F9Mechanic From United States of America, joined Nov 2005, 62 posts, RR: 0 Posted (6 years 11 months 3 weeks 7 hours ago) and read 27056 times:
We here in the line mx department just learned that we have filed chapter 11. We were told that it was to protect assets, and one of our creditors called for us to pay our line of credit. We were also told that we will make it in the long run, but we are worried.
National757 From United States of America, joined Jul 2007, 721 posts, RR: 1
Reply 7, posted (6 years 11 months 3 weeks 6 hours ago) and read 26547 times:
The key to successfully emerging from this BK filing is "damage control" IMO. Now potential travelers looking to book travel in the next 3-6 months might not book F9 because they will automatically associate this event with the closing of SX, TZ, and AQ.
This BK filing has the potential to snowball in that customers and vendors may lose confidence in the company. For the employees sake, I hope F9 pulls through.
[Edited 2008-04-10 23:39:21]
Formula 1 Grand Prix Trips: YUL '08, MEL '09, BCN '10, SIN '11, and LGW '12
LAXintl From United States of America, joined May 2000, 26662 posts, RR: 50
Reply 12, posted (6 years 11 months 3 weeks 6 hours ago) and read 26472 times:
Have fun battling the CC companies on the hold back.
I know recently hold backs for many carriers have edged up with some not receiving various percentage of charged revenues until up to 3 days after a passenger completes their trip. The recent spate of failures and losses being absorbed by the CC obviously have them spooked leading to tightening things up even further on those carriers which seem more vulnerable in their eyes.
From the desert to the sea, to all of Southern California
United1 From United States of America, joined Oct 2003, 6247 posts, RR: 9
Reply 13, posted (6 years 11 months 3 weeks 6 hours ago) and read 26438 times:
SO reading the press release it sounds like F9 is encountering a cash flow problem due to its Credit Card Processor wanting to hold back a higher percentage of pending transactions instead of depositing them into F9s account. If Frontier can get a judge to impose the original terms on the CC Company them they should be able to emerge relatively quickly. It doesn't even look like they have DIP financing which can be a good sign or a bad one.
Guess we will see what happens in the next few weeks.
Baw716 From United States of America, joined Nov 2003, 2030 posts, RR: 26
Reply 14, posted (6 years 11 months 3 weeks 6 hours ago) and read 26422 times:
Quoting Mariner (Reply 5): In these difficult times, it was the most sensible thing for Frontier to do.
Agreed. Let's hope that they have the elements they need to survive the bankruptcy process. The biggest hurdle seems to be that this time, the banks are less willing to lend DIP financing, owing to their own problems.
Unfortunately, Frontier will not be the last one to file for Chapter 11...
Let's hope, however, for the employees of Frontier and the city of Denver, that Frontier survives. That is my sincere wish.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
Miami1 From Australia, joined Feb 2001, 706 posts, RR: 0
Reply 18, posted (6 years 11 months 3 weeks 6 hours ago) and read 26372 times:
This is really bad news ! im really angry with the press who print doom and gloom before anybody has any idea or contemplation of things evan happening its almost like bad situations just get thought up and it creates an air of fear so companies that get bad press like Frontier do end up filing for chapter 11, grrrrrrr !!.
F9Animal From United States of America, joined Dec 2004, 5230 posts, RR: 17
Reply 19, posted (6 years 11 months 3 weeks 6 hours ago) and read 26352 times:
I about fell out of my chair when I read this.
Quoting Mariner (Reply 5): From my perspective, it became inevitable, probably about Monday. As I said in the other thread:
I am with you on that. This is now a good chance to emerge better. If anything, this could be a blessing in disguise.
To all of my buddies at Frontier.... Keep your heads up high, and do not stop what you do best. Take good care of your customers, and keep being a "Whole Different Animal". Frontier will come out of this, and you all that work for Frontier are the ticket to success.
I'm no financial expert like Mariner... but I'd imagine they did it late at night because the increased credit card processor "holdbacks" were due to start tomorrow, 4/11. So by doing it tonight it essentially freezes the contract that's in place with the processor now....
Best of luck to everyone at Frontier. I flew them last year for the first time and it was a great experience....
HALFA From United States of America, joined Jan 2004, 1381 posts, RR: 15
Reply 22, posted (6 years 11 months 3 weeks 6 hours ago) and read 26244 times:
Quoting F9Animal (Reply 19): To all of my buddies at Frontier.... Keep your heads up high, and do not stop what you do best. Take good care of your customers, and keep being a "Whole Different Animal". Frontier will come out of this, and you all that work for Frontier are the ticket to success.
Very well said!
To my sister Kelly ( A very proud F9 Flight Attendant), and her colleagues, hang in there! I have all the confidence that you will get through this and emerge stronger and better than ever.
Ikramerica From United States of America, joined May 2005, 21672 posts, RR: 59
Reply 23, posted (6 years 11 months 3 weeks 6 hours ago) and read 26214 times:
Quoting United1 (Reply 13): If Frontier can get a judge to impose the original terms on the CC Company them they should be able to emerge relatively quickly. It doesn't even look like they have DIP financing which can be a good sign or a bad one.
From how I understand it, they had to enter CH11 ASAP so that the CC Company could not change the terms of their deal.
After reading up on "hold backs" and how they work, the CC Processor is within their right to change the terms if they see a fundamental change in the business they are working with. It's within the contract F9 has with them. They must be worried about F9's losses and that the mantra for ATA and AQ passengers has been "contact your credit card company" which is plastered all over the web as advice. I'm sure the credit card companies are pissed they are being put in the middle, and the processors even more so (charge backs are expensive), and so are now increasing hold back on all "shaky" carriers to protect themselves. And from how I understand it, the processor could basically hold all F9s credit card transactions for a long period of time as security.
But by filing CH11, that freezes all contracts and terms as is for a set amount of time (60 days?). At least that's how I understand it. Then the BK judge can sort through it. But it means everything holds as is, the CC processor can't increase the hold back, and F9 stays liquid. Probably.
Of all the things to worry about... the Wookie has no pants.
BAW716 From United States of America, joined Nov 2003, 2030 posts, RR: 26
Reply 24, posted (6 years 11 months 3 weeks 6 hours ago) and read 26190 times:
Quoting Miami1 (Reply 18): This is really bad news ! im really angry with the press who print doom and gloom before anybody has any idea or contemplation of things evan happening its almost like bad situations just get thought up and it creates an air of fear so companies that get bad press like Frontier do end up filing for chapter 11, grrrrrrr !!.
I'm not completely certain that the press (A) and their tendency to stir the s--t, cause the banks (B) to call in their loans which forces Frontier and carriers like it (C) to file for Chapter 11. A causes B causes C...
The air of fear already existed before Aloha filed for Chapter 11. Unfortunately, there were a number of other airlines in a similar situation, given the precipitous increase in the cost of jet fuel and an economic downturn, that ended up being cash short. I think the dominos just started falling. Any airline that is cash short or in a poor liquidity situation will end up in bankruptcy court before the end of the year. The economy is not going to improve before 2009 and the continued increases in the price of jet fuel that will occur (I don't see it improving before 2009 either) will force even a couple of the majors back into bankruptcy protection.
We just have to sit back and strap ourselves in...it's going to be a very bumpy ride for everyone for the balance of 2008.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
: This has been in the works. Yeah, I agree the timing is odd, but it will be business as usual. Bankruptcy is scary, and I have faced it with a few ai
: I wonder at what point this rampant fear that has spread across the airline industry will ever be contained. If F9 feels like they need to seek protec
: Sometimes conditions change so fast that if you don't act, you will be permanently damaged. This seems to be the case here. They had to "outsmart" th
: Whole different animal there. UA, in spite of it's completely inept senior management, is doing OK. Thank god we have an oil man in office or this wh
: Well, count me as one who did not see this coming at this point in time. I do understand why they went ahead and did it -- losing timely access to cas
: But they might drop soon. They need the public to buy the we are bankrupt, but nothing to worry about line - when 3 airlines shut down overnight and
: But that shows why UA and other legacies are in a better position than the LCCs. UA has the flexibility to pull down unprofitable domestic flying whi
: I don't know about that. If the Court is interested in maximising the value of the Company for ALL creditors that it can hardly favour the CC Company
: HOLY Sh** It will be interesting to see who buys them.
: United doesn't think so, at least at DEN. As reported in the Rocky Mountain News (the link is in the other thread), after Southwest had been at DEN a
: Keep your heads up over there F9 folks...you have a damn fine product, a fairly decent management team, and I think you guys will be alright if you ju
: If anyone does, they will have to pay nearly four times what they would have paid yesterday. mariner[Edited 2008-04-11 00:51:20]
: I would like to take a moment to reflect on Frontier and what it is. Frontier is very special in so many ways. I can't explain it. The working there i
: Exactly. That's because domestic flying, in general, has become much less profitable. United has moved its resources away from domestic flying to a c
: The timing does seem odd. Braniff International filed in the middle of the night, too.
: My best wishes to Frontier and its stuff! We need the whole different animal!
: And they are still not anticipated to make money this year. According to a consensus of analysts, it does translate to an overall loss for this year,
: Best of luck to all my friends at F9 in DEN and at other cities around the country during these uncertain times.
: Mesa may drop, ExpressJet may drop, etc. If anything, the question of "who's next?" and calling for payment illustrates how little trust is being pla
: I am shocked by this news, whilst a loyal UA flyer, I hope Frontier pull a around.
: A very sensible, strategic and expedient move by F9. The aviation world suddenly seems very sub-prime. Looking from the other side of the atlantic, th
: That's true Mariner but what I think Mattnrsa is trying to say is that if UA at DEN has a bad year and looses money ORD could still have a great year
: All the best to you and your fellow employees !! I always wanted to fly F9 since I always thought this is airline as well as B6 are different from th
: I wish the best for Frontier and their employees. I will continue to be a loyal customer and I hope they pull out of this....
: Best of luck to their employees. I've always liked F and I am sure and hope that they pull through.
: Hopefully this won't destroy F9, but who knows in the long run. Clearly the credit card companies, who have lost many millions many times before by ai
: Random thoughts here in no particular order. 1. The Stock Market - Wall St. - is not the end all that it is made out to be. Yes you may get cheap capi
: I wish my Brothers & sisters at F9 all the best, and to the market expansion team, "hang in there". I
: Sorry to hear this, I hope this works out for F9 Employees.... I have a question, in the CNN article http://www.cnn.com/2008/TRAVEL/04/11/us.frontier.
: As a F9 employee, thanks for all the kind words. This is my first job witin the industry so the experiences, both bad and good, have all been new to m
: While I am sure that the action planned by a credit card processor would hurt F9's bottom line I am surprised this carrier was on such a knife edge al
: I understand exactly that, but a loss is a loss. Since there is to be an overall loss, ORD may not be off-setting DEN. There may be losses at each. B
: On this mornings "Today" show NBC's Lester Dolt gave quick mention to the situation and said a re-organization is underway. Inasmuch as he made no att
: Both DL & NW have been out of bankruptcy protection for some time now.
: The credit card holdbacks have an immediate and severe effect on cash, and adequate cash is absolutely essential to keeping day-to-day operations goi
: From the Bloomberg article, Sean Menke said the following: "''Fortunately, we believe that we currently have adequate cash on hand to meet our operati
: Not having DIP is not a good sign. There is no assurance they will be able to obtain either given the tight credit market and weak airline industry.
: No one is suggesting that you can. However, given the sudden and unexpected change of rules - change of the contract - by the CCP, which would have s
: It may actually be easier in the middle of the night...during the filing process many things can happen if there is someone lurking in the shadows wi
: Awe crap. I love this airline. This is going to be a blow to Denver if they can't make it after this. I'm curious as to what the Southwest employees t
: DL had to put up about $1B more cash - that's where the GE money came from. As I said, you can delay some elements of the contract but you cannot for
: Like I said on the previous thread, it pays to do this early rather than late if they want to reorganize. They will have little luck in getting anyone
: All I can say is... wow... I just about fell out of my chair seeing the blurb on The Washington Post's web page first thing this morning, lumped in w
: Though no one knows how this will turn out in the long run - the chances of Frontier shutting down have decreased with this filing. It's no longer a d
: Which wouldn't be a good way to do, since Frintier management has the reputation to be one of the better ones.
: I hate to see dates for shutdown already being proposed before all the employees have had a chance to read and understand the situation.... However it
: Once again, I had a really nice experience with them last Tuesday flying DEN-STL. In my previous F9 flights the experience was the same. On the other
: I have been a Frontier Airlines enthusiast ever since working at Air New Zealand at LAX, watching from my desk window which faced the North Complex al
: To all the employees of F9, keep your heads up!! When I went through a BK at AWA back a long time ago, the first one, I learned one huge thing from it
: Talking to WN about what? Assuming the leases on the gates at DIA? Unfortunately F9 does not have a tremendous amount of assets. This is the problem
: Like I said, it will be a one way conversation. No, those will go to B6. You seem to be gloating that the LCC's are taking a fall before the Legacy's
: Absolutely. Chapter 11 rules have changed significantly since the UA filing. Time to re-organize or re-finance is no longer infinite.
: The Press? I think the Press are feeding of the knee-jerk hysterics that is the Stock Market these days, which revolves around the circling vultures
: Why should congress? The credit card companies are businesses too, and have responsibilites to their shareholders. It is well within their rights to
: I can see this. Makes sense to me. Yesterday morning I just bought F9 tickets for this summer...I'm not worried.
: Huh? B6 is selling aircraft....what makes you think that they would want an new fleet type (319) with different motors (cfm vs pratt)? Based on what.
: I'm right there with ya! Even though I fly the cute baby animals, I feel the same way. I'm just not looking forward to the crew room tomorrow, at lea
: B6 is not interested in F9, but I think they would be interested in those gates if they go 7. DIA would be a nice fit for a midpoint hub. Speculation
: Well said. I wish F9 and all their employees well. I think the animals will keep flying for a long time. That is the scary part. Its no longer possib
: After a temporary reprieve, F9 will either have to convince its CCP to reduce hold backs, which are most certainly within the CCP's existing contractu
: They filed in the middle of the night probably because they wanted to catch the creditor off-guard. I suspect no one, the creditor included, thought
: I extend all sympathy to Frontier employees. As far as I can tell, this may be the biggest operator with truly a family feeling among the employees. A
: sorry to say but frontier is number 3 behind ua and wn in den . i think they are deadmeat. lets pray for a miracle. this is how it's starts boys and g
: If this were to happen two years, even a year ago I wouldn't give it a second thought but I am hearing that finding the financing they will need to ge
: I like to look at financials and on Yahoo Finance at the bottom they(yahoo) list Bullish and Bearish for the day. One of todays Bullish is Frontier Ho
: I hope they can regroup and remain in the air. Eventhough I didn't see it coming, It should come as no surprise considering they're slow growth and m
: Didn't see it coming? This is just another domino to fall and we're far from the end of this cycle.
: I have always hoped F9 would keep themselves out of this sort of trouble, and will wish them only the best. That said, this comes as no real surprise
: I certainly wouldn't say that the airline industry is in a "lull." If this is a lull, I wouldn't want to see a downturn.
: I just bought tickets for my family to fly DEN-PDX next month. I hope I'm not screwed.
: If you used a credit card, you should be ok IF they shut down. If they fly, you're even better. safe.
: They probably files as soon as the lawyers finished preparing the documents. If the docs had been completed at 5 PM then the filing would have been a
: What sad news! I just flew F9 last March and had great flights with them, I hope they can come out of this okay.
: Frontier was notified that the credit card processor would increase the holdback effective Friday, April 11 - so they had to get their bankruptcy fil
: In terms of what? Narrowbody flights tom/from DEN that are not on a 737? F9 is number 2 in terms of movements and pax, bud. How what starts? How reor
: Even something like that would not cause a company to file by itself. The key is to try and find someone to finance their BK, good luck with that now
: What are you talking about? Have you considered the CC companies have shareholders and business to run also? They are not 'making things hard' for ai
: I have yet to fly F9, but I would like to get the chance! From what I've heard from my parents, they really enjoy them going out of OMA!
: This is one of the most astute observations in this thread. We can argue about what bankruptcy SHOULD be, but there's no question that bankruptcy IS
: Here are some facts of the events that caused F9 to seek the Ch11 filing. In the mean time the airline is exploring ways to raise capital (no easy tas
: True enough, most of the time this comes out as negotiation, but the court also has lee-way to impose temporary contracts where needed. No, but their
: CCP's are more concerned about having less protection from customers that are more likely to go out of business, thus stranding them with hundreds of
: My thoughts are this. I said they were better off filing now than later a few days ago and that is still true. I think that the main problem they hav
: NW did not have DIP financing. No one said there wasn't going to be a loss at ORD I think what your missing is that we are speaking about how the air
: NW had a DIP financing commitment from Citigroup.[Edited 2008-04-11 09:28:53]
: Hopefully you guys will pull through. Other airlines have and F9 shouldn't be any different.
: http://www.washingtonpost.com/wp-dyn.../2005/09/14/AR2005091400848_3.html They may have had an agreement with citigroup for a loan if they ever neede
: Oh the infamous mid-continent hub for B6. Let's see they could not make LGB work as that has been reduced dramatically. B6 is selling airplanes and v
: I believe they had the commitment before entering, or at least shortly thereafter. They did not use it, since NW never really had a cash flow or liqu
: B6 reductions at LGB? Every slot they have is utilized, and has been so for a few years.
: Once a company files for bankruptcy, the price of the stock becomes largely irrelevant for someone who wants to acquire the company. This is because
: Mariner. I believe you flamed me for forecasting this last week. I do hope F9 will pull through this and become stabile once again. It will be a sad d
: B6 and F9 would be a good fit not because it would allow expansion but, rather, because it will allow consolidation. In tough economic times, consoli
: I wish all the best to the employees of F9. It's a ROUGH process, although I REALLY hope you don't end up like I did at DH! I think your product is mu
: I have seen this mentioned in a few threads, and I have seen Mariners figures debunking this, Frontier's loads have actually gone up since WN entered
: Sad news - I love Frontier and I know they will make it out of Chapter 11. Good luck guys
: But did they have to lower prices to get there, thus hurting their bottom line? Load factors aren't everything. They are only part of the revenue equ
: Loads tend to go up with competition since fares are forced down. How has Frontier's RASM changed since Southwest entered? That is the more relevant
: Watching the late local news on channel 6 here in PDX last night, they did a short spot on Frontier entering Chapter 11. Accompanying this was footage
: Certainly, I disagreed with you. I'm sorry if you think I "flamed" you but without the CCP action, I don't believe this would have happened. It took
: F9 is a fine airline, but it strikes me as one of the "problems" with the industry as it is constituted right now. there is over-capacity of seats nat
: It doesnt really ssuprise me but i am sure they will come out soon
: Why would B6 want to go into a post-Frontier DEN, up against both a legacy hub and Southwest, but without the "hometown airline" support Frontier has
: No worries. I personally did not think it would be this quick myself. I did validate alot of your points and you deffinately know your stuff.
: I thought B6 was looking to possibly be in a crunch itself this year. Maybe there's a marriage between the two down the road? Just a random thought t
: Perverse as ever, it is actually a considerable relief to me. It gives Sean Menke the one thing he needed that Wall Street - or the climate - didn't
: Any thoughts about their agreement with Republic. Is F9 happy with them. And on a side note, has their load factors doing?
: I'm talking about a CCP basically pushing an airline into Ch 11 because of an act on their part that might be considered excessive. In the future I w
: Denver Business Journal: First Data offers regrets about Frontier Airlines Excerpt: "We regret that the current economic conditions have led to today'
: Can you please tell me where you got this information that WN was ever looking at F9 and buying them out? Sure is news to me. Wouldn't make any sense
: So BK is not OK for the legacies but it is fair for the LCC's to do so? Not sure I follow the logic. AAs for your list of airlines. WN is where they
: There is considerable backlash to this occurring in Colorado, which is not irrelevant - given that both First Data and F9 are Colorado companies. The
: The odds of this happening are about as good as UA innagurating service to the moon LGB has the same ammount of flights they are permitted by slots.
: Where is this coming from? The linked article from the Denver Business Journal said they were cutting 100% of the advance ticket sales (45% to 100% w
: Maybe, just maybe, this action will lead to CCP reforms. Reading more about it since last night, they seem to practice nearly unregulated, usury type
: Not really. They are in not nearly as precarious a position as the airlines that have ceased operations. United, in particularly, did spend a very lo
: Do you honestly think banks and CCPs don't consider the impact of their decisions? Well, okay...maybe some don't, but the majority do. And if you thi
: Previous cancellation/refund rates have nothing to do with the hold back in this case. Frontier simply was deemed a significant risk by First Data ba
: Where did I say or imply that? I was just commenting that the reason the Legacies are still around is because they took advantage of BK to insulate t
: WN didn't buy TranStar, they bought Muse Air and renamed it TranStar. Also, they lost lots of money on the whole deal, so I don't see them doing such
: Its crappy airlines like U*A*w*ys that need to go not good ones or atleast half decent
: I think we all now realize that Southwest is quite the exception when it comes to a majority of American LCCs. WN is such a large airline at this sta
: Southwest is the exception when it comes to the majority of American carriers, period. WN still has plenty of expanding to do if they want. So does A
: Yes but even that is starting to change, the fuel bill is killing everyone. any while I am not at all saying the sky is falling it is not business as
: Ignore the fleet concerns because really they DON'T exist. Look instead at the route maps. WN... wins big if they can "get rid of" F9, and the best w
: HUH!?? thats how WN has thrived...fleet commonality!!!! and they are still resistant to budge off that stance!
: If Southwest were going to buy Frontier, they should have done it before yesterday. Chapter 11 protects Frontier form anything that could be consider
: WN carries over 100 million passengers a year. If they can even adjust their average fare by $1, they are way in the black. It isn't fun, but it can
: Do UA A319s and Frontier A319s have the same engines??? UA is dumping its 737-500s by the end of the summer. If UA can get rid of Frontier, then they