NZblue From United States of America, joined Jun 2004, 635 posts, RR: 3 Posted (5 years 4 months 1 week 2 days 14 hours ago) and read 5107 times:
Just released news from frontierairlines.com:
Frontier Airlines Secures Commitments for Additional Liquidity Aircraft deals generate approximately $80 million in incremental liquidity
Frontier Airlines today announced that it has entered into a Letter of Intent with VTB Leasing to sell six Airbus A319 aircraft to VTB Leasing for onward lease to Rossiya Airlines. This agreement amends an earlier agreement where VTB Leasing was to purchase two A319 and two A318 aircraft. Under the revised agreement, VTB Leasing will not take delivery of the originally agreed upon two A318 aircraft to be delivered in August and will instead purchase an additional six A319 aircraft in August.
It's an entirely different kind of flying; all together.
ScottB From United States of America, joined Jul 2000, 6439 posts, RR: 33 Reply 7, posted (5 years 4 months 1 week 2 days 13 hours ago) and read 4989 times:
Quoting TheGreatChecko (Reply 5): So that makes a total of 8 aircraft leaving the fleet. I guess they can make more money selling the A319's and keeping the "short buses."
So, in my opinion, it's a mix of good news and bad news. The good (great) news is that $80 million in liquidity generated from selling the A319's is a big shot in the arm, especially with the somewhat worrisome cash number in the monthly operating report for June released earlier today. The bad news is that (again in my opinion) A318's are going to extremely difficult to sell given that there are only about half a dozen airline customers and given unfavorable operating economics compared to the larger family members. And this leaves Frontier with 2 A320's, 5 A319's and 9 A318's in the proverbial piggy bank. They could probably generate another $100 million in liquidity from the A319's & A320's if necessary.
I also think this helps to explain the short-term extension of the aircraft leases that we saw last month; they have used the time to be able to negotiate good terms for selling owned frames while maintaining flexibility for future capacity and avoiding a fire sale (i.e. if they couldn't get good sales terms they could simply drop leases come September).
AA737-823 From United States of America, joined Mar 2000, 5540 posts, RR: 11 Reply 10, posted (5 years 4 months 1 week 2 days 13 hours ago) and read 4906 times:
Wait a minute, they just sold six nearly-new Airbus narrowbodies for a price of..... $80 million?
Unless my calculator is hypoglycemic, that's only $13.3 million a piece... for an aircraft that they presumably paid $60 million each for?
Either A319 resale values are worse than my Ford, or they got a great deal on them in the first place, OR (I'm betting and hoping on this one) the $80 isn't the grand total, but a one-time payment of some sort.
Enilria From Canada, joined Feb 2008, 6552 posts, RR: 13 Reply 16, posted (5 years 4 months 1 week 2 days 13 hours ago) and read 4780 times:
Quoting Mariner (Reply 15):
If push came to shove, then I imagine Airbus Finance would step in. They hold the paper on several of them.
Actually I was right, it says specifically in the docket filing that the buyer didn't want the A318s.
the Buyer s desire to acquire additional aircraft from Frontier and its preference for the Airbus A319-111 model of aircraft, especially given the technical challenges associated with certifying Airbus A318-111 aircraft
Don't know if there are really any technical challenges, but that may be an out the buyer had in the original deal that allowed them to switch to A319s.
Enilria From Canada, joined Feb 2008, 6552 posts, RR: 13 Reply 19, posted (5 years 4 months 1 week 2 days 12 hours ago) and read 4699 times:
It does appear they get $67 million net from the sale.
The amount of indebtedness that is secured by the mortgages to be discharged using the proceeds of the purchase price is approximately $97,700,000, which will result in net cash proceeds to the estate of approximately $67,300,000.
The Perseus document implies they may sell two more A319s.
Upon the sale of any Subject Asset (excluding Subject
Assets consisting of (x) spare parts and (y) up to eight (8) A-319 aircraft), Borrowers
shall prepay an aggregate principal amount of Loans equal to (A) if such Subject Asset is
an A319 or A320 aircraft, 50% of the greater of (y) Net Cash Proceeds of such Subject
Asset and (z) the Orderly Liquidation Value of such Subject Asset; and (B) if such
Subject Asset is an A318 aircraft, 50% of the Net Cash Proceeds of such Subject Asset.
Jgrant From United States of America, joined Apr 2008, 8 posts, RR: 0 Reply 22, posted (5 years 4 months 1 week 2 days 12 hours ago) and read 4637 times:
Are the fall schedules already reflecting the reduction of 8 aircraft or will additional cuts be necessary? Given same route, full 318 or 319 with same number of passengers, long haul or short haul... Where does the 318 work best? I don't see any particular route with the exception of DEN-SEA where F9 uses the 318 the most. Quite a mix of relatively short and longer hauls for utilization of the 318 in their schedules.
Enilria From Canada, joined Feb 2008, 6552 posts, RR: 13 Reply 24, posted (5 years 4 months 1 week 2 days 12 hours ago) and read 4614 times:
Quoting Jgrant (Reply 22): Are the fall schedules already reflecting the reduction of 8 aircraft or will additional cuts be necessary? Given same route, full 318 or 319 with same number of passengers, long haul or short haul... Where does the 318 work best? I don't see any particular route with the exception of DEN-SEA where F9 uses the 318 the most. Quite a mix of relatively short and longer hauls for utilization of the 318 in their schedules.
It's only six for now. Perseus has approved the sale of two others, but no deal is public. From looking at OAG it is my opinion that they need to drop two more aircraft from the schedule to sell six. I could be wrong.
25 AirFrnt: The A318s work very well for F9, because F9 is hubbed in DEN. Hint: think about the A318's specification, in particular MTOW, range and Denver. This
26 EXAAUADL: I suspect they are getting rid of the A319s cuz there is no after market for the A318s
27 Enilria: To your point, here is another snippet from the filing. This indicates that Frontier offered additional commissions on the sale of A318s. The commiss
28 Mariner: For the simple and obvious reason that - I think - almost everyone agrees. That there is less market for the A318's. That doesn't mean there is no ma
29 Enilria: I'm sure they did. Do you believe the "technical challenges" comment made by Frontier? If you do not, do you know the real reason?
30 Mariner: They said it. I take it at face value. mariner
31 Mariner: That's correct. The original 2 x A319's and an additional 6 x A319's, for a total of 8 x A319's: http://www.prnewswire.com/cgi-bin/st...story/07-29-2
32 TheGreatChecko: Which brings me to the next question, wasn't F9 parking 7 aircraft in September, not including the four they had already sold?? So that's 11 airframes
33 Mariner: I thought it was eleven, too. But I don't know if we have seen the end of it. Nor would a couple of sale/leasebacks surprise me. Whatever it takes. m
34 TheGreatChecko: True... I just want one or two more Q's yesterday, hehe. Checko
35 TheGreatChecko: So it sounds like there might be some more sale/ leasebacks in the mix for F9. No external source for that news yet and no specifics, unfortunately. H
36 Enilria: I went through the OAG a little more closely for September. There were a couple of markets that switched to Lynx and caused my initial count to be of
37 AirFrnt: No. F9 won't have trouble moving leases on the 319s and 320s. The 318s work just fine in DEN.
38 ScottB: They are indeed currently flying sixty Airbus aircraft, but that already reflects a reduction of two from 62, with two having been delivered to VTB.
39 Mariner: According to headline on this article, they are selling 47 x 319's to VTB: http://www.redorbit.com/news/busines...s_to_sell_47_a319s_to_vtb_leasing/
40 ScottB: And the moral of the story is...never believe everything you read on the Internet
41 Mariner: Ain't that the the truth. But this headline in the RMN seems right: http://www.rockymountainnews.com/new...ropped-when-frontier-got-its-loan/ RMN: "J
42 Enilria: So if you are right about those two planes having already left the property, then it would appear the 8 A319 aircraft mentioned in the Perseus agreem
43 Mariner: Where does it suggest they are regretting it? A statement of fact is not an expression of regret. I thought the article was obvious to the point of b
44 Dfanucci: Oh. My. God. Are you for real? And just what does that article say? That the owners plan to get involved if things don't go how they want? I would ho
45 Enilria: I find it interesting that the author of both articles, Chris Walsh, is revered for one article (pro) and attacked for another article (con) a few da