Frontier Done (?)

[jmreii]

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!

It's all Southwest fault; if thats what you think, I should be able to sell you some property in the tropics for little or nothing.
The airline industry in the U.S. have been trying to get their financial houses in order for years. We are still waiting with the idea that time definitely waits for no one.
Just look at the U.S. auto industry, they have all the time in the world.

 

[Andy]

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....

First off, BK is a huge drain of assets. I know that many on this board seem to think that BK's a magic bullet that allows the company in BK to have an unfair advantage. No. BK forces airlines to go for short term cash flows - which comes at a very high price. That's why more companies die in BK than survive. F9, with its size, is right on the cusp of whether or not it will survive. It's very dicey; I don't give them very good odds. Sorry if this ticks some off; I'm just being honest.

As for DIP financing, there's not a snowball's chance in hades that 12 investment banks are lining up with DIP financing. The only way that the number would be that high is if (vulture) hedge funds are also making DIP offers. I can tell you that the investment banks - C, MER, LEH, GS, JPM, BCS, DB, USB - have their own difficulties and from what I've read, C is completely out of the IB game for now. LEH may make an offer, but word is that they've been pulling their IB offers; quite frankly, they've got their own liquidity crisis. JPM's got its hands full with the BSC acquisition. BCS is talking to sovereign wealth funds because they're short on capital. DB's rumored to be next to be looking for additional capital. I don't know about USB; haven't been following them. GS is bulletproof.
In all, this is an extremely difficult time to try to raise DIP financing and any offers that F9 receives will not be at very good rates.

For everyone at F9, good luck. Hope for the best, but prepare for the worst.

 

[sluggo]

Tiger Woods gonna front da DIP....I guarantee and DEN F9 gonna be just fine, did dat rhyme? It sound divine!

 

[stratus72]

yeah, you're defensive. Relax. By the way, your numbers are wrong. Look it up before you talk next time. YOu know what, if it makes you feel better, I agree, SW is in a great position and smart business choices put them there. I'm in no way ragging on SW.

 

[ReverseSensing]

yeah, you're defensive. Relax. By the way, your numbers are wrong. Look it up before you talk next time. YOu know what, if it makes you feel better, I agree, SW is in a great position and smart business choices put them there. I'm in no way ragging on SW.

I don't know who this was directed at, by my numbers are right out of F9's 8K. If they're wrong, the SEC might be interested.

 

[Bob_Sacamano]

So you're saying that SWA should have remained dormant while newer airlines like JetBlue, AirTrain, Virgin, Skybus, etc. are gobbling up market share? I don't think that's sound business sense. As far as them screwing with other airlines that don't matter to them, I think they're just going to where the paying passengers are.

Maybe I'm wrong, but are you implying that Frontier's problems are SWA's fault?


As for your statement that "Just be assured that SWA will pay for what they are doing-the economics will catch up to them one day as well." I'm sure that none of the employees at Southwest are hoping for some karmic retribution to any other airlines.

Personally, I think Southwest is the most above-board, and straight-dealing airline in business today.

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!

 

[stratus72]

"Personally, I think Southwest is the most above-board, and straight-dealing airline in business today.[/quote]"

That's funny. I recall a little story in the news about mx issues, the luv fest with faa inspectors, etc. I do however agree with you that SWA has every right to grow and F9 is in BK primarily due to bad management decisions in the past...oil isn't helping either.

 

[Bob_Sacamano]

FYI, the "whistleblower" was a guy who applied for a job at Southwest and got passed over for another FAA employee.

The whole mx deal was a fiasco. Southwest self-reported, and everything they did was approved by Boeing. Total bs basically from Oberstar in an election year.

 

[nosoupforyou!]

OH Yeah, BK is fair,

So tell me, how is it that UAL goatfu**ed the rest of the players for four freakin' years while they undercut other airlines fares and shafted those they owed money to? How do you not pay your bills and charge 79 bucks for a transcon?

Yeah, that's fair. At least the BK rules have changed since then. Hell, for all I know my company will be longing for the day when you could hide AND cut the competitions throat.

 

[stratus72]

We're suppossed to receive an update as early as today regarding our BK/DIP situation. I'll post it if it's actual news.

 

[Bob_Sacamano]

Good Luck, guys.

We're suppossed to receive an update as early as today regarding our BK/DIP situation. I'll post it if it's actual news.

 

[JumpJetter]

We're suppossed to receive an update as early as today regarding our BK/DIP situation. I'll post it if it's actual news.

I suspect it will be that the court has delayed BK/DIP action until August.

 

[GuppyWN]

I suspect it will be that the court has delayed BK/DIP action until August.

Good. Hopefully with your record load factors that means things are looking up.

Gup

 

[N1atEcon]

"Maybe I'm wrong, but are you implying that Frontier's problems are SWA's fault?"

Using this logic then UAL's problems in DEN are because of Frontier right?

 

[BJK]

What is LUV's CASM excluding fuel?

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.

What is LUV's Cost per ASM excluding fuel? Frontier's was reported at 6.29 cents for 2007. My understanding is that it is approaching the 6.00 cent barrier this quarter. It's got to be pretty close to LUVs.