National757 From United States of America, joined Jul 2007, 720 posts, RR: 1 Posted (6 years 4 months 1 week 3 days 7 hours ago) and read 7956 times:
All kinds of Frontier related articles in the Denver media today. Apparently all employees including senior officers will have their pay reduced "temporarily" in order to look more attractive to potential investors. How do temporary wage reductions attract investors for DIP financing? In my view, wage reductions only serve to reduce costs and make your work force more militant.
Quote: We recently announced pay cut reductions for the entire Frontier Airlines Holdings, Inc. officer group effective May 1. In addition, We are now asking that all employees also take a pay reduction through September 2008. At that time, we will review our financial situation and the market conditions again. We will also be suspending the 401(k) match for this period of time.
Quote: Nonetheless, Frontier employees agreed to $10.2 million in labor savings. During negotiations, Teamster employees agreed to a performance bonus plan for both management and line employees.
"Suddenly, on Tuesday, management sprang on us a new severance plan that would give them pay up to six months," Fazakas said. "We would get nothing.
"We're outraged by this secret plan for a golden parachute," Fazakas said. "They concealed this plan from us throughout bargaining. They want us to have confidence in their plan to emerge from bankruptcy, but obviously they have no confidence in it themselves."
[Edited 2008-05-15 09:31:31]
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, 25406 posts, RR: 49
Reply 2, posted (6 years 4 months 1 week 3 days 6 hours ago) and read 7752 times:
From what I understand Frontier execs in the last couple of weeks have been to New York knocking on doors searching for DIP financing and have repeatedly come up empty handed. I suspect F9's loss rate is high at the moment, with the proposed wage reductions going someway to stem this.
In order to really have someone cough up DIP money, you really need a plan that will at least allow the corporation to tread water, while it develops a longer term viable business plan that provides some assurance of security to the DIP lender.
From the desert to the sea, to all of Southern California
F9Animal From United States of America, joined Dec 2004, 5054 posts, RR: 28
Reply 4, posted (6 years 4 months 1 week 3 days 6 hours ago) and read 7604 times:
Quoting TVNWZ (Reply 3): This is not good. They are obviously trying to preserve cash and if they re getting no takeers for DIPF, the end may be nearer than we think.
Actually, I have long wondered why pay cuts have not happened already. Airlines are infamous for doing this before bankruptcy. F9 has always been in the upper for pay, and I am sure it is just temp. I do feel for the fellow employees, but I am also sure they understand. Frontier has always rewarded employees when the profits are there, and never took away when losses occured. That speaks volumes about the integrity of the company, and its values. This is also clearly a sign that Menke is determined to steer Frontier through these tough times, and bring Frontier out of bankruptcy as a healthy, stronger airline.
Servisair From United States of America, joined Jul 2006, 37 posts, RR: 0
Reply 5, posted (6 years 4 months 1 week 3 days 6 hours ago) and read 7590 times:
This is the beginning of the end for Frontier. I have first hand experience in this as the 10 Airlines I have worked for since 1980 have been through bankruptcy and only 2 are left. (Frontier & United) and something tells me I will be 10 and 0 in the next couple of years!
I loved working for Frontier as they have a great culture and a strong upper Management team. I just don't think they have a chance because of the following:
1. Bankruptcy is horrible for public relations
2. Pay cuts = people will start leaving in droves.
3. Fuel, fuel, fuel, fuel, fuel, fuel and more fuel!!!
4. Although humble and discreet at times southwest is circling for the kill. They have time on there side.
5. UA is doing there part as well.
6. No expansion to speak of. DEN is there only home.
I really do hope they make it but I said the same thing for the other 8 Airlines I worked for and they are long gone!
NZblue From United States of America, joined Jun 2004, 638 posts, RR: 3
Reply 6, posted (6 years 4 months 1 week 3 days 5 hours ago) and read 7458 times:
Quoting National757 (Thread starter): How much confidence do Frontier's senior leaders have in the struggling airline? Not much, according to the Teamsters Union.
Since when has any union expressed confidence or have any other positive things to say in any airline's management/business plan in a downturn/reorginazation, regardless of airline size or circumstance?
Being a Frontier flight attendant, I can say that, for the most part, those I know in my work group have been very supportive of the decisions management has made in order to keep the company viable for everyone. I, for one, am in support of these decisions which need to be made to attract the financing we need to not just get through bankruptcy, but to continue to fly in the future as well. The fact that management has agreed to take a higher pay cut than the rest of the employees (despite the fact that they obviously are paid more) speaks to the seriousness of matter, and their efforts do at the very least show that we are all in this together.
The bottom line is this...I have a job today; I have a job tomorrow. I have a job I absolutely love and work with the finest people I could ever ask to work with. A 10% cut is not a whole lot to be asked of when you factor in that our anniversary raises will continue as scheduled, making our pay cut more of a pay freeze than anything else. There are far deeper sacrifices that could have been asked of us. And if it indeed comes to making those deeper cuts, life is adjusted with those changes, and life goes on.
I've always lived by the rule of living below your means for situations exactly like this one. I have a comfortable lifestyle, my own personal finances are in check, and I am prepared to adjust as need be. Most importantly, I'm just as happy and proud to be working at Frontier today as I was yesterday, as I was when Chapter 11 was filed, and as I was on day one of my employment. This announcement will not affect my job morale or performance, and I will not let anyone else's attitude affect my own, be it at work or even reading the opinion of the doom-sayers on this and other message boards. I understand how tight a rope management is walking to ask for pay reductions while at the same time trying to keep morale and relations above water, especially at a workforce as generally positive and happy as at Frontier. Despite what the unions are whining about, I believe that, thus far, given our situation, management is walking that fine line well.
It's an entirely different kind of flying; all together.
AirplaneBoy From United States of America, joined May 2004, 562 posts, RR: 10
Reply 7, posted (6 years 4 months 1 week 3 days 4 hours ago) and read 7256 times:
EWRCabinCrew- THANK YOU for the kind words. It's great to see support from other airline employees.
NZBlue and F9Animal - Well said! I feel exactly as you both do and am not concerned about this recent decision. All industries are now being affected by the downturn in the economy and I'm happy that we are not laying off employees. This is a decision with long term effects. Granted, there will be those who will complain and be bitter, but I sincerely believe that they are in the minority at Frontier. We have GREAT employees who are very dedicated to the long-term success of the airline. I also think that our CEO's decision to reduce his pay - as well as the pay of the executive management team by 20% prior to deciding to reduce the pay of the masses speaks volumes. There aren't very many airlines that have experienced Ch. 11 who can claim that; rather, the trend has generally seen employees forced to take pay cuts while senior management rewarded themselves with raises and/or bonuses. We have great leadership at F9 and I have faith in knowing that every decision they make is not made in haste. Every decision is solely geared toward a successful emergence from bankruptcy as a healthy, sustainable, and profitable airline. In addition, it's important to understand that for every dollar that the price for a barrel of oil increases, it adds several million dollars to the company's bottom line. I am here for the long haul and am thankful, like NZBlue and many other F9 employees, to still have a job that I enjoy.
Quoting NZblue (Reply 6): Being a Frontier flight attendant, I can say that, for the most part, those I know in my work group have been very supportive of the decisions management has made in order to keep the company viable for everyone. I, for one, am in support of these decisions which need to be made to attract the financing we need to not just get through bankruptcy, but to continue to fly in the future as well. The fact that management has agreed to take a higher pay cut than the rest of the employees (despite the fact that they obviously are paid more) speaks to the seriousness of matter, and their efforts do at the very least show that we are all in this together.
I think I'm going to go with the F9 employee on this one
Quoting Servisair (Reply 5): 4. Although humble and discreet at times southwest is circling for the kill. They have time on there side.
Why is time on WN's side? And how will WN effectively compete to the L4 cities or LGA or DEN?
Alphascan From United States of America, joined Nov 2003, 937 posts, RR: 13
Reply 9, posted (6 years 4 months 1 week 3 days 4 hours ago) and read 7175 times:
AirplaneBoy, NZBlue and F9Animal: Your attitudes and the attitudes of most of your colleagues is why I continue to fly Frontier ! Thanks very much for the great service I can't seem to find on any other carrier.
"To he who only has a hammer in his toolbelt, every problem looks like a nail."
WA707atMSP From United States of America, joined Oct 2006, 2226 posts, RR: 8
Reply 11, posted (6 years 4 months 1 week 3 days 3 hours ago) and read 7007 times:
I was fortunate enough to fly on Frontier's MSP-LAX inaugural flight four years ago, and I loved every minute of it. The crew were one of the friendliest crews I've ever flown with - they did everything they could to make the passengers feel welcome.
I genuinely hope Frontier is able to get the financing they need to exit Chapter XI, so I will be able to fly again with the employees that took such good care of me!
REALDEAL From , joined Dec 1969, posts, RR:
Reply 16, posted (6 years 4 months 1 week 3 days ago) and read 6605 times:
Quoting National757 (Thread starter): All kinds of Frontier related articles in the Denver media today. Apparently all employees including senior officers will have their pay reduced "temporarily" in order to look more attractive to potential investors.
temporarily could mean for next 5 year plus or howver this recession we had to have lasts, or until Frontier & many other carriers go out of business !!!
hey at least you've got a job for the time being - be thankful for that, many millions of others won't !!!
HALFA From United States of America, joined Jan 2004, 1354 posts, RR: 15
Reply 17, posted (6 years 4 months 1 week 3 days ago) and read 6585 times:
AirplaneBoy and NZblue,
Hang in there! Keep doing what you do and do it well. I've been through two bankruptcies with HA in my career and we have survived both with hard work, perseverance, and a positive attitude and I am very confident that you guys will pull through this. You have a GREAT company to work for!
And if you ever work with a flight attendant named Kelly B. from Hawaii, please give her a hug from me, she is my sister!
727forever From United States of America, joined Jan 2006, 793 posts, RR: 5
Reply 18, posted (6 years 4 months 1 week 2 days 23 hours ago) and read 6348 times:
Quoting NZblue (Reply 6): Since when has any union expressed confidence or have any other positive things to say in any airline's management/business plan in a downturn/reorginazation, regardless of airline size or circumstance?
DALPA has been pretty positive of late about the DL/NW merger. I do agree with you most of the time however.
I said it when I was at DH and I'll say it now, it is easier to find a job when you have a job than when you are out on the street in this business. My gut says that the end is unfortunately near for a great little airline in F9 and were I working there I would be seriously looking at my options to prevent or lessen time in the unemployment line. Best of luck to all.
WorldTraveler From , joined Dec 1969, posts, RR:
Reply 20, posted (6 years 4 months 1 week 2 days 23 hours ago) and read 6265 times:
Quoting NZblue (Reply 6): I've always lived by the rule of living below your means for situations exactly like this one.
I commend you from the bottom of my heart for my wise financial management - esp. in the airline industry where changes happen far too often and usually for the negative and where any upward movement can be viewed as grounds for a splurge - only to have it all evaporate in just months.
remember that the reason the economy is in trouble is because many of your neighbors own far more than they can afford and the US at all levels is so far in debt that the only way to help the US economy is to slash interest rates to keep consumer spending going which has the effect of driving up fuel prices among other things.
Quoting Hiflyer (Reply 13): So 30 days in and no DIP financing yet so slash the salaries. I wonder if this is more trying to extend cash as far as they can than it is to interest DIP.
unfortunately, there can be little hope. When several airlines before F9 moved right to liquidation in the BK process, it should be obvious that Wall Street has little appetite to help the airline industry even when supposedly good assets are available to collateralize the loan.
Cash generation will last for another 2 months at most and then ticket sales will drop off dramatically. It is doubtful that F9 will be the only casualty in the industry when fall comes.
Quoting F9Animal (Reply 4): That speaks volumes about the integrity of the company
What also speaks volumes about the integrity of F9 is that management from the top down have always been "equal opportunity participants" when pay is cut... the only difference is that senior officers and management take pay cuts of higher %s than those earning less...which is as it should be.
Quoting NZblue (Reply 6): The fact that management has agreed to take a higher pay cut than the rest of the employees (despite the fact that they obviously are paid more) speaks to the seriousness of matter, and their efforts do at the very least show that we are all in this together.
As I have said in at least a dozen of my replies to various other topics at a.net... In any business, airlines included, attitudes flow from the top down -- never in the opposite direction. At F9, "that's a good thing" ...and not a good thing at the U.S. legacy airlines.
Quoting NZblue (Reply 6): I've always lived by the rule of living below your means for situations exactly like this one. I have a comfortable lifestyle, my own personal finances are in check,
How "un-American" of you! You even seem to take personal responsibility for your life...how doubly un-American ....Guess that makes me doubly un-American as well
Perhaps because WN is known to have considerably deeper pocket$ than F9? While I do not agree with the opinion that WN is "circling for the kill" they are positioning themselves to take advantage of any potential reduction or cessation of service at DEN by F9 or UA or any other airline(s).
Quoting REALDEAL (Reply 16): temporarily could mean for next 5 year plus or howver this recession we had to have lasts, or until Frontier & many other carriers go out of business !!!
Generally sepaking, at least in the U.S. legacy airline industry, "temporary" pay cuts are anything but temporary. Management gets comfortable with their new high-cost, low-wage cost structure and does nothing to return to profitability to the point that they can "afford" to restore payscales of their employees to pre-cut levels...even while upper management lines their pocket$. Based on my observation, to F9's credit, they seem to be "a different animal" (pun neither intended nor unintended) in this regard.
Flightopsguy From United States of America, joined Jan 2005, 348 posts, RR: 0
Reply 22, posted (6 years 4 months 1 week 2 days 22 hours ago) and read 6087 times:
The central issue here is the inability for the carrier to obtain DIP financing, which is required to keep operating. At some point, the overnight cash flow will not permit operating the next day. Possibility the increased pax volume over the summer season will help, but DIP in one form or another must be obtained. Unfortunately the woes of the industry re: fuel are occurring at the same time as the credit crunch. Without some sort of dramatic change, every carrier is in danger of being insolvent within 6-24 months. As one oil trader said on CNBC, "The irrationality of the oil market can last well beyond my personal solvency or your corporate solvency".
ABQopsHP From United States of America, joined May 2006, 851 posts, RR: 3
Reply 24, posted (6 years 4 months 1 week 2 days 21 hours ago) and read 5736 times:
I would have to say the stigma of BK is not like it was in the 80s with the old CO or in 92 with HP. These days all the airlines are facing difficult times. Were about to find out on monday whats going to happen here at XE. You guys at F9 need to hang in there, keep up the good work, yeah the paycuts will...shall I say...."draw air"....I took 50% at the old CO and 10% with HP. You never really catch back up, but if you love the job, which many of us do, you make adjustments.
My prayers are there for all of the F9 team and others that are lucky and crazy enough to work in this business.
A line is evidence that other people exist.
: My prayers are with all of you frontline F9 employees. Thank you for all your hard work, and I hope y'all make it out of this mess.
: Unsurprised perhaps. The credit environment is still pretty awful after all, despite recent improvements. But 30 days into a bankruptcy without poten
: very well said...I have worked for two airlines....both are gone. the last one did a pay cut and that was near the end.
: Best to F9. I love this airline dearly. My first flight ever was an F9 from DFW to DEN, and since then my passion for aviation has taken off (sorry).
: There doesn't seem a lot of point in discussing it, since you have made your attitude to Frontier's survival very clear. But, just for starters, I wo
: CSA for example is what I meant, and ramp too. They beat UA, DL, NW, US, and even AS in starting pay, and the top out is in range with the ones I lis
: With all due respect, my predictions about F9 have mostly come to pass. I said bankruptcy seemed inevitable. I also said F9 would regret retrenching
: This entire root on F9's death act is getting pretty old. I've worked for a company that went bankrupt, and the wage restrictions were much more sign
: Ah, chest-thumping. Okay: I believe I said that Frontier probably could not avoid it. I know of no one at Frontier who regrets that decision. Certain
: Good luck to all of the F9 employees. My one experience flying your airline was great. Alas, you started flying to ICT months after I stopped flying t
: Mariner said he thought they were not surprised about the difficulty getting DIP money.... I think they were surprised ....twice...first by the credit
: Atleast there upper management thinks they will still be around in September. I really dont think they will...Im hoping they mmake it till 2009. I rea
: Certainly they were surprised by the CCP action. As was most of Denver and quite a lot of Wall Street. I very much doubt they were surprised by the s
: Not chest thumping, hence my "with all due respect" comment, because I do respect your opinion. I get the impression you don't respect mine, which is
: I've been through a mandatory 10% paycut and furloughs in the tech industry as an engineer. I sympathize. Stay positive. If things turn out well, mana
: I have no argument with that statement. However, DIP financing now seems to play some part in your scenario: I note that Northwest did no have DIP fi
: I might agree with your statement in a different financial environment. However, with the credit markets rapidly improving, it seems like F9 would be
: I agree. I have no doubt that Frontier has received some DIP offers, but I like to think that Frontier can hopefully be choosers and wait for what's
: NW sold or encumbered their assets prior to bankruptcy, which provided sufficient cash to restructure and support operations for several years. In ad
: i very much hope my bias always shows. mariner
: Regarding #1: With all due respect, I nearly laughed at loud when I read this, it is such utter rubbish. Being here in DEN, I can say that many peopl
: Funnily, I always liked F9, but have never flown with them. There is just something about them that makes me believe they are "a good airline"... Havi
: Thank you. Not knowing the actual figures, I had wrongly thought differently. As for unencumbered assets, not even their DC-9s? ...OK, let's not go t
: I hope not. I am flying ABQ-DEN-ABQ on F9 next month.
: Here is a memo to employees that came out. It's hard to believe it has only been about a month since we announced our Chapter 11 reorganization. It se
: They were surprised by when the CCP decided to do it, since it was a reflection of the overall panic that roiled the markets a few weeks ago. However
: No problem bud. The starting for a CSA was about 10.16 an hour a few years back. It went up, so I think it was close to 11.00. It also was based on r
: My statements were meant to be generic in nature but I stand by every one of them. While I believe that F9's letters to the employees are sincere, it'
: It's sorta been a trigger in the airline industry to watch the CFO's...Tate at F9 resigned in Feb to be eff Friday March 21....the company filed Chapt