate - $23,813; Collins - $18,297; Block - $19,378; Coady - $0; andHapp - $2,536).

(d)  Mr. Menke is also a director, but receives no additionalcompensation for his service as a director.

 

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(e)  Includes $522,537 in payments related to the buyout of Mr. Menke’scontract with Air Canada, including the taxes associated with the buyout.

(f)   Mr. Potterresigned as our President and CEO in August 2007 but remains adirector.  The compensation that Mr. Potterearned as a director during fiscal year 2008 is set forth in the Compensationof Directors table below.

(g)  Mr. Tate resigned as our Chief Financial Officereffective March 21, 2008.  Hissuccessor, Edward M. Christie, III, was not appointed as Chief FinancialOfficer until June 28, 2008, so Mr. Christie’s compensation is notincluded in this Summary Compensation Table.

(h) In addition to the ESOP and 401(k) match, Mr. Collinsreceived $46,875 in relocation assistance in fiscal year 2007.

(i)  Mr. Happ’s compensation for fiscal year 2008 includes$182,631 in severance pay in connection with his resignation effective January 1,2008.

 

**Grant ofPlan-Based Awards Table**

 

The table below summarizes the cash and equity awards granted duringthe year ended March 31, 2008 to each of the named executive officerslisted in the Summary Compensation Table.

 
| ** **             | ** ** | **Grant** | ** ** | **Estimated Future Payouts  Under Non-Equity Incentive   Plan Awards (a)** | ** ** | **All   Other   Stock   Awards:  Number   of  Shares  of Stock  or Units** | ** ** | **All Other  Option  Awards:  Number  of  Securities  Under-  lying  Options** | ** ** | **Exercise  or Base   Price of   Option   Awards** | ** ** | **Grant  Date  Fair  Value  of   Stock   and   Option ** | ** ** |
|------------------------|------------|-----------|------------|---------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|------------------------------------------------------------------------------|------------|
| **Name**               | ** ** | **Date**  | ** ** | **Threshold (b)**                                                                                        | ** ** | **Target (c)**                                                                                      | ** ** | **Maximum (d)**                                                                | ** ** | **(#) (e)**                                                            | ** ** | **(#) (f)**                                                             | ** ** | **($/Sh)** | ** ** | **Awards (g)** | ** ** |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| Sean Menke             |       | 09/07/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 30,000                                                                      |       | 100,000                                                                      |       | $ | 5.75 |   | $ | 471,620 |   |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| Jeff S. Potter         |       | 04/02/07  |       | $                                                                                                             | 30,469     |                                                                                                     | $          | 243,750                                                                             |       | $                                                                           | 548,438    |                                                                         |       |   |   |   |   |   |   |   |
|                   |       | 04/02/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         | 18,417     |   | 62,963 |   | $ | 6.00 |   | $ | 331,826 |   |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| Paul Tate              |       | 04/02/07  |       | $                                                                                                             | 18,281     |                                                                                                     | $          | 146,250                                                                             |       | $                                                                           | 329,063    |                                                                         |       |   |   |   |   |   |   |   |
|                   |       | 04/02/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 9,375                                                                       |       | 32,051                                                                       |       | $ | 6.00 |   | $ | 168,749 |   |
|                   |       | 08/14/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 6,000                                                                       |       | 20,000                                                                       |       | $ | 5.37 |   | $ | 92,566 |   |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| Christopher L. Collins |       | 04/02/07  |       | $                                                                                                             | 16,250     |                                                                                                     | $          | 130,000                                                                             |       | $                                                                           | 292,500    |                                                                         |       |   |   |   |   |   |   |   |
|                   |       | 04/02/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 8,333                                                                       |       | 28,490                                                                       |       | $ | 6.00 |   | $ | 149,998 |   |
|                   |       | 08/14/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 6,000                                                                       |       | 20,000                                                                       |       | $ | 5.37 |   | $ | 92,566 |   |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| Ann E. Block           |       | 04/02/07  |       | $                                                                                                             | 13,063     |                                                                                                     | $          | 104,500                                                                             |       | $                                                                           | 235,125    |                                                                         |       |   |   |   |   |   |   |   |
|                   |       | 04/02/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 6,333                                                                  |       | 21,652                                                                       |       | $ | 6.00 |   | $ | 113,997 |   |
|                   |       | 08/14/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 5,000                                                                       |       | 15,000                                                                       |       | $ | 5.37 |   | $ | 72,110 |   |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| Gerard A. Coady        |       | 05/14/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 3,020                                                                       |       | 10,328                                                                       |       | $ | 6.31 |   | $ | 54,267 |   |
|                   |       | 03/07/08  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 117                                                                         |       | 462                                                                          |       | $ | 2.53 |   | $ | 1,012 |   |
|                   |       |      |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       |                                                                        |       |                                                                         |       |   |   |   |   |
| John B. Happ           |       | 04/02/07  |       | $                                                                                                             | 18,281     |                                                                                                     | $          | 146,250                                                                             |       | $                                                                           | 329,063    |                                                                         |       |   |   |   |   |   |   |   |
|                   |       | 04/02/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 9,375                                                                       |       | 32,051                                                                       |       | $ | 6.00 |   | $ | 168,749 |   |
|                   |       | 08/14/07  |       |                                                                                                          |       |                                                                                                     |       |                                                                                |       | 5,000                                                                       |       | 15,000                                                                       |       | $ | 5.37 |   | $ | 72,110 |   |
|                        |            |           |            |                                                                                                               |            |                                                                                                          |            |                                                                                     |            |                                                                             |            |                                                                              |            |  |  |  |  |  |  |  |  |  |  |

 

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(a)  No annual cash incentive was awarded to any of our executiveofficers for fiscal year 2008, as we did not achieve a pre-tax profit margin of2%.

(b)  Each executive has a threshold incentive opportunity, payablein cash, if we achieve a pretax profit margin of 2% and are in the25th percentile of performance of our peer group.  No payments willbe made if our pre-tax profit margin is less than 2%.

(c)  Each executive has a target incentive opportunity, payable incash, if we achieve a pretax profit margin of 8% and are in the50th percentile of performance of our peer group.

(d)  Each executive has a maximum incentive opportunity, payablein cash, if we achieve a pretax profit margin of 12% and are in the75th percentile of performance of our peer group.

(e)  Restricted stock vests five years from the grant date.

(f)  SOSARs will vest over five years, with 20% vesting on the firstanniversary of the grant date and 20% vesting on the next four anniversaries ofthe initial vesting date.

(g)  This column represents the grant date fair value of therestricted stock awards and the value of the SOSAR awards under SFAS123R.  For additional information on the valuation assumptions withrespect to the 2008 grants, refer to Note 14 — Equity Based CompensationPlans of the Notes to the Consolidated Financial Statements in the 2008 Form 10-K.

 

**Narrative to Summary Compensation Table and Grants ofPlan-Based Awards Table**

 

Please see our “Compensation Discussion and Analysis” above for anexplanation of our executive compensation plan, a description of the objectivesof our compensation program and our overall compensation philosophy.

 

The compensation committee granted restricted stock awards and SOSARsto our named executive officers in April and August of 2007.  In addition, Mr. Menke and Mr. Coadywere granted restricted stock awards and SOSARs on the dates of theirrespective appointments.  The restrictedstock awards will vest on the fifth anniversary of their grant date and theSOSARs will vest 20% after the first anniversary of the grant date with theremainder vesting 20% on the next four anniversaries of the initial vestingdate.  Due to our bankruptcy filing, wedo not believe the RSUs or SOSARs granted to our executive officers will have anyvalue.

 

**OutstandingEquity Awards at Fiscal Year-End Table**

 

The table below summarizes the unexercised options and unvested stockawards as of March 31, 2008 for each of the named executive officerslisted in the Summary Compensation Table who continued to serve as executiveofficers on March 31, 2008.  Due toour bankruptcy filing, we do not believe the RSUs or SOSARs granted to ourexecutive officers will have any value.

 
| ** **                | ** ** | **Option/SOSAR Awards**                                                                                     | ** ** | **Stock Awards**                                                                                              | ** ** |
|---------------------------|------------|------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------|------------|
| **Name**                  | ** ** | **Number of Securities  Underlying    Unexercised Options  (#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised   Options    (#)    Unexercisable** | ** ** | **Option  Exercise   Price   ($)** | ** ** | **Option   Expiration   Date** | ** ** | **Number of Shares  or Units of Stock  That Have Not  Vested (#)** | ** ** | **Market Value of  Shares or Units of  Stock That Have  Not Vested **

**($)** | ** ** |
| Sean Menke                |       |                                                                                                             |       | 100,000                                                                                                            | (a)        | $ | 5.75 |   | 09/07/17 |   |   |   |   |   |
| Sean Menke                |       |                                                                                                             |       |                                                                                                               |       |   |   |   |   | 30,000 | (b) | $ | 75,900 |   |
| Christopher Collins       |       |                                                                                                             |       |                                                                                                               |       |   |   |   |   | 731 | (c) | $ | 1,849 |   |
| Christopher Collins       |       | 1,287                                                                                                            |       | 1,931                                                                                                              | (d)        | $ | 8.76 |   | 01/09/16 |   |   |   |   |   |
| Christopher Collins       |       |                                                                                                             |       |                                                                                                               |       |   |   |   |   | 6,402 | (e) | $ | 16,197 |   |
| Christopher Collins       |       | 4,121                                                                                                            |       | 16,486                                                                                                             |  (f)  | $ | 7.42 |   | 04/03/16 |   |   |   |   |   |
| Christopher Collins       |       |                                                                                                             |       |                                                                                                               |       |   |   |   |   | 8,333 | (g) | $ | 21,082 |   |
| Christopher Collins       |       |                                                                                                             |       | 28,490                                                                                                             | (h)        | $ | 6.00 |   | 04/02/17 |   |   |   |   |   |
| Christopher  Collins |       |                                                                                                             |       |                                                                                                               |       |   |   |   |   | 6,000 | (i)  | $ | 15,180 |   |
| Christopher Collins       |       |                                                                                                             |       | 20,000                                                                                                             |  (j)  | $ | 5.37 |   | 08/14/17 |   |   |   |   |   |
| Ann Block                 |       | 27,000                                                                                                           |       |                                                                                                               |       | $ | 6.00 |   | 03/29/09 |   |   |   |   |   |
| Ann Block                 |       | 45,000                                                                                                           |       |                                                                                                               |       | $ | 8.55 |   | 05/24/10 |   |   |   |   |   |

 

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| Ann Block    |   | 30,000 |   |   |   | $      | 15.75  |   | 05/24/11 |   |   |   |   |   |
|--------------|--------|--------|--------|--------|--------|--------|--------|--------|----------|--------|--------|--------|--------|--------|
| Ann Block    |   | 5,000  |   |   |   | $      | 15.87  |   | 05/15/12 |   |   |   |   |   |
| Ann Block    |   | 10,000 |   |   |   | $      | 10.45  |   | 03/01/14 |   |   |   |   |   |
| Ann Block    |   |   |   |   |   |   |   |   |     | 2,612  | (k)    | $      | 6,608  |   |
| Ann Block    |   | 5,276  |   | 7,915  | (l)    | $      | 10.05  |   | 04/01/15 |   |   |   |   |   |
| Ann Block    |   |   |   |   |   |   |   |   |     | 4,717  | (e)    | $      | 11,934 |   |
| Ann Block    |   | 3,037  |   | 12,147 | (f)    | $      | 7.42   |   | 04/03/16 |   |   |   |   |   |
| Ann Block    |   |   |   |   |   |   |   |   |     | 6,333  | (g)    | $      | 16,022 |   |
| Ann Block    |   |   |   | 21,652 | (h)    | $      | 6.00   |   | 04/02/17 |   |   |   |   |   |
| Ann Block    |   |   |   |   |   |   |   |   |     | 5,000  | (i)    | $      | 12,650 |   |
| Ann Block    |   |   |   | 15,000 | (j)    | $      | 5.37   |   | 08/14/17 |   |   |   |   |   |
| Gerard Coady |   |   |   |   |   |   |   |   |     | 3,020  | (m)    | $      | 7,641  |   |
| Gerard Coady |   |   |   | 10,328 | (n)    | $      | 6.31   |   |     |   |   |   |   |   |
| Gerard Coady |   |   |   |   |   |   |   |   |     | 117    | (o)    | $      | 296    |   |
| Gerard Coady |   |   |   | 462    | (p)    | $      | 2.53   |   | 03/07/18 |   |   |   |   |   |

 

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| (a) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 09/07/08, 09/07/09, 09/07/10 and 09/07/11.           |
|-----|-------------------------------------------------------------------------------------------------------------------------------|
| (b) | Unvested restricted stock shares will vest on 09/07/2012.                                                                     |
| (c) | Unvested restricted stock shares will vest on 01/09/11.                                                                       |
| (d) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 01/09/09, 01/09/10 and 01/09/11.                     |
| (e) | Unvested restricted stock shares will vest on 04/03/2011.                                                                     |
| (f) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 04/03/08, 04/03/09, 04/03/10 and 04/03/11.           |
| (g) | Unvested restricted stock shares will vest on 04/02/12.                                                                       |
| (h) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 04/02/08, 04/02/09, 04/02/10, 04/02/11 and 04/02/12. |
| (i) | Unvested restricted stock shares will vest on 08/14/12.                                                                       |
| (j) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 08/14/08, 08/14/09, 08/14/10, 08/14/11 and 08/14/12. |
| (k) | Unvested restricted stock shares will vest on 04/01/10.                                                                       |
| (l) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 04/01/08, 04/01/09 and 04/01/10.                     |
| (m) | Unvested restricted stock shares will vest on 05/14/12. Unvested  restricted stock shares will vest on 08/14/2012.            |
| (n) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 05/14/08, 05/14/09, 05/14/10, 05/14/11 and 05/14/12. |
| (o) | Unvested restricted stock shares will vest on 03/07/13.                                                                       |
| (p) | Unvested SOSARs will vest in the amount of 20% of the original grant  on 03/07/09, 03/07/10, 03/07/11, 03/07/12 and 03/07/13. |

 

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**Options Exercised and Stock Vested**

 

During the fiscal year ended March 31,2008, none of the named executive officers exercised any options oracquired  any shares on vesting.

 

**Potential Payments on Terminations orChange in Control**

 

As of March 31, 2008, our NEOs did not have any special guaranteedpayments due on retirement or change of control.  In June 2008, the United StatesBankruptcy Court for the Southern District of New York approved a severanceplan that would provide our executive officers and certain other employees withseverance if they were terminated without cause or terminated for “good reason”following a change in control.  Pleasesee “Compensation Discussion and Analysis – Severance Plan” above.

 

**Compensationof Directors**

 

The table below summarizes the total compensation paidto or earned by each of the non-employee directors for the fiscal year ended March 31,2008.

 
| **Name**             | ** ** | **Fees Earned  or Paid in  Cash ($)** | ** ** | **Stock Awards ($)  (a)** | ** ** | **Total ($)** | ** ** |
|----------------------|------------|-----------------------------------------------------------|------------|-------------------------------------|------------|--------------------|------------|
| Samuel D. Addoms (b) |       | $                                                         | 32,483     |                                | —     |               | $          | 32,483 |   |
| D. Dale Browning     |       | $                                                         | 42,000     |                                | $          | 16,848             |       | $ | 58,848 |   |
| Rita M. Cuddihy      |       | $                                                         | 31,250     |                                | $          | 16,848             |       | $ | 48,098 |   |
| Paul S. Dempsey      |       | $                                                         | 34,250     |                                | $          | 16,848             |       | $ | 51,098 |   |
| Patricia A. Engels   |       | $                                                         | 35,750     |                                | $          | 16,848             |       | $ | 52,598 |   |
| B. LaRae Orullian    |       | $                                                         | 36,250     |                                | $          | 16,848             |       | $ | 53,098 |   |
| Jeff S. Potter (c)   |       | $                                                         | 17,500     |                                | $          | 33,696             |       | $ | 51,196 |   |
| Robert D. Taylor     |       | $                                                         | 33,750     |                                | $          | 16,848             |       | $ | 50,598 |   |
| James B. Upchurch    |       | $                                                         | 32,000     |                                | $          | 16,848             |       | $ | 48,848 |   |

 

----

(a)                    This columnrepresents the dollar amount recognized as compensation expense for financialstatement purposes with respect to 2008 for the fair value of restricted stockgranted in 2008 in accordance with SFAS 123R. Restricted stock awards are valued at the closing market price on thedate of grant.  For additionalinformation on the valuation assumptions with respect to the 2008 grants, referto Note 14 – Equity Based Compensation Plans of the Notes to the ConsolidatedFinancial Statements in our 2008 Form 10-K.

 

(b)                   Mr. Addomsretired from our board of directors on September 6, 2007.  Prior to his retirement, Mr. Addomsreceived compensation pursuant to a Director Compensation Agreement dated April 1,2002.  The agreement provided that Mr. Addomswas entitled to (a) compensation of $75,000 per year for five years aslong as he remained a member of our board of directors, (b) an option topurchase 200,000 shares of our stock under the 1994 Stock Option Plan at anexercise price of $17.00 per share awarded on April 1, 2002, which optionswere fully vested, (c) free lifetime air travel on our airline for Mr. Addomsand his spouse, (d) such group health, life insurance and other benefitsfor Mr. Addoms and his eligible dependents as are provided to, and for thesame rates as, our officers, during Mr. Addoms’ employment, and (e) continuedemployment for five years at an annual salary of $25,000.  In connection with this agreement, Mr. Addomsagreed not to become employed by or provide consulting services to any aircarrier that competes with us for so long as he remained our employee ordirector.  This agreement, whichsuperseded the termination agreement executed by Mr. Addoms during thefiscal year ended March 31, 1999, was terminated upon Mr. Addoms’ retirement.

 

(c)                    Mr. Potterserved as our President and CEO until August 2007.  The compensation that Mr. Potter earnedas President and CEO in fiscal year 2008 is set forth in the SummaryCompensation Table above.

 

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As of March 31, 2008, each non-employee director had the followingnumber of stock options and restricted stock units outstanding:

 
| **Name**           | ** ** | **Stock Awards  (#)** | ** ** | **Option Awards  (#)** | ** ** |
|--------------------|------------|----------------------------|------------|-----------------------------|------------|
| Dale D. Browning   |       | 5,108                      |       | 15,000                      |       |
| Rita M. Cuddihy    |       | 3,108                      |       | —                      |       |
| Paul S. Dempsey    |       | 5,108                      |       | 37,500                      |       |
| Patricia A. Engels |       | 5,108                      |       | 10,000                      |       |
| B. LaRae Orullian  |       | 5,108                      |       | 10,000                      |       |
| Jeff S. Potter     |       | 5,850                      |       | —                      |       |
| Robert D. Taylor   |       | 6,216                      |       | —                      |       |
| James B. Upchurch  |       | 5,108                      |       | 30,000                      |       |

 

During our fiscal year ended March 31, 2008, each director, otherthan Mr. Potter, received: (a) an annual retainer of $20,000; (b) boardmeeting fees of $1,500 per meeting attended in person and $750 per meetingattended telephonically; and (c)  2,925 restricted stock units of ourcommon stock under the 2004 Equity Incentive Plan.  After resigning as President and ChiefExecutive Officer in August 2007, Mr. Potter received $17,500 inboard meeting fees and 5,850 restricted stock units of our common stock underthe 2004 Equity Incentive Plan.  Therestricted stock units will vest on the third anniversary of the date ofgrant.  Mr. Browning also received a$5,000 annual retainer for serving as the chair of the audit committee, Ms. Engelsreceived an annual retainer of $3,000 for serving as the chair of thecompensation committee, and Mr. Dempsey received an annual retainer of$3,000 for serving as the chair of the nominating and corporategovernance  committee.  Thedirectors did not receive any additional compensation or fees for attendingcommittee meetings.  Following our bankruptcyfiling, the directors agreed to reduce their annual retainer and board meetingfees by fifty percent (50%).  Due toour bankruptcy filing, we do not believe the RSUs granted to our directors willhave any value.

 

We reimburse all of our directors for travel and out-of-pocket expensesin connection with their attendance at meetings of the board and committees onwhich they serve, and we permit them, their spouses, and dependent children tofly without charge on our scheduled flights on a stand-by basis.

 

**COMPENSATIONCOMMITTEE REPORT**

 

The compensationcommittee has reviewed and discussed the Compensation Discussion and Analysisrequired by Item 402(b) of Regulation S-K with management and, basedon such review and discussions, the compensation committee recommended to theboard of directors that the Compensation Discussion and Analysis be included inthis Form 10-K/A for the fiscal year ended March 31, 2008.

 

THE COMPENSATIONCOMMITTEE

 
|   |   | Patricia A. Engels —  Chair |
|--------|--------|----------------------------------|
|   |   | Paul S. Dempsey                  |
|   |   | B. LaRae Orullian                |

 

**CompensationCommittee Interlocks and Insider Participation**

 

During our fiscalyear ended March 31, 2008, our compensation committee consisted ofPatricia A. Engels (Chair), Paul S. Dempsey and B. LaRaeOrullian.  There were no interlockingbusiness relationships between us and any member of the compensation committeeduring the fiscal year.

 

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**ITEM12.  Security Ownership of CertainBeneficial Owners and Management and Related Stockholder Matters**

 

**Equity Compensation Plan Information**

 

The following table summarizes our equity compensationplans as of March 31, 2008.

 
| **Plan Category**                                       | ** ** | **Number of Securities  to be Issued upon  Exercise of Outstanding  Options, Warrants,  and Rights** | ** ** | **Weighted Average  Exercise Price of  Outstanding  Options, Warrants,  and Rights ($ )** | ** ** | **Number of Securities  Available for  Future Issuance  Under Equity  Compensation Plans** | ** ** |
|--------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------|------------|
| Equity compensation plans approved by  stockholders (1) |       | 2,568,606                                                                                                                                         |       | $                                                                                                                            | 9.19       |                                                                                                                     | 1,560,042  |   |
| Equity compensation plans not approved by  stockholders      |       | —                                                                                                                                            |       | —                                                                                                                       |       | —                                                                                                                   |       |
| Total                                                        |       | 2,568,606                                                                                                                                         |       |                                                                                                                         |       | 1,560,042                                                                                                                |       |
|                                                              |            |                                                                                                                                                   |            |                                                                                                                              |            |                                                                                                                          |            |  |

 

----

(1)            As of March 31, 2008, these figuresinclude 2,252,674 outstanding options and SOSARs with a weighted averageexercise price of $9.59, and 315,932 restricted stock units with a weightedaverage grant date market value of $6.88.  See Note 14 of Notes toFinancial Statement in our Annual Report on Form 10-K for the fiscal yearended March 31, 2008 for a description of equity based compensation plans.

 

**Security Ownership of Certain BeneficialOwners and Management**

 

The followingtable sets forth certain information regarding beneficial ownership of ourcommon stock as of July 28, 2008 by: (i) each director andnominee for director; (ii) each current executive officer listed in theSummary Compensation Table; (iii) all directors and executive officers asa group; and (iv) each person who we know owns beneficially more than fivepercent of our outstanding common stock. Unless otherwise specified, the address of each person named is 7001Tower Road, Denver Colorado 80249-7312.

 
| **Name and Address of Beneficial Owner**                                    | ** ** | **Shares  Beneficially  Owned** | ** ** | **Percentage of  Ownership (1)** | ** ** |
|------------------------------------------------------------------------------------------------------|------------|---------------------------------|------------|--------------------------------------------|------------|
| Directors and Named Executive Officers:                                                              |       |                            |       |                                       |       |
| D. Dale Browning                                                                                     |       | 62,000                          | (2)        | *                                          |       |
| Rita M. Cuddihy                                                                                      |       | 1,000                           |       | *                                          |       |
| Paul S. Dempsey                                                                                      |       | 45,000                          | (3)        | *                                          |       |
| Patricia A. Engels                                                                                   |       | 16,000                          | (4)        | *                                          |       |
| B. LaRae Orullian                                                                                    |       | 52,225                          | (5)        | *                                          |       |
| Robert D Taylor                                                                                      |       | 0                               |       | *                                          |       |
| James B. Upchurch                                                                                    |       | 181,700                         | (6)        | *                                          |       |
| Jeff S. Potter                                                                                       |       | 0                               |       | *                                          |       |
| Ann E. Block                                                                                         |       | 141,763                         | (7)        | *                                          |       |
| Christopher L. Collins                                                                               |       | 19,325                          | (8)        | *                                          |       |
| Sean Menke                                                                                           |       | 34,536                          | (9)        | *                                          |       |
| Gerard A. Coady                                                                                      |       | 2,442                           | (10)       | *                                          |       |
| Other Executive Officers                                                                             |       | 22,427                          | (11)       | *                                          |       |
| All directors and executive officers as a  group (15 persons)                                        |       | 578,418                         | (12)       | 1.57                                       | %          |
|                                                                                                 |       |                            |       |                                       |       |
| Five Percent and Greater Stockholders:                                                               |       |                            |       |                                       |       |
| Yong P. Duan    c/o Sy, Lee & Chen   362 W. Garvey Avenue   Monterey Park, California 91754 |       | 3,405,000                       | (13)       | 9.22                                       | %          |

 

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| Sam  Liao & Victoria Liao   3500 W. Olive Avenue, #650   Burbank, California 91505                                                                                                                                                                                             |   | 3,113,684 | (14)   | 8.43   | %      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                    |   |      |   |   |   |
| Dimensional  Fund Advisors LP   1299 Ocean Avenue, 11th Floor   Santa Monica, CA 90401                                                                                                                                                                                                  |   | 3,103,468 | (15)   | 8.40   | %      |
|                                                                                                                                                                                                                                                                                    |   |      |   |   |   |
| Donald  Smith & Co., Inc.   152 West 57th Street    New York, New York 10019                                                                                                                                                                                         |   | 3,026,261 | (16)   | 8.19   | %      |
|                                                                                                                                                                                                                                                                                    |   |      |   |   |   |
| T. Rowe  Price Associates, Inc.   100 E. Pratt Street   Baltimore, Maryland 21202                                                                                                                                                                                                  |   | 2,534,700 | (17)   | 6.86   | %      |
|                                                                                                                                                                                                                                                                                    |   |      |   |   |   |
| Whitebox  Advisors, LLC  Whitebox Convertible Arbitrage Advisors LLC   Whitebox Convertible Arbitrage Partners, L.P.   Whitebox Convertible Arbitrage Fund, L.P.   Whitebox Convertible Arbitrage Fund, Ltd.   3033 Excelsior Boulevard   Suite 300   Minneapolis, Minnesota 55416 |   | 2,563,681 | (18)   | 6.94   | %      |

 

----

| *      | Less than 1%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (1)    | Unless otherwise  indicated, we believe that all persons named in the table have sole voting  and investment power with respect to all shares of common stock beneficially  owned by them. A person is deemed to be the beneficial owner of securities  that can be acquired by such person within 60 days from July 28,  2008 upon the exercise of options, warrants or convertible securities that  are held by such person. This table assumes a base of 36,945,744 shares of  common stock outstanding as of July 28, 2008 which number does not  include shares underlying outstanding options, warrants or convertible  securities. This table also assumes the March 31, 2008 closing price of  $2.53 for our common stock to determine the number of shares, if any,  beneficially owned under an individual’s stock only stock appreciation rights  (SOSARs). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    | Includes 15,000 shares  subject to vested options and 2,000 shares subject to restricted stock units  that will vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (3)    | Includes 37,500 shares  subject to vested options and 2,000 shares subject to restricted stock units  that will vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (4)    | Includes 10,000 shares  subject to vested options and 2,000 shares subject to restricted stock units  that will vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (5)    | Includes 10,000 shares  subject to vested options and 2,000 shares subject to restricted stock units  that will vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (6)    | Includes 90,000 shares  held by Upchurch Trust, 20,000 shares held in trust for Mr. Upchurch’s  sons, 4,500 shares held by Mr. Upchurch’s IRA, 30,000 shares subject to  vested options and 2,000 shares subject to restricted stock units that will  vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (7)    | Includes 117,000 shares  subject to vested options, 3,444 vested shares allocated under the ESOP,  18,319 shares subject to vested SOSARs and 3,000 shares subject to SOSARs  that will vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (8)    | Includes 98 vested  shares allocated to Mr. Collins under the ESOP, 15,227 shares subject to  vested SOSARs and 4,000 shares subject to SOSARs that will vest within 60  days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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| (9)        | Includes 584 vested  shares allocated to Mr. Menke under the ESOP and 20,000 shares subject  to SOSARs that will vest within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (10)       | Includes 376 vested  shares allocated to Mr. Coady under the ESOP and 2,066 shares subject to  vested SOSARs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (11)       | Includes 18,000 shares  the other executive officers have the right to acquire by exercising options,  2,773 vested shares allocated under the ESOP to these other executive officers,  and 1,554 shares subject to vested SOSARs awarded to these other officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (12)       | Includes 237,500 shares  subject to vested stock options, 7,275 vested shares allocated under the  ESOP, 10,000 shares subject to vested restricted stock units or restricted  stock units that will vest within 60 days, 64,166 shares subject to vested  SOSARs or SOSARs that will vest within 60 days, and 20,000 shares held in  trust for a director’s family members.                                                                                                                                                                                                                                                                                                                                         |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (13)       | Reflects beneficial  ownership as of January 22, 2008.  Information with respect to Yong  Ping Duan is based solely on a Schedule 13G filed with the SEC on  January 29, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (14)       | Reflects beneficial  ownership as of July 6, 2007. Information with respect to Sam  Liao & Victoria Liao is based solely on a Schedule 13G filed with  the SEC on July 9, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (15)       | Reflects beneficial  ownership as of December 31, 2007. Information with respect to  Dimensional Fund Advisors LP, f/k/a Dimensional Fund Advisors Inc. (DFA), is  based solely on Amendment No. 3 to Schedule 13G filed with the SEC  on February 6, 2008. The Schedule 13G notes that these shares are  owned by various individual and institutional investors that DFA serves as  investment adviser with power to direct investments and/or sole power to vote  the shares. For purposes of reporting requirements under the Exchange Act,  DFA may be deemed to be a beneficial owner of these shares; DFA, however,  expressly disclaims that it is the beneficial owner of these shares. |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (16)       | Reflects beneficial  ownership as of December 31, 2007. Information with respect to Donald  Smith & Co., Inc. is based solely on a Schedule 13G filed with  the SEC on February 8, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (17)       | Reflects beneficial  ownership as of December 31, 2007. Information with respect to  T. Rowe Price Associates Inc. is based solely on Amendment No. 5 to  Schedule 13G filed with the SEC on February 13, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|  (18) | Reflects beneficial  ownership as of December 31, 2007. Information with respect to Whitebox  Advisors, LLC (“Whitebox”) and is based solely on a Schedule 13G filed  with the SEC on February 14, 2008. The Schedule 13G notes that  these shares are owned by various institutional investors that Whitebox  serves as investment adviser with power to direct investments and/or sole  power to vote the shares. For purposes of reporting requirements under the  Exchange Act, Whitebox may be deemed to be a beneficial owner of these  shares.                                                                                                                                       |

 

**ITEM 13. Certain Relationships and Related Transactions, and DirectorIndependence**

 

**Policy on Related Person Transactions**

 

Our nominating andcorporate governance committee charter requires the nominating and corporategovernance committee to review all related party transactions and determinewhether the transactions are appropriate for us to undertake.  Ifappropriate, the nominating and corporate governance committee is authorized toapprove the transaction.

 

**Director Independence**

 

Each of thedirectors other than Mr. Menke, our President and Chief Executive Officer,and Mr. Potter, who served as our President and Chief Executive Officeruntil August 2007, qualify as “independent” under the NASDAQ rules.  Although our common stock was delisted fromthe NASDAQ Stock Exchange effective May 22, 2008, we continue to apply theindependence criteria set forth in the NASDAQ listing standards.  The NASDAQ independence definition includesobjective measures that disqualify a director from being independent, includingwhether the director is an employee of the company or has engaged in varioustypes of business dealings with the company. These objective measures assist our board of directors in makingdeterminations of director independence under the NASDAQ rules.  Our board of directors makes a determinationregarding the independence of each director annually based on all relevantfacts and circumstances.  Although adirector who is not disqualified under the NASDAQ rules will be presumedto be independent (except for purposes of 

 

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serving as a member ofthe audit committee), our board may make an affirmative determination that adirector is not independent based on its review of other factors.

 

Applying thesestandards and the NASDAQ independence criteria, our board of directors has madea subjective determination as to each independent director that norelationships exist that, in the opinion of the board, would interfere with theexercise of such director’s independent judgment in carrying out the responsibilitiesof a director.  In making thesedeterminations, the directors reviewed and discussed information provided bythe company and the directors with regard to each director’s business andpersonal activities as they may relate to the company and its management.

 

**ITEM 14. Principal Accounting Fees and Services**

 

The following table presents fees for audit servicesand other professional services provided by KPMG LLP for fiscal years ended March 31,2008 and 2007:

 
| ** **                   | ** ** | **2008** | ** ** | **2007** | ** ** |
|------------------------------|------------|----------|------------|----------|------------|
| Audit Fees                   |       | $        | 987,196    |     | $          | 896,000 |   |
| Audit-related Fees           |       | $        | 32,500     |     | $          | 39,215 |   |
| Audit and Audit-related Fees |       | $        | 1,019,696  |     | $          | 935,215 |   |
| Tax Fees                     |       | $        | 3,404      |     | $          | 3,775 |   |
|                         |       |     |       |     |       |
| All other Fees               |       | 0        |       | 0        |       |
| Total Fees                   |       | $        | 1,023,100  |     | $          | 938,990 |   |

 

For purposes of thepreceding table, the professional fees are classified as follows:

 

*Audit fees* for the fiscal year ended March 31,2008 consist of fees for professional services provided in connection with theaudit of the consolidated financial statements, the audit of internal control overfinancial reporting, and review of quarterly consolidated financial statementson Form 10-Q, including bankruptcy related transactions.

 

*Audit-related fees* relate to the audit of passengerfacility charges, reviews of SEC filings, consents, registration statements,and assistance with responding to SEC comment letters.

 

*Tax fees* include fees for tax compliance.

 

**Audit Committee Pre-Approval Policies and Procedures**

 

Consistent withSEC rules regarding auditor independence, the audit committee pre-approvesall audit and permissible non-audit services provided by the independentauditors.  Prior to engaging theindependent auditors, the audit committee reviews a list of audit,audit-related, and tax services that the independent auditor expects to provideduring the fiscal year, as well as the proposed fees for each of theseservices.  The audit committeepre-approves the services and the related proposed fees if the services arecompatible with maintaining the auditor’s independence.  During the year, circumstances may arise whenit may become necessary to engage the independent auditors for additionalservices not contemplated in the initial annual proposal.  In those instances, the audit committee mustpre-approve the additional services and related fees before the independentauditors may be engaged to provide the additional services.  All services KPMG LLP performed during fiscalyear 2008 were approved under the audit committee’s pre-approval guidelines.

 

20

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Table of Contents

 

**PART IV**

 

**Item 15. Exhibits, Financial Statement Schedules**

 
| **Exhibit**                                                                                          | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Numbers**                                                                                          | ** ** | **Description of Exhibits**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Exhibit 2  – Plan of acquisition, reorganization, arrangement, liquidation or  succession: |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.1                                                                                                  |       | Agreement and Plan of Merger, dated as of  January 31, 2006, by and among Frontier Airlines, Inc., Frontier  Airlines Holdings, Inc., and FA Sub, Inc. (Annex I to Amendment  No. 1 to the Registration Statement on Form S-4 filed by Frontier  Airlines Holdings, Inc. on February 14, 2006, File  No. 333-131407).                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Exhibit 3  – Articles of Incorporation and Bylaws:                                         |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.1                                                                                                  |       | Amended and Restated Certificate of  Incorporation of Frontier Airlines Holdings, Inc. (Annex II to Amendment  No. 1 to the Registration Statement on Form S-4 filed by Frontier  Airlines Holdings, Inc. on February 14, 2006, File  No. 333-131407).                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.2                                                                                                  |       | Bylaws of Frontier Airlines  Holdings, Inc. (Annex III to Amendment No. 1 to the Registration  Statement on Form S-4 filed by Frontier Airlines Holdings, Inc. on  February 14, 2006, File No. 333-131407).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Exhibit 4 – Instruments defining the  rights of security holders:                          |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.1                                                                                                  |       | Specimen common stock certificate of  Frontier Airlines Holdings, Inc. (Exhibit 4.1 to the Company’s  Annual Report on Form 10-K for the year ended March 31, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.2                                                                                                  |       | Frontier Airlines, Inc. Warrant to  Purchase Common Stock, No. 1 — Air Transportation Stabilization Board.  Two Warrants, dated as of February 14, 2003, substantially identical in  all material respects to this Exhibit, have been entered into with each of  the Supplemental Guarantors granting each Supplemental Guarantor a warrant to  purchase 191,697 shares under the same terms and conditions described in this  Exhibit. Portions of this Exhibit have been excluded from the publicly  available document and an order granting confidential treatment of the  excluded material has been received. (Exhibit 4.6 to the Company’s  Current Report on Form 8-K dated March 25, 2003). |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.2(a)                                                                                               |       | Warrant Supplement to Frontier Airlines, Inc. Warrant to Purchase Common Stock, No. 1 — Air Transportation Stabilization Board. Two Warrant Supplements dated March 17, 2006, substantially identical in all material respects to this Exhibit have been entered into with each of the Supplemental Guarantors. (Exhibit 4.2(a) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2006)                                                                                                                                                                                                                                                                                  |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3                                                                                                  |       | Registration Rights Agreement dated as of  February 14, 2003 by and between and Frontier Airlines, Inc. as the  Issuer, and the Holders of Warrants to Purchase Common Stock. Portions of  this Exhibit have been omitted excluded from the publicly available  document and an order granting confidential treatment of the excluded  material has been received. (Exhibit 4.5 to the Company’s Current Report  on Form 8-K dated March 25, 2003).                                                                                                                                                                                                                                                            |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Exhibit 10 – Material Contracts:                                                           |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.1                                                                                                 |       | Airport Use and Facilities Agreement,  Denver International Airport (Exhibit 10.7 to the Company’s Annual  Report on Form 10-KSB for the year ended March 31, 1995; Commission  File No. 0-4877).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.2                                                                                                 |       | Space and Use Agreement between Continental  Airlines, Inc. and the Company. (Exhibit 10.43 to the Company’s  Annual Report on Form 10-K for the year ended March 31, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.2(a)                                                                                              |       | Second Amendment to Space and Use Agreement  between Continental Airlines, Inc. and the Company. Portions of this  Exhibit have been omitted and filed separately with the Securities and  Exchange Commission in a confidential treatment request under Rule 24b-2  of the Securities Exchange Act of 1934, as amended  (Exhibit 10.3(a) to the Company’s Annual Report on Form 10-K  for the year ended March 31, 2003).                                                                                                                                                                                                                                                                                |

 

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| 10.3    |   | Airbus A318/A319 Purchase Agreement dated  as of March 10, 2000 between AVSA, S.A.R.L., Seller, and Frontier  Airlines, Inc., Buyer. Portions of this exhibit have been excluded from  the publicly available document and an order granting confidential treatment  of the excluded material has been received. (Exhibit 10.51 to the  Company’s Annual Report on Form 10-K for the year ended March 31,  2000).                                                                                                                                                                                                                                                                                                                                                                            |
|---------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.3(a) |   | Amendment No. 9 to the A318/A319  Purchase Agreement dated as of March 10, 2000 between AVSA, S.A.R.L. and  Frontier Airlines, Inc. Portions of this exhibit have been excluded from  the publicly available document and filed separately with the SEC in a  confidential treatment request under Rule 24b-2 of the Securities  Exchange Act of 1934, as amended. (Exhibit 10.3(a) to the Company’s  Annual Report on Form 10-K for the year ended March 31, 2006).                                                                                                                                                                                                                                                                                                          |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.4    |   | Aircraft Lease Common Terms Agreement dated  as of April 20, 2000 between General Electric Capital Corporation and  Frontier Airlines, Inc. Portions of this exhibit have been excluded from  the publicly available document and an order granting confidential treatment  of the excluded material has been received. (Exhibit 10.52 to the  Company’s Annual Report on Form 10-K for the year ended March 31,  2000).                                                                                                                                                                                                                                                                                                                                                                     |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.5    |   | Aircraft Lease Agreement dated as of  April 20, 2000 between Aviation Financial Services, Inc., Lessor,  and Frontier Airlines, Inc., Lessee, in respect of 15 Airbus A319  Aircraft. After 3 aircraft were leased under this Exhibit with Aviation  Financial Services, Inc. as Lessor, related entities of Aviation  Financial Services, Inc. replaced it as the Lessor, but each lease with  these related entities is substantially identical in all material respects to  this Exhibit. Portions of this exhibit have been excluded from the publicly  available document and an order granting confidential treatment of the  excluded material has been received. (Exhibit 10.53 to the Company’s  Annual Report on Form 10-K for the year ended March 31, 2000). |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.6    |   | Lease dated as of May 5, 2000 for  Frontier Center One, LLC, as landlord, and Frontier Airlines, Inc., as  tenant. Portions of this exhibit have been excluded from the publicly  available document and an order granting confidential treatment of the  excluded material has been received. (Exhibit 10.55 to the Company’s  Annual Report on Form 10-K for the year ended March 31, 2000).                                                                                                                                                                                                                                                                                                                                                                                               |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.6(a) |   | Amendment Number Two to Lease Agreement.  Portions of this exhibit have been omitted and filed separately with the  Securities and Exchange Commission in a confidential treatment request under  Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  (Exhibit 10.7(a) to the Company’s Annual Report on Form 10-K  for the year ended March 31, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                          |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.7    |   | Operating Agreement of Frontier Center One,  LLC, dated as of May 10, 2000 between Shea Frontier Center, LLC, and  7001 Tower, LLC, and Frontier Airlines, Inc. Portions of this exhibit  have been excluded from the publicly available document and an order granting  confidential treatment of the excluded material has been received.  (Exhibit 10.56 to the Company’s Annual Report on Form 10-K for the  year ended March 31, 2000).                                                                                                                                                                                                                                                                                                                                                 |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.8    |   | Standard Industrial Lease dated  April 27, 2000, between Mesilla Valley Business Park, LLC, landlord, and  Frontier Airlines, Inc., tenant. Portions of this exhibit have been  excluded from the publicly available document and an order granting  confidential treatment of the excluded material has been received. (Exhibit 10.57  to the Company’s Annual Report on Form 10-K for the year ended  March 31, 2000).                                                                                                                                                                                                                                                                                                                                                                     |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.9    |   | General Terms Agreement No. 6-13616  between CFM International and Frontier Airlines, Inc. Portions of this  exhibit have been excluded from the publicly available document and an order  granting confidential treatment of the excluded material has been received.  (Exhibit 10.60 to the Company’s Quarterly Report on Form 10-Q for  the quarter ended September 30, 2000).                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.10   |   | Lease Agreement dated as of December 15,  2000 between Gateway Office Four, LLC, Lessor, and Frontier  Airlines, Inc., Lessee. (Exhibit 10.61 to the Company’s Quarterly  Report on Form 10-Q for the quarter ended December 31, 2000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.11   |   | Code Share Agreement dated as of  May 3, 2001 between Frontier Airlines, Inc. and Great Lakes  Aviation, Ltd. Portions of this exhibit have been excluded from the publicly  available document and an order granting confidential treatment of the  excluded material has been received. (Exhibit 10.62 to the Company’s  Annual Report on Form 10-K for the year ended March 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                    |

 

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| 10.11(a)  |   | Amendment No. 1 to the Codeshare  Agreement dated as of May 3, 2001 between Frontier Airlines, Inc.  and Great Lakes Aviation, Ltd. Portions of the exhibit have been excluded  from the publicly available document and an order granting confidential  treatment of the excluded material has been received.  (Exhibit 10.62(a) to the Company’s Quarterly Report on  Form 10-Q for the quarter ended December 31, 2001).                                                                                                                                                                                                                                                                                                     |
|-----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| +10.12    |   | Employee Stock Ownership Plan of Frontier  Airlines, Inc. as amended and restated, effective January 1, 1997  and executed February 5, 2002. (Exhibit 10.66 to the Company’s  Quarterly Report on Form 10-Q for the quarter ended December 31,  2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| +10.12(a) |   | Amendment of the Employee Stock Ownership  Plan of Frontier Airlines, Inc. as amended and restated, effective  January 1, 1997 and executed February 5, 2002 for EGTRRA.  (Exhibit 10.66(a) to the Company’s Quarterly Report on  Form 10-Q for the quarter ended December 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.12(b)  |   | Second Amendment to the Employee Stock  Ownership Plan of Frontier Airlines, Inc. executed March 30, 2006  and effective April 3, 2006. (Exhibit 10.12(b) to the  Company’s Annual Report on Form 10-K for the year ended March 31,  2006).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| +10.13    |   | Director Compensation Agreement between  Frontier Airlines, Inc. and Samuel D. Addoms dated effective  April 1, 2002. This agreement was modified on April 1, 2003, to  expressly describe the second installment exercise period as on or after  December 31, 2003, and the third installment exercise period as on or  after April 1, 2004. (Exhibit 10.67 to the Company’s Annual Report  on Form 10-K for the year ended March 31, 2002).                                                                                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| +10.13(a) |   | Amendment  No. 2 to the Director Compensation Agreement between Frontier  Airlines, Inc. and Samuel D. Addoms dated effective April 1,  2003. (Exhibit 10.13(a) to the Company’s Quarterly Report on  Form 10-Q for the quarter ended September 30, 2006).                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.14     |   | Secured Credit Agreement dated as of  October 10, 2002 between Frontier Airlines, Inc. and Credit  Agricole Indosuez in respect to three Airbus 319 aircraft. Portions of this  exhibit have been excluded form the publicly available document and an order  granting confidential treatment of the excluded material has been received.  (Exhibit 10.75 to the Company’s Quarterly Report on Form 10-Q/A for  the quarter ended September 30, 2002).                                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.15     |   | Aircraft Mortgage and Security Agreement  dated as of October 10, 2002 between Frontier Airlines, Inc. and  Credit Agricole Indosuez in respect to 3 Airbus 319 aircraft. Portions of  this exhibit have been excluded form the publicly available document and an  order granting confidential treatment of the excluded material has been  received. (Exhibit 10.76 to the Company’s Quarterly Report on  Form 10-Q/A for the quarter ended September 30, 2002).                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.16     |   | Codeshare Agreement dated as of September 18,  2003 between Horizon Air Industries, Inc. and Frontier  Airlines, Inc. Portions of this exhibit have been omitted and filed  separately with the Securities and Exchange Commission in a confidential  treatment request under Rule 24b-2 of the Securities Exchange Act of  1934, as amended. (Exhibit 10.23 to the Company’s Quarterly Report on  Form 10-Q for the quarter ended September 30, 2003).                                                                                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.17     |   | Aircraft Lease Agreement dated as of  December 5, 2003 between International Lease Finance Corporation, Inc.,  and Frontier Airlines, Inc., Lessee, in respect of 1 Airbus A319  Aircraft. Frontier has signed leases for 4 additional Airbus 319 aircraft  with this Lessor under Aircraft Lease Agreements that are substantially  identical in all material respects to this Exhibit. Portions of this  Exhibit have been omitted and filed separately with the Securities and  Exchange Commission in a confidential treatment request under Rule 24b-2  of the Securities Exchange Act of 1934, as amended. (Exhibit 10.24 to  the Company’s Quarterly Report on Form 10-Q for the quarter ended  December 31, 2003). |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| +10.18    |   | Frontier Airlines 2004 Equity Incentive  Plan. (Exhibit B to the Company’s 2004 Annual Meeting of Shareholders;  filed July 26, 2004).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.18 (a) |   | Amendment to Frontier Airlines 2004 Equity  Incentive Plan executed March 30, 2006 and effective April 3, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

 

23

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| +10.19                                             |         | Executive  Bonus Plan for the Company’s fiscal year ending March 31, 2006  (Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the  year ended March 31, 2005).                                                                                                                                                                                                                                                                                    |
|----------------------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| +10.20                                             |         | Long Term  Incentive Plan for the Company’s fiscal year ending March 31, 2006 (Exhibit 10.22  to the Company’s Annual Report on Form 10-K for the year ended  March 31, 2005).                                                                                                                                                                                                                                                                                |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| +10.21                                             |         | Form of  Stock Appreciation Rights Agreement for issuance of stock appreciation rights  pursuant to the Frontier Airlines 2004 Equity Incentive Plan to plan  participants, including named executive officers (Exhibit 10.23 to the  Company’s Annual Report on Form 10-K for the year ended March 31,  2005).                                                                                                                                                    |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| +10.22                                             |         | Form of  Incentive Stock Option Agreement for issuance on incentive stock options  pursuant to the Frontier Airlines 2004 Equity Incentive Plan to plan  participants, including named executive officers (Exhibit 10.24 to the  Company’s Annual Report on Form 10-K for the year ended March 31,  2005).                                                                                                                                                         |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| +10.23                                             |         | Form of  Stock Unit Agreement for issuance of restricted stock units pursuant to the  Frontier Airlines 2004 Equity Incentive Plan to plan participants, including  named executive officers (Exhibit 10.25 to the Company’s Annual Report  on Form 10-K for the year ended March 31, 2005).                                                                                                                                                                       |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| +10.24                                             |         | Form of  Non-Qualified Stock Option Agreement for issuance of non-qualified stock  options pursuant to the Frontier Airlines 2004 Equity Incentive Plan to  qualifying members of the Company’s Board of Directors (Exhibit 10.26 to  the Company’s Annual Report on Form 10-K for the year ended  March 31, 2005).                                                                                                                                           |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| +10.25                                             |         | Summary of  Base Salary Compensation Arrangements with Named Executive Officers  (Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the  year ended March 31, 2005).                                                                                                                                                                                                                                                                                        |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.26                                              |         | Underwriting  Agreement dated December 1, 2005, by and among Frontier  Airlines, Inc., Morgan Stanley & Co. Incorporated, and  Citigroup Global Markets, Inc. (Exhibit 1.1 to a Form 8-K  filed on December 7, 2005).                                                                                                                                                                                                                                |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.27                                              |         | Indenture  dated December 7, 2005, by and between Frontier Airlines, Inc. and  U.S. Bank National Association, as Trustee (Exhibit 4.1 to Amendment  No. 1 to Frontier’s Registration Statement on Form S-3, File  No. 333-128407, filed on November 23, 2005).                                                                                                                                                                                     |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.28                                              |         | First  Supplemental Indenture dated December 7, 2005, by and between Frontier  Airlines, Inc. and U.S. Bank National Association, as Trustee  (Exhibit 4.2 to a Form 8-K filed on December 7, 2005).                                                                                                                                                                                                                                                               |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.29                                              |         | Second  Supplemental Indenture dated April 3, 2006, by and among Frontier  Airlines, Inc., Frontier Airlines Holdings, Inc., and U.S. Bank  National Association, as Trustee. (Exhibit 10.29 to the Company’s Annual  Report on Form 10-K for the year ended March 31, 2006).                                                                                                                                                                            |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.30                                              |         | Purchase Agreement dated September 1,  2006 between Bombardier, Inc. and Frontier Airlines Holdings, Inc.,  relating to the purchase of Bombardier Q400 aircraft. Portions of this  exhibit have been excluded from the publicly available document and an order  granting confidential treatment of the excluded material has been received.  (Exhibit 10.30 to the Company’s Quarterly Report on Form 10-Q for  the quarter ended September 30, 2006). |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.31                                              |         | Airline Service Agreement between Frontier  Airlines Holdings, Inc. and Republic Airlines, Inc. dated  January 11, 2007.(Exhibit 10.31 to the Company’s Annual Report on  Form 10-K for the year ended March 31, 2007).                                                                                                                                                                                                                                  |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 21.1†                                         |         | List of Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ***Exhibit 23 – Consents of  Experts:*** |
| *** ***                                       | *** *** | *** ***                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 23.1†                                         |         | Consent of  KPMG LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Exhibit 31 -  Certifications             |
|                                               |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.1*                                              |         | Section 302  certification of President and Chief Executive Officer, Sean E. Menke.                                                                                                                                                                                                                                                                                                                                                                                               |

 

24

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| 31.2*                                  |   | Section 302  certification of Senior Vice President – Finance and Principal Financial  Officer, Edward M. Christie, III. |
|----------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |   |                                                                                                                                         |
| Exhibit 32 -  Certifications |
|                                   |   |                                                                                                                                         |
| 32.1**                                 |   | Section 906  certifications of President and Chief Executive Officer, Sean E. Menke                                                |
|                                   |   |                                                                                                                                         |
| 32.2**                                 |   | Section 906  certifications of Senior Vice President – Finance and Principal Financial  Officer, Edward M. Christie, III |

 

----

| *      |   | Filed herewith.                                           |
|--------|--------|-----------------------------------------------------------|
| **     |   | Furnished herewith.                                       |
| +      |   | Management contract or compensatory plan or  arrangement. |
| † |   | Previously filed.                                         |

 

25

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**SIGNATURES**

 

Pursuant tothe requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the registrant has duly caused this amendment to its annual reporton Form 10-K to be signed on its behalf by the undersigned, thereunto dulyauthorized, as of July 29, 2008.

 
|   |   | **FRONTIER  AIRLINES HOLDINGS, INC.** |
|--------|--------|---------------------------------------|
|   |   |                                  |
|   |   |                                  |
|   | By:    | /s/ SEAN E. MENKE                     |
|   |   | Name:                                 | Sean E. Menke |
|   |   | Title:                                | *Chief Executive Officer and Director*  (Principal Executive Officer) |

 

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