Frontier DIP congrats

[Cardinal]

I flew in to Pittsburgh today and there were about 7 or 8 airbuses parked with all of the covers on them during the middle of the day and not a sole was moving around the planes??????

Consider a new set of eyeglasses. Those were 8 Embraer 170s, owned and (not) operated by Republic Airways. Contract was rejected in April.

 

[radarlove]

The remaining aircraft have at least two lien holders, with some being superseded in BK court. F9 has encumbered every piece of equity they have, so if we liquidate after the perseus deal, perseus will get whatever fees they attached to the deal in cash and whatever they can get selling the remaining "owned" pieces.

DIP financing must be authorized by the bk judge, because this new set of creditors supercedes all other creditors. They move to the top of the lienholder's pile.

Rest assured, your new private equity investor will, in fact, get paid either way this goes.

In my view, we have too liberal bk laws in the states, in Europe, someone walking in the door right after bankruptcy is declared and getting first lienholder spot is not possible.

Here, we keep the companies on life support. In this case, that's a good thing, I like Frontier. But if I owned bonds, I'd be knashing my teeth right now, watching some new smartypants grab my collateral.

 

[TAWS]

The Pittsburgh aircraft are Republic.

O.K., I'll ask my original question again:

They only state the operational expense of the regional (Republic) operation, not the revenue. If that figure has already had the revenue figured in, then fair enough. If that figure doesn't have the revenue figured in already, then where is that to be found?

 

[RS_T9]

Wow... I thought this was a "Congrats to Frontier" thread. Seems to me as though some pilots are waiting for Frontier to vanish. What has Frontier done to insult anyone? Its astonishing to me anyone would want to see people out of work. Would you want your sons or daughters or spouse looking up at you and asking "geez...dad, how come you dont have a job anymore?"

TAWS...why is it so important for you to know Frontiers operating expenses? Do you work for Frontier? Why are you so concerned? Let it go.

RS_T9

 

[TAWS]

Wow... I thought this was a "Congrats to Frontier" thread. Seems to me as though some pilots are waiting for Frontier to vanish. What has Frontier done to insult anyone? Its astonishing to me anyone would want to see people out of work. Would you want your sons or daughters or spouse looking up at you and asking "geez...dad, how come you dont have a job anymore?"

TAWS...why is it so important for you to know Frontiers operating expenses? Do you work for Frontier? Why are you so concerned? Let it go.

RS_T9

The point is very simple:

Republic provided a service. There were costs assumed (by F9) for that service. Republic had access to the load/yield info. They were dumped by Menke and were truthfully surprised, as they had figured the service was actually quite profitable for F9. Yes, they figured that F9 was making a nice little profit! Why did they get rid of Republic? The rumor was that they had to reduce their fuel exposure, period.

Now, when you guys look at that balance sheet, bear in mind that you don't have the regional expense, but you also don't have that income either. If you think that Republics BK claim will evaporate, I'd suggest you look at what they sold the Delta BK claim for.

You guys need to look at the big picture here. (Yes, I did take finance in college).

 

[StaySeated]

Whoa look at the brain on TAWS!

Here is the only big picture those of us at F9 give a sh1t about.

Will we receive another pay check, and will that pay check bounce?

I appreciate your excitement regarding republic and the bk claim and revenue and cost, especially due to the fact that you took finance in college.

Break out your abacus bob, the reason republic was dumped was very simple. When the contract was signed fuel was cheap, when the contract was rejected in bk, fuel was not cheap.

Prior to the rejection in BK court (fuel at the time was around 115 a barrel) Republic CASM was 14.4 and Republic RASM was 9.9.

I am not an expert, I didn't take that finance course that you did, as I was way too busy studying the fascinating social experiment known as "undergrad". However, I am pretty sure that when your costs are 50% higher than revenue your chances of profitability are greatly reduced.

Seriously, don't take my sarcasm personally. I used to be a smart ass, but this recent trip down bk lane has just driven me to not give a sh1t. Good luck to you wherever you end up.

 

[Shrek]

All regional feed contracts in the future will have the regional partner buy their OWN fuel I think.

Eagle/Mesa/TSA/CHQ/etc........all of em.

 

[TAWS]

Total operating expenses for the fourth quarter of 2007, including interest
expense but excluding fuel charges (which are reimbursable by the Company's
partners) of $237.5 million, increased approximately 27.0% from $187.0 million
for the same quarter of 2006. Operating cost per ASM (CASM), including interest
expense but excluding fuel decreased to 7.38¢ from 7.63¢ in the prior year's
fourth quarter. For the quarter, the Company reported a 31.2% increase in
available seat miles (ASMs) to 3.22 billion ASMs, up from 2.45 billion ASMs
during the same period last year.

A quick search for Rjet financials will show what RAH CASM was for the last quarter '07. I don't know what they were charging F9 for the lift, but I think the figure you were given is high enough to make you wonder??? In comparison, F9 CASM was very low at 6.38 cents (approx). We operate multiple types, you guys operate 1 type - I doubt F9 mngt would sign a deal with #s like that.
BTW, I've been thru BK and furlough before, so I'm not gloating at all. BK claims are paid/sold/negotiated down all the time, but someone will get money. It was post grad.

Good luck.

 

[lowecur]

Frnt Cash Sunk To $66m

Big drop in cash in June Report to BK. Cash down from $118M to $66M as FRNT was forced to assume full responsibility for leased a/c (probably part of the Perseus requirement for DIP), and was backcharged. To offset the loss, they are selling (8) 319's ($80M) to VTB Leasing which will inturn lease them to Rossiya Airlines in Russia. The (2) 318s will stay with FRNT for now.

imp:​

http://www.flightglobal.com/article...l-liquidity-through-latest-aircraft-deal.html

 

[amF16]

Fresh from securing commitment from investment firm Perseus for $75 million in financing, Frontier Airlines hopes to strengthen its liquidity position by a further $80 million through a revised aircraft sale to VTB leasing and other aircraft transactions.


The Denver-based carrier was forced into Chapter 11 reorganization on 11 April after its major credit card processor unexpectedly informed Frontier it was holding back credit card receipts, which the airline said was a major threat to its liquidity.


Late last week Frontier announced its deal with Perseus, and today said it reached an amended agreement with VTB Leasing for the sale of Airbus A319 aircraft for placement on lease with Russian carrier Rossiya Airlines.


Originally VTB agreed to buy two A319s and two A318s from Frontier. Under the new agreement VTB is opting not to take delivery of the two A318s scheduled for August and instead is purchasing six additional A319s from Frontier next month.


The carrier says it has also reached an agreement on other sale and leaseback transactions that will bring the total liquidity boost to $80 million.


Frontier continues to face stiff competition from Southwest Airlines in Denver as it navigates through its reorganization. Last week Southwest CFO Laura Wright during an earnings call explained the carrier has redeployed 67% of its unproductive capacity since last year in developing markets such as San Francisco and Denver, which according to Wright is the carrier's “fastest growing city ever and we are going to be at 115 daily departures to 32 markets by November”.