Frontier Airlines files chapter 11

[VortexGen300]

Just heard on CNN at approx 05:00 UTC April 11, 2008 that Frontier Airlines in the USA has filed for Chapter 11?

Hope the guys & girls there get sorted out soon and they will have ops normal - or they will get other work?

This in the light of FAA's grounding of MD80's and crippling AA seems to have a very negative effect on the industry in the USA?

my penny for what it is worth.

VG300

[CaptainProp]

Article on flightglobal....

Another one bites the dust..

[MDDog]

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/04-11-2008/0004790829&EDATE=


when will it end!

[M.Mouse]

When will it end?

I doubt it will. There always appear to be too many seats chasing too many people and airlines cutting each others throats to win market share.

U.S. airlines being able to file for protection from there creditors doesn't help.

[VAFFPAX]

TBH - If United et al hadn't gotten the kind of loan guarantees that they got from the US government after 9/11, they would've all gone to the wall.

I remember Aer Lingus selling everything they could sell (their art collection, equipment, etc etc etc) to stay afloat because of the floor dropping out of one of their biggest profit sectors (DUB/SNN - BOS) after 9/11. They turned themselves around by going low-cost.

EU airlines were limited in getting state support (because of EU rules), which is why some like Sabena had to pack it in. There was the inevitable "blah blah, the US airlines got bailed out by the US government, we weren't, blah blah" palaver, but the crunch this time is not going to bring out those kind of fanboys.

It's not good this time.

S.

[Airbubba]

TBH - If United et al hadn't gotten the kind of loan guarantees that they got from the US government after 9/11, they would've all gone to the wall.

Did UAL get the loan guarantees? It's not over there yet from what I hear as the 911 BK contracts start to expire.

I think Frontier is claiming "business as usual" after the Chapter 11 filing.

[Huck]

The loan guarantees were congressional bull****. Not many carriers got them, and the ones that did had to give an equity stake. Vanguard springs to mind.

My carrier at the time (Gemini) tried like hell but was refused and ended up in bankruptcy.

Don't let the facts get in the way of a good yank-bashing round, though.....

[Golf Charlie Charlie]

Huck is correct about the guarantees, but there was also about $500m in real cash distributed as part of the same post-9/11 programme which was distributed to all or most US airlines - not a lot per individual airline but more than nothing. The guarantee part of the programme (about $4bn) was much larger but was, in the end, used only sparingly. I think, if I recall, a further part of the post-9/11 programme was assistance in the field of insurance.

[ChicoChico]

Frontier Airlines files for bankruptcy protection


Associated Press
April 11, 2008 at 2:32 AM EDT

DENVER — Frontier Airlines Holdings Inc. says it has filed for Chapter 11 bankruptcy protection, but plans to continue normal business operations throughout its reorganization.
The low-fare carrier said Friday the move came after an unexpected attempt by its principal credit card processor to start withholding significant proceeds from the sale of Frontier tickets, which threatened to hurt Frontier's liquidity.
Frontier CEO Sean Menke says the airline, whose major hub is in Denver, has been affected as other airlines have by rising fuel costs and the credit crisis in financial markets.

[HurryUp&Retire]

Do not know how things are around the world, but it is a nightmare in USA right now. Aloha, ATA, Champion (end of may closing their doors), Skyway, BigSky, SkyBus, MaxJet...are all gone within months. Midwest furloughed and so did Sun Country. Not a good time here right now :ugh:

[PaperTiger]

This seems insidious, if true as reported.

Potential creditors now taking pre-emptive steps to safeguard their assets, thereby increasing the chance that said assets become worthless ?
Madness, though sadly not untypical of US Corporate thought and deed. See: price of oil.

[cargosales]

Madness indeed. It seems their credit card company suddenly wanted to withold 50 percent !!! of the credit card funds received from the sale of Frontier tickets.

Full letter from Frontier CEO Sean Menke to Frontier Employees here:

http://www.thedenverchannel.com/money/15853975/detail.html

[VAFFPAX]

Paper Tiger, you seem surprised. The financial industry is hoarding assets to the point where you could see Scrooge McDuck sitting there going "mine, all mine!"

When the Fed in the US has to make available $200 billion in guarantees and the banks STILL don't let go, this move is not surprising at all.

But that said, I agree that it is insidious, it is disingenious, and it only helps force the hands of those who are running on low margins.

B******s!

:=

S.

[Viewedfromabove]

According to various reports, including from Frontier itself, the bankruptcy is entirely for technical reasons due to its main credit-card-transacting bank withholding some of monies owed from ticket sales.

Another example of the banks wrecking the World's (mainly the US's) economy left, right and centre through their stupidity and greed.

[dada]

which uk carrier will be the first casualty this year - place your (dave)betts................

[PaperTiger]

Paper Tiger, you seem surprised.No, not surprised; dismayed perhaps.

[rexman]

I heard today that Frontier might be the next victim to this horrible sickness that's Killing the airlines in the States...

[ORD767]

What sickness? Pricing their product too low to make a buck with oil prices where they are? It's not like they're paying their staff too much.

[Finn47]

At the end of this article, it says that the credit card processing company (First Data) had plans to basically holdback 100 % (!) of the funds! :eek:
Is that possible? In that case, Frontier had no other option but to file for protection.

http://www.denverpost.com/crush/ci_8889838