Frontier Done (?)

[stratus72]

Holding your own against Southwest? Maybe. But your May 2008 passenger yield only increased 1.2% year over year. And that's with a 3.3% load factor increase.
The planes are more full, but F9's still selling their tickets in the lower fare buckets. That's the Southwest effect.

That's essentially what I posted earlier. SWA's hedging is the problem when it comes to our competing with them. Our load factors are up but we are losing money...not good.

 

[Whine Lover]

"spineless and uniformed."


The problem is, with no spine it's very hard to stand up straight and look good in my Uniform.

Glad I hung it up for good...But I am still working on fashioning a spine from some wolmanized lumber I have in the garage.

Seriously, I bought a R/T Ticket on F9 a few years back. EXCELLENT Airline, with great employees, service, aircraft etc.

Good Luck to all of you out there in this Industry, just don't get caught like a "deer in the headlights".

Denial and wishful thinking can be a powerful thing...But doing nothing and hoping for something really isn't a Plan.

YKMKR

 

[stratus72]

Updating my logbook as we speak. Thanks, I will hope for the best.

 

[LuckyDad]

I'll throw in my .02. First, I love F9, it's a first rate airline with great service. The problem, however, isn't JUST oil... it's finding financing going forward. With the news that SWA is bolstering DEN service, it gets harder and harder to find an investor willing to lend in that arena. (Try to borrow to start a hamburger joint next door to Micky D's).... then factor in oil and you've got the ballpark where F9 is playing.
Best of luck to all, but the be prepared advice is worth listening to.

 

[fool737700]

I do think what SWA is doing is wrong. They should have stayed the size they were 5 yrs ago and profited greatly off the cost effectiveness they had.

Their growth will just lead them down the same path all the legacies went down. Getting too large just leads to bankruptcy.... Especially for a domestic business like SWA. They have lost their "economy of scale" http://en.wikipedia.org/wiki/Economy_of_scale (in other words-as they become larger, thier profit margin will shrink) and they are now just being predatory.

It is a shame SWA has to screw with places that don't matter to them. They used to do a smart thing by avoiding major hubs-now they have just started to go after other airlines because they can.

I feel bad for Frontier people-you all have built a good airline. Just be assured that SWA will pay for what they are doing-the economics will catch up to them one day as well.

-Good Luck!

This post is unreal !!!! Now you are saying Southwest should not have grown over the last 5 years. What about Spirt, Airtran, Allegiant, FRONTIER? Should these airlines not have grown either?
And what does "SWA has to screw with places that don't matter to them" ? How do you know how SWA "feels" about Denver?
Stupid,liberal post !!!!!!!!!!!!!!!!!!!!!

 

[Max Powers]

This post is unreal !!!! Now you are saying Southwest should not have grown over the last 5 years. What about Spirt, Airtran, Allegiant, FRONTIER? Should these airlines not have grown either?
And what does "SWA has to screw with places that don't matter to them" ? How do you know how SWA "feels" about Denver?
Stupid,liberal post !!!!!!!!!!!!!!!!!!!!!

How is that "LIBERAL".....I agreed with you up until that point. Actually not growing and not changing is very conservative.

 

[ReverseSensing]

Reverse, where'd you get that data from? Curious; I haven't seen anything indicating cash burn.
I also haven't seen squat on DIP financing, but have heard that they're being offered loan shark rates. Friday's move in oil won't help.

Looks like you found it in the 5/28 8K:

Operating loss for 4/11 to 4/30 (20 days): $12.3 million. $600,000/day.

I didn't use the phrase "cash burn" but I suppose that's what a company in bankruptcy has to do, for obvious reasons.

I really do hope somebody at F9 can stomp on a rudder pretty soon and get back to straight and level. Good luck F9ers.

 

[ChinaClipper]

Cash Burn

is a bit high due to 1 time charges due to BK proceedings. Still losing but not at that rate, BK is a racket for sure. F9 has boiled the number of potential DIP providers to about 12 or so. They are now looking for the best deal, NO shortage of people willing roll the dice, its getting the best deal possible. UA downsizing announcement actually helps the case.... Fat lady has yet to sig, but can be heard clearing her throat....Stay tuned for a DIP announcement in a few weeks, that will tell the tale....

 

[N1atEcon]

YGTBSM! C'mon, how can that happen? Must have had a riot at the gate. Are you sure?

Yes Mr Savage that did happen. I flew in that evening as all the 75's were coming in. After they unloaded them a few crews flew them back out empty to where the leasing companies wanted them. The next A.M. there were a few left. On the 11:00 news that night they interviewed the stranded Pax. That is when the first class upgrade stories came out. It was $400.00 one couple was out.

 

[Skybus]

That's essentially what I posted earlier. SWA's hedging is the problem when it comes to our competing with them. Our load factors are up but we are losing money...not good.

Why is it always SW and our hedging. I do not have the time to look it up myself at the moment but I am sure somebody WILL correct me if I am not correct (I am not). Frontiers NON fuel costs are significantly higher than ours. SO even with a level playing field on fuel, we still would have a big cost advantage. Everybody thinks when our hedges run out....... Guess what we are still will be either making money or loosing a hell of a lot less money than nearly everybody else. Its a race to see who runs out of cash first. Guess where my vote will go???

 

[ReverseSensing]

Cash burn is a bit high due to 1 time charges due to BK proceedings. Still losing but not at that rate, BK is a racket for sure.

The number I posted ($600,000 per day) was OPERATING loss and did not include one-time charges due to bankruptcy proceedings.

That number (net loss) was $823,000 per day.

F9's operating loss might be less now due to the pay concessions that went into effect and maybe some fare increases, but the price of jet-A has continued to rise since April, so higher fuel expenses probably offset lower labor costs and higher revenues.

Not trying to pile on, just trying to keep the thread accurate. Sorry.

 

[maxblast72]

How is that "LIBERAL".....I agreed with you up until that point. Actually not growing and not changing is very conservative.

Maybe cause liberals like to blame their problems on big business. Most conservatives believe that the free market will determine the winners and losers. Liberals think the big government is great and should determine the winners and losers based on how they feel instead of using actual performance.

Instead of blaming another well run airline for their problems, Frontier management should be trying to figure out how they got in this situation in the first place (they entered Bankruptcy well before the biggest part of the fuel spike and credit card company changed their holdback policy due to Frontier's performance over the last few years, not over a couple of days).

 

[ReverseSensing]

Maybe cause liberals like to blame their problems on big business. Most conservatives believe that the free market will determine the winners and losers. Liberals think the big government is great and should determine the winners and losers based on how they feel instead of using actual performance.

Nonsense. You have no more of an idea what a liberal is than you do of what a conservative is. But what you are saying is stylishly in vogue these days.

What you are parroting is what the radio talk show hosts, email forwarders, and fake news broadcasters toss around 24/7. Just because they say it doesn't make it so.

 

[Tanker Clown]

is a bit high due to 1 time charges due to BK proceedings. Still losing but not at that rate, BK is a racket for sure. F9 has boiled the number of potential DIP providers to about 12 or so. They are now looking for the best deal, NO shortage of people willing roll the dice, its getting the best deal possible. UA downsizing announcement actually helps the case.... Fat lady has yet to sig, but can be heard clearing her throat....Stay tuned for a DIP announcement in a few weeks, that will tell the tale....

Isn't loaning an airline money kinda like lending cash to a meth addict and expecting to get it back? If a lender is looking for a for a write off, then why not make a big donation to a charity or something instead of loaning it to an airline that has less than a 50/50 chance of being around by the end of the year?

 

[ultrarunner]

What is Frontier putting up to back the loan, should there be one?