The information contained in this Item 2 updates, and should be read in conjunction with, the information set forth in Part II, Item 7 of our 2008 Form 10-K.

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") that describe the business and prospects of Frontier Airlines Holdings, Inc. and its subsidiaries and the expectations of our company and management. All statements included in this report that address activities, events or developments that we expect, believe, intend or anticipate will or may occur in the future, are forward-looking statements. When used in this document, the words "estimate," "anticipate," "intend," "project," "believe" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated.

You should understand that many important factors, in addition to those discussed or incorporated by reference in this report, could cause our results to differ materially from those expressed in the forward-looking statements. Potential factors that could affect our results include, in addition to others not described in this report, those described in Item 1A ''Risks Related to Frontier'' and ''Risks Associated with the Airline Industry" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 ("2008 Form 10-K"). In light of these risks and uncertainties, the forward-looking events discussed in this report might not occur. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.

In this report, references to "us," "we," "Frontier Holdings" or the "Company" refer to Frontier Airlines Holdings, Inc. and its subsidiaries on a consolidated basis, unless the context requires otherwise.

On April 10, 2008 (the "Petition Date"), Frontier Airlines Holdings, Inc. ("Frontier Holdings") and its subsidiaries Frontier Airlines, Inc. ("Frontier Airlines") and Lynx Aviation, Inc. ("Lynx Aviation"), filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). The cases are being jointly administered under Case No. 08-11298 (RDD). We cannot provide any assurance as to what values, if any, will be ascribed in our bankruptcy proceedings to our various pre-petition liabilities, common stock and other securities. We believe that our currently outstanding common stock will have no value and will be canceled under any plan of reorganization we might propose and that the value of our various pre-petition liabilities and other securities is highly speculative. Accordingly, caution should be exercised with respect to existing and future investments in any of these liabilities or securities. In addition, trading of our common stock on the NASDAQ Stock Exchange was suspended on April 22, 2008, and our common stock was delisted from the NASDAQ Stock Exchange on May 22, 2008. Additional information about our Chapter 11 filing is available on the internet at www.frontierairlines.com/restructure and Bankruptcy Court filings and claims information are also available at www.frontier-restructuring.com.

Overview

We are a low cost, affordable fare airline operating primarily in a hub and spoke fashion connecting cities coast to coast through our hub at Denver International Airport ("DIA"). We are the second largest jet service carrier at DIA based on departures. We offer our customers a differentiated product, with new Airbus and Bombardier aircraft, comfortable passenger cabins that we configure with one class of seating, ample leg room, affordable pricing, and in-seat LiveTV with 24 channels of live television entertainment and three additional channels of current-run pay-per-view movies on our mainline routes. In January 2007, the U.S. Department of Transportation ("DOT") designated us as a major carrier. As of November 13, 2008, Frontier Airlines and Lynx Aviation operated routes linking our Denver hub to 50 U.S. cities spanning the nation from coast to coast, five cities in Mexico, one city in Canada and one city in Costa Rica.

In December 2007 Lynx Aviation obtained its operating certificate to provide scheduled air transportation service from the Federal Aviation Administration ("FAA"). The aircraft are operated by Lynx Aviation under its operating certificate. Lynx Aviation began revenue service on December 7, 2007 upon receiving FAA certification. Lynx Aviation currently provides service to 12 destinations.

On April 23, 2008, as part of our bankruptcy proceeding, we announced a mutual agreement with Republic Airlines, Inc. ("Republic") to terminate our capacity purchase agreement with Republic as of June 22, 2008. Republic retains its rights to file claims in the bankruptcy proceedings as a result of this terminated agreement. The agreement provided for a structured reduction and gradual phase-out of Republic's 12 aircraft which had been delivered to us. The phase-out was completed on June 22, 2008.

As of November 13, 2008, we operated a mainline fleet of 54 jets (37 of which we lease and 17 of which we own), consisting of 41 Airbus A319s, 11 Airbus A318s and two Airbus A320s, and a regional fleet of 10 Bombardier Q400 turboprop aircraft operated by Lynx Aviation. During the three months ended September 30, 2008 and 2007, year-over-year mainline capacity decreased by 5.7% and increased by 11.9%, respectively, and year-over-year mainline passenger traffic decreased by 4.6% and increased by 22.3%, respectively. During the six months ended September 31, 2008 and 2007, year-over-year mainline capacity decreased by 2.9% and increased by 13.0%, respectively, and year-over-year mainline passenger traffic decreased by 1.0% and increased by 17.8%, respectively.

We currently lease or have preferential use of 17 gates on Concourse A at DIA. We use these 17 gates and seven commuter ground gates and share use of up to five common use gates to operate approximately 256 daily mainline flight departures and arrivals and 65 Lynx Aviation daily flight departures and arrivals.

Chapter 11 Bankruptcy Filings

On April 10, 2008 (the "Petition Date"), Frontier Airlines Holdings, Inc. ("Frontier Holdings") and its subsidiaries Frontier Airlines, Inc. ("Frontier Airlines") and Lynx Aviation, Inc. ("Lynx Aviation"), filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). The cases are being jointly administered under Case No. 08-11298 (RDD). We cannot provide any assurance as to what values, if any, will be ascribed in our bankruptcy proceedings to our various pre-petition liabilities, common stock and other securities. We believe that our currently outstanding common stock will have no value and will be canceled under any plan of reorganization we might propose and that the value of our various pre-petition liabilities and other securities is highly speculative. Trading of our common stock on the NASDAQ Stock Exchange was suspended on April 22, 2008, and our common stock was delisted from the NASDAQ Stock Exchange on May 22, 2008. For additional information on our bankruptcy cases, please see Note 1 of the Notes to Consolidated Financial Statements.

Our ability, both during and after the Chapter 11 case, to continue as a going concern is dependent upon, among other things, our ability (i) to successfully achieve required cost savings to complete our restructuring; (ii) to maintain adequate liquidity; (iii) to generate cash from operations; (iv) to secure exit financing; (v) to negotiate favorable terms with our bankcard processors and credit card companies; (vi) to confirm a plan of reorganization under the Bankruptcy Code; and (vii) to achieve profitability. Uncertainty as to the outcome of these factors raises substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result should we be unable to continue as a going concern. A plan of reorganization could materially change the amounts currently disclosed in the consolidated financial statements.

Industry Overview

The U.S. domestic airline industry was negatively impacted by record high fuel prices during the six months ended September 30, 2008. The price of fuel per gallon for the six months ended September 30, 2008 increased by 67.0% over the same period in 2007 and reached a new record high of $147 a barrel (or $3.82 per gallon including our into plane cost, taxes and storage) on July 11, 2008. Since this record high, crude oil fell to a 12-week low and as of November 10, 2008, our current price of fuel per gallon was $2.24 (including our into plane cost, taxes and storage). Domestic airlines have responded to these record fuel costs by reducing capacity, grounding airplanes, furloughing and/or reducing their workforce, raising ticket prices and imposing additional fees. Based on airlines' schedule filings through July 31, 2008, by November 2008 overall domestic airline capacity will be reduced by 11.4% year over year. We estimate that capacity at DIA will only be down 5.2% year over year by November 2008 largely due to growth of Southwest Airlines at DIA.

In the Denver market, United Airlines has reduced its seat share from 71% to 44% of the Denver market since 2000. During this same period, we have grown our seat share from 8% to 23% of the total Denver market. Southwest Airlines entered the Denver market in 2006 and currently has a 16% seat share in the Denver market. In the markets we serve, we currently have a 31% seat share compared to United's 35% seat share and Southwest's 21% seat share.

In June 2008 United Airlines announced further cuts that will result in the retirement of 100 mainline jets and a one-time reduction of domestic capacity by up to 18%. United's projected capacity reduction from November 2007 to November 2008 is 19.8% at DIA, resulting in a 16% reduction in total Denver seat share and 7.7% reduction of seat share in our markets. During this same period, however, Southwest will increase its total Denver capacity by 114% and its seat share in our markets by 11.5%. Southwest had 92 daily departures at the end of September 2008 from DIA, which is anticipated to increase to 111 by the end of the year. Denver is not experiencing the same capacity decreases in total as other markets due to Southwest's growth in the Denver market.

The majority of Southwest's growth at DIA has come at the expense of United and other carriers. From June 2007 to June 2008, our passenger growth at Denver has outpaced all other airlines, including Southwest. We have averaged approximately 10 points higher in average load factor with a higher average yield compared to Southwest over the last 12 months. Southwest's presence is, however, negatively impacting yields with its lower fare structure. Despite the lower fares, we believe our combination of lower costs than United, comparable costs (excluding fuel) to Southwest, and stronger revenue than Southwest allows us to compete effectively in the Denver market.

Quarter in Review

During the three months ended September 30, 2008, we had a net loss of $30,367,000 or 82˘ per diluted share, as compared to net income of $17,317,000 or 39˘ per diluted share for the three months ended September 30, 2007. Our net loss for the three months ended September 30, 2008 include $16,558,000 of reorganization expenses related to our bankruptcy filing and a $2,624,000 increase in fuel expense from fuel hedge contracts. Included in our net income for the quarter ended September 30, 2007 was a decrease in fuel expense of $6,358,000 from fuel hedge contracts and $2,831,000 of start-up costs for Lynx Aviation.

Mainline passenger revenue decreased by 0.1% in the three months ended September 30, 2008, as compared to the prior period. Our mainline passenger revenue remained relatively flat on a decrease in capacity of 5.7% due to the increase in RASM, or revenue per available seat mile, of 6.1% and a 1.1 point increase in the load factor year-over-year.

Our mainline CASM, or cost per available seat mile, for the three months ended September 30, 2008 and 2007 was 11.27˘ and 9.62˘, respectively, an increase of 17.2%. The increase in mainline CASM was largely due to an increase in fuel expense to 5.58˘ per ASM from 3.32˘ per ASM for the three months ended September 30, 2008 and 2007, respectively, an increase of 68.1%. Mainline CASM excluding fuel was 5.68˘ per ASM as compared to 6.30˘ per ASM for the three months ended September 30, 2008 and 2007, respectively, a decrease of 9.8%. This decrease in mainline CASM excluding fuel is due to several cost savings strategies implemented, including workforce reductions, temporary wage and benefit concessions and network adjustments.

Despite our increase in mainline RASM and decrease in mainline CASM excluding fuel, historically high aircraft fuel prices continue to negatively impact our financial performance. Our losses have been primarily driven by rising fuel costs and our inability to pass these increases on to our customers due to a highly competitive market. Our average fuel cost per gallon, including hedging activities, was $3.90 for the three months ended September 30, 2008 compared to $2.26 for the three months ended September 30, 2007, an increase of 72.6%.

Operations Review for the Quarter

During the three months ended September 30, 2008, Frontier Airlines had the following operating highlights:

ˇ According the Department of Transportation ("DOT") monthly Air Consumer Report, Frontier Airlines finished first in overall flight completion factor, for the 16th consecutive month in September 2008.

ˇ Frontier Airlines ranked among the top three major carriers in on-time performance in July, August and September 2008, including leading the major carriers in September 2008 with a Company record of 91.4%.

ˇ Frontier Airlines continues to be one of the top performing airlines in other DOTs measured performance categories, including top-five in mishandled baggage performance between July and September 2008, and ranking first in fewest complaints filed with the DOT in July 2008, and second in September 2008.

ˇ Frontier Airlines was named 6th in the prestigious Condé Nast Traveler's 2008 Readers' Choice Awards.

ˇ In August 2008, Frontier Airlines was also named the number six domestic carrier in Travel + Leisure's World's Best Awards.

Our Business Plan

As a result of the continuing drastic escalation and volatility in fuel costs and our Chapter 11 bankruptcy proceeding, we are continuing an aggressive examination of many aspects of our business. We are implementing a comprehensive restructuring effort to achieve cost competitiveness by attempting to obtain economic concessions from key stakeholders, such as employees and vendors, in order to allow us to reduce costs, create financial flexibility and restore our long-term viability and profitability.

Our evaluation has encompassed our network, fleet composition, both mainline and regional partner cost structure and balance sheet.

Network Adjustments and Capacity Reductions

In June 2008 we announced plans to reduce mainline capacity year-over-year by approximately 17% from September 2008 through March 2009. These adjustments will include frequency or seasonal reductions in certain markets. The capacity reductions were phased in starting mid-August and we plan to have them completed by the end of January 2009. With the route adjustments, termination of the Republic contract and the planned sale or lease termination of a total of 11 aircraft, we had a system-wide capacity decrease of 8.6% during the three months ending September 30, 2008, over the same period last year and we anticipate system-wide capacity to decline by 20% in the three months ending December 31, 2008, as compared to the same period last year. In September 2008 we implemented reductions in our personnel and operations to achieve the cost savings associated with this reduction in our fleet and routes.

On April 23, 2008, we announced that we reached an agreement with Republic under which Frontier would reject its capacity purchase agreement with Republic. There was a structured reduction and gradual phase-out of Republic's 12 aircraft from our daily operation which was completed in June 2008. In conjunction with the termination of service by Republic, we discontinued service to four markets.

Cost Structure

In May 2008 we reached agreements with our pilot and dispatcher unions on temporary wage and benefit concessions as well as with the International Brotherhood of Teamsters ("IBT"), which represents approximately 450 employees including mechanics and aircraft appearance agents. All other employees were given wage reductions effective June 1, 2008. Wage concessions for non-represented employees were extended at the end of September 2008 and we have reached permanent concessionary wage agreement with the Transport Workers Union of America ("TWU") (representing the dispatchers). The Company has received a ruling from the Bankruptcy Court approving permanent concessions from certain of its contracts with the IBT. One remaining agreement with the IBT remains subject to ongoing negotiations. The Company also reached an agreement with the Frontier Airlines Pilot Association, ("FAPA") for the temporary continuation of wage concessions and is currently working on a permanent agreement.

In June 2008 we announced reductions in our workforce in conjunction with the announcement of the 17% capacity reductions. We have implemented early out programs and voluntary leaves, and eliminated over 600 positions (including layoffs for approximately 275 employees), most of which took effect in September 2008.

Liquidity and Revenue Initiatives

In May 2008 we closed on the sale of two Airbus A319 aircraft for net proceeds of $25.2 million after retirement of the related debt. On August 5, 2008, the Bankruptcy Court authorized a transaction with an affiliate of VTB Leasing for Frontier to sell an additional six of our 47 Airbus A319 aircraft to an affiliate of VTB Leasing for onward lease to Rossiya Airlines. This agreement amends an earlier agreement where an affiliate of VTB Leasing was to purchase two A319 and two A318 aircraft. Under the revised agreement the affiliate of VTB Leasing will not take delivery of the originally agreed upon two A318 aircraft and will instead purchase an additional six A319 aircraft. In September 2008, the Company closed on the sale of two Airbus A319 aircraft; and realized net proceeds of $24.8 million after the retirement of the related aircraft debt. In November 2008 the Company closed on the sale of two additional Airbus A319 aircraft for net proceeds of $18.2 million after the retirement of the related aircraft debt.

On August 5, 2008, the Bankruptcy Court also authorized a transaction between the Company and GE Commercial Aviation Service LLC ("GECAS") whereby the Company would sell and lease back up to four Airbus A319 aircraft. In August 2008, the Company sold and leased back one Airbus A319 aircraft for proceeds of $29.3 million with a net book value of $33.5 million. This resulted in retirement of debt of $23.9 million related to the mortgage on the sold aircraft and a book loss of $4.7 million on the transaction, net of transaction cost, for net proceeds of $4.2 million. We also returned two leased Airbus A319 aircraft to GECAS in September 2008 and will return one Airbus A319 aircraft to GECAS in January 2009.

In total, we expect to realize a total of approximately $95.2 million in net proceeds from these transactions, of which $18.2 million we received in November 2008. We anticipate the remaining $22.8 million in December 2008.

In July 2008 we deferred the delivery of the eight remaining Airbus A320 aircraft that had been scheduled for delivery between February 2009 and November 2010 to between February 2011 and November 2012. These deferrals have reduced our near term funding requirements and debt burden. This resulted in reimbursement to us of $11,485,000 of pre-delivery payments in July 2008.

On August 5, 2008, the Bankruptcy Court approved a secured super-priority debtor-in-possession credit agreement ("DIP Credit Agreement") with Republic Airways Holdings, Inc., Credit Suisse Securities (USA) LLC, AQR Capital LLC and CNP Lenders, LLC, each a member of the Unsecured Creditors Committee in our Chapter 11 bankruptcy cases. The DIP Credit Agreement contains various representations, warranties and covenants by the Company that are customary for transactions of this nature, including reporting requirements and maintenance of financial covenants. The DIP Credit Agreement provides for the payment of interest at an annual rate of 16%, or annual interest of 14% if the Company pays the interest monthly. The DIP Credit Agreement will mature on April 1, 2009. On August 8, 2008, the Company received funding under the DIP Credit Agreement in the amount of $30 million, which is gross of approximately $2.1 million of applicable fees.

In May 2008 we introduced a $25 fee for a second checked bag. In September 2008 we introduced a $15 fee for the first checked bag. The first bag fee started on November 1, 2008, and is effective for tickets purchased on or after September 13, 2008. The fee does not apply to EarlyReturns Summit and Ascent members. We also announced increases in our fees for certain other services such as checked pets and oversized bag fees. The increases mostly range from $10 to $100 per service. We have also announced the elimination of stand-by passengers, changes in add-collect fees and increased change fees. We estimate that new and increased fees announced this quarter will generate $40 to $50 million in incremental annual revenue. Starting on September 15, 2008, customers are charged a $25 non-refundable redemption fee, per ticket, on EarlyReturns award tickets. Award tickets purchased within 14 days of travel are charged a $75 non-refundable expedite fee, per ticket. Both fees are waived for Summit members. Additionally, any award ticket changes or cancellations resulting in a redeposit of miles are subject to a $75 change fee. This change fee is also waived for Summit members.

Results of Operations

Frontier Holdings includes the following operations: our mainline operations, which currently consists of 54 Airbus aircraft and our Lynx Aviation operation, consisting of 10 Q400 aircraft. Historically, our operation included our Regional Partner operations operated by Republic and Horizon ("Regional Partners"). Lynx Aviation and our Regional Partners services are separate and apart from our mainline operations.

To evaluate the separate segments of our operations, management has segregated the revenues and costs of our operations as follows: Passenger revenue for our Regional Partners and for Lynx Aviation represents the revenue collected for flights operated by these carriers. Operating expenses for Regional Partner flights include all direct costs associated with the flights plus payments of performance bonuses if earned under the contract. Certain expenses such as aircraft lease, maintenance and crew costs are included in the operating agreements with our Regional Partners in which we reimburse these expenses plus a margin. Operating expenses for Lynx Aviation include all direct costs associated with the flights and the aircraft including aircraft lease and depreciation, maintenance and crew costs. Operating expenses for both Regional Partners and Lynx Aviation also include other direct costs incurred for which we do not pay a margin. These expenses are primarily composed of fuel, airport facility expenses and passenger related expenses. We also allocate indirect expenses among mainline, our Regional Partners and Lynx Aviation operations by using departures, available seat miles, or passengers as a percentage of system combined departures, available seat miles or passengers.

The following table provides certain of our financial and operating data for the three and six months ended September 30, 2008 and 2007. Mainline and combined data exclude the expenses of Lynx Aviation prior to receiving FAA approval to fly, which occurred in December 2007. The start-up costs excluded were $2,831,000 and $5,059,000 for the three and six months ended September 30, 2007, respectively.

                                                                                     Six Months Ended
                            Three Months Ended September 30,                           September 30,
                               2008                 2007            Change          2008          2007         Change
Selected Operating Data - Mainline:

Passenger revenue
(000s) (1)               $         327,061    $         327,369          (0.1 )% $   640,711   $   631,049           1.5 %
Revenue passengers
carried (000s)                       2,885                2,901          (0.6 )%       5,715         5,623           1.6 %
Revenue passenger
miles (RPMs) (000s)
(2)                              2,612,977            2,738,605          (4.6 )%   5,275,596     5,329,511          (1.0 )%
Available seat miles
(ASMs) (000s) (3)                3,047,145            3,232,320          (5.7 )%   6,231,435     6,418,382          (2.9 )%
Passenger load factor
(4)                                   85.8 %               84.7 %     1.1 pts           84.7 %        83.0 %     1.7 pts
Break-even load factor
(5)                                   92.7 %               78.5 %    14.1 pts           93.9 %        79.3 %    14.5 pts
Block hours (6)                     62,544               66,785          (6.4 )%     128,646       133,003          (3.3 )%
Departures                          26,376               27,143          (2.8 )%      52,786        53,976          (2.2 )%
Average seats per
departure                            132.1                128.7           2.6 %        132.1         128.9           2.5 %
Average stage length                   875                  925          (5.4 )%         894           923          (3.1 )%
Average length of haul                 906                  944          (4.0 )%         923           948          (2.6 )%
Average daily block
hour utilization (7)                  11.6                 12.1          (4.1 )%        11.8          12.3          (4.1 )%
Passenger yield per
RPM (cents) (8)                      12.44                11.87           4.8 %        12.04         11.76           2.4 %
Total yield per RPM
(cents) (9), (10)                    13.01                12.42           4.8 %        12.61         12.31           2.4 %
Passenger yield per
ASM (RASM) (cents)
(11)                                 10.67                10.06           6.1 %        10.19          9.76           4.4 %
. . .