Any good news at Frontier today?

[10mm]

Haven't heard from my buddy. Any good news?

10

 

[monkeybrains01]

No...9/30

 

[Cornelius]

No good news. The deadline has been extended for 2 weeks so the can squeeze as much money out of the workforce as possible.

 

[ricj41]

Cornelius, that's not going to happen considering they revised upwards the operating margin for Frontier from 8%-10% to 10%-12%. The pressure is on Bedford and Seigel now to get this done. Not the employees.

 

[Cornelius]

RJCJ41,

That's good news with margins increasing to a respectable level. Did you find the new margin in a SEC filing?

 

[Flyby1206]

Kind of interesting that NK just hired an ex-F9 executive to be COO

http://finance.yahoo.com/news/spirit-names-frontier-exec-chief-231849366.html

NK/F9 merger?

 

[StaySeated]

Kind of interesting that NK just hired an ex-F9 executive to be COO

http://finance.yahoo.com/news/spirit-names-frontier-exec-chief-231849366.html

NK/F9 merger?

Probably not until a Frontier IPO. Indigo didn't get into this just so they could merge with an airline they just punched out of. The Indigo/F9 experiment is going to take a couple years to develop.

 

[johnsonrod]

As mentioned before, the CEO of Spirit (Ben Baldanza) used to work for David Siegel (CEO of Frontier) while Siegel was the CEO of USAirways pre-AWA merger. This industry is incestuous.....

 

[fam62c]

Cornelius, that's not going to happen considering they revised upwards the operating margin for Frontier from 8%-10% to 10%-12%. The pressure is on Bedford and Seigel now to get this done. Not the employees.

Those are operating margins so it's tough to say if a stand-alone Frontier would be profitable. It depends on how much debt goes with Frontier and the cost of that debt as well as the cost structure of Frontier without efficiencies that may be realized from being part of a larger carrier. The employees have to ask what happens if this deal falls through. I don't know if Frontier by itself is a viable IPO or spinoff candidate. It sounds like this pending deal involves debt assumption with little or no cash which would indicate that the airline has no net positive value, i.e. the carrier is going to be given away to get the debt off the Republic books. If Frontier is as financially viable as the CEO says it is why are there not more interested buyers and, for that matter, why get rid of it at all?

It would seem to me that a deal where a buyer with previous experience operating and growing airlines is interested in buying the carrier as a whole and operating it is a deal worth seriously considering. If this deal falls through I would be surprised if whatever comes next will be better for the Frontier employees. If there were multiple interested parties competing for the airline you might have some leverage but that doesn't appear to be the case. Frontier seems to be somewhat of an albatross. Maybe Bedford is motivated enough to make the buyer an offer they can't refuse and eat the employee giveback instead of the employees eating it, who knows.

It looks like this buyer will make a decision soon but it doesn't seem like they have to have Frontier unless the deal is very attractive to them, they don't seem interested in overpaying for the airline the way Republic did.

 

[Cornelius]

fam62c, spot on!

If this deal falls through, F9 will be something for the history books. A lot of us care about the airline but it is not worth saving at this point if Bedford and company steal anymore from us.

Me and others will leave F9 in mass quantities if the deal falls through.