GuppyWN
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COLORADO SPRINGS - Just months after starting service in Colorado Springs, a 114-page Security and Exchange Commission report filed by Frontier Airlines suggests the company may be forced to discontinue its operations. According to the SEC, a 10-K provides a comprehensive overview of a company's business and financial condition and includes audited financial statements.
Under a topic entitled "Risks Related To Frontier," the company writes: "We face significant liquidity challenges which could impact our ability to continue our operations."
Since filing for Chapter 11 Bankruptcy on April 10, Frontier Airlines reports a net loss of nearly $38.5 million ($38,426,000).
According to the airline's SEC 10-K, a number of factors need to change or Frontier could be forced to discontinue operations:
"We have substantial liquidity needs in the operation of our business and face significant liquidity challenges due to historically high aircraft fuel prices, low passenger yields, credit card processor holdbacks and cash reserves and other cost pressures. Accordingly, we believe that our cash and cash equivalents and short-term investments will 12 remain under pressure during 2008 and thereafter. We are uncertain we will be able to obtain debtor in possession financing during our Chapter 11 proceedings. Accordingly, as we continue to seek debtor in possession financing, we will also attempt to address our liquidity concerns through the sale of aircraft and other assets, the sale and leaseback of aircraft and other assets, rejection of Republic Airlines contract, negotiations with our credit card processors and other liquidity enhancement opportunities. We cannot guarantee that these efforts to raise cash and improve our liquidity will be successful, in which case we could be forced to discontinue our operations."
"There's no doubt that when you're in Chapter 11, of course going out of business is always an option," says Frontier spokeswoman Lindsey Purves. "We're making capacity reductions. We're not the only airline to do this, in fact we're one of the last airlines to do this."
In the 10-K, Frontier states: "increases in fuel prices have had and could continue to have a material adverse effect on our operations and financial results."
"A significant portion of our loss is fuel," says Purves.
From April 1, 2007 until March 31, 2008, Frontier paid an average of $2.45 a gallon for fuel. Since filing for Chapter 11, the airline pays an average of $4.22 a gallon (as of June 23, 2008).
In the 10-K, Frontier also sites competition from United and Southwest Airline as a risk factor, and having to match airfare prices on similar routes to retain its market share.
Frontier also says high costs at DIA "may impact our results of operations."
"We are doing absolutely everything we possibly can to stay in this game," says Purves.
Frontier is also planning layoffs for later this year, although the exact number of employees isn't known.
"Your are forced to make some changes in the organization in order to survive in the current market and I think as all those airlines are doing, it's just a statement of the times and it's what we're doing to stay in business," says Purves.
According to Purves, there's no change to service at the Colorado Springs Airport. Frontier just started flying from Colorado Springs in mid-April. Purves didn't know the status of the planned maintenance hangar in Colorado Springs, and couldn't say if the bankruptcy filing would delay construction or cancel it altogether.
As of June 23, Frontier reports 6,170 employees. The airline flies 60 jets to 59 locations.
KRDO.com Colorado Springs, Pueblo - Weather, News, Sports - Frontier SEC Report Refers To "Discontinuing Operations"
I'm ex F9 and this sucks guys. I'm hoping this doesn't come to pass but if it does PM me if you guys need a WN reference and we'll talk.
Gup
Under a topic entitled "Risks Related To Frontier," the company writes: "We face significant liquidity challenges which could impact our ability to continue our operations."
Since filing for Chapter 11 Bankruptcy on April 10, Frontier Airlines reports a net loss of nearly $38.5 million ($38,426,000).
According to the airline's SEC 10-K, a number of factors need to change or Frontier could be forced to discontinue operations:
"We have substantial liquidity needs in the operation of our business and face significant liquidity challenges due to historically high aircraft fuel prices, low passenger yields, credit card processor holdbacks and cash reserves and other cost pressures. Accordingly, we believe that our cash and cash equivalents and short-term investments will 12 remain under pressure during 2008 and thereafter. We are uncertain we will be able to obtain debtor in possession financing during our Chapter 11 proceedings. Accordingly, as we continue to seek debtor in possession financing, we will also attempt to address our liquidity concerns through the sale of aircraft and other assets, the sale and leaseback of aircraft and other assets, rejection of Republic Airlines contract, negotiations with our credit card processors and other liquidity enhancement opportunities. We cannot guarantee that these efforts to raise cash and improve our liquidity will be successful, in which case we could be forced to discontinue our operations."
"There's no doubt that when you're in Chapter 11, of course going out of business is always an option," says Frontier spokeswoman Lindsey Purves. "We're making capacity reductions. We're not the only airline to do this, in fact we're one of the last airlines to do this."
In the 10-K, Frontier states: "increases in fuel prices have had and could continue to have a material adverse effect on our operations and financial results."
"A significant portion of our loss is fuel," says Purves.
From April 1, 2007 until March 31, 2008, Frontier paid an average of $2.45 a gallon for fuel. Since filing for Chapter 11, the airline pays an average of $4.22 a gallon (as of June 23, 2008).
In the 10-K, Frontier also sites competition from United and Southwest Airline as a risk factor, and having to match airfare prices on similar routes to retain its market share.
Frontier also says high costs at DIA "may impact our results of operations."
"We are doing absolutely everything we possibly can to stay in this game," says Purves.
Frontier is also planning layoffs for later this year, although the exact number of employees isn't known.
"Your are forced to make some changes in the organization in order to survive in the current market and I think as all those airlines are doing, it's just a statement of the times and it's what we're doing to stay in business," says Purves.
According to Purves, there's no change to service at the Colorado Springs Airport. Frontier just started flying from Colorado Springs in mid-April. Purves didn't know the status of the planned maintenance hangar in Colorado Springs, and couldn't say if the bankruptcy filing would delay construction or cancel it altogether.
As of June 23, Frontier reports 6,170 employees. The airline flies 60 jets to 59 locations.
KRDO.com Colorado Springs, Pueblo - Weather, News, Sports - Frontier SEC Report Refers To "Discontinuing Operations"
I'm ex F9 and this sucks guys. I'm hoping this doesn't come to pass but if it does PM me if you guys need a WN reference and we'll talk.
Gup
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