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Frontier Airlines receives alternative commitment for debtor in possession financing

DENVER, CO (August 4, 2008) – Frontier Airlines Holdings, Inc. today announced it is moving forward with an alternate transaction for post-petition debtor-in-possession (DIP) financing.

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DENVER, CO (August 4, 2008) – Frontier Airlines Holdings, Inc. today announced it is moving forward with an alternate transaction for post-petition debtor-in-possession (DIP) financing. Republic Airways Holdings, Inc., Credit Suisse Securities (through its affiliates), and AQR Capital (the “Lenders”), each a member of the Unsecured Creditors Committee in Frontier’s Chapter 11 Bankruptcy cases, are offering Frontier up to $75 million in DIP financing, with an immediate firm commitment and funding of $30 million. This new DIP facility provides Frontier with lower financing costs, less restrictive covenants and greater flexibility to pursue strategic opportunities without being constrained by more restrictive DIP provisions. The alternate DIP facility is subject to bankruptcy court approval and to various conditions.

The Lenders provided the company with this improved DIP facility following Frontier’s successful efforts to significantly improve its liquidity. Over the past two weeks, Frontier announced the Perseus $75 million DIP financing, up to $80 million in additional liquidity through aircraft sales to VTB Leasing for onward lease to Rossiya Airlines and other aircraft sale leaseback transactions.

“The agreement by members of our Unsecured Creditors Committee to extend this financing commitment is a tremendous vote of confidence in our company and its business plan,” said Sean Menke, Frontier president and chief executive officer. “After a careful examination of this offer against the offer Perseus provided last week, we believe this new agreement offers immediate access to greater liquidity under more favorable terms.”

Upon court approval, the Lenders will provide immediate funding of $30 million to support Frontier’s working capital needs. The Lenders will consider funding an additional $45 million subject to the terms and conditions of the DIP Credit Agreement.

The proposed DIP funding, coupled with Frontier’s recent announcements of aircraft sales and sale leasebacks, is expected to substantially increase Frontier’s cash position and provide sufficient working capital for the company’s operations, as well as significant staying power in the market. These announced liquidity initiatives allow the company to continue to execute upon its business improvements, focusing on fleet deployment, cost savings and revenue enhancements. Frontier will continue to evaluate strategic opportunities in light of this new DIP facility and the anticipated significant improvement to Frontier’s balance sheet.

Frontier and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code on April 10, 2008. Frontier’s principal bankruptcy counsel is Davis Polk & Wardwell.

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