Frontier files chapter 11

[D-Bo]

deleted

 

[ableone]

At $120/bbl we are all on borrowed time.

If you are at Frontier look at it this way: If you do go chapter 7 at least you get the first crack at the ex pat jobs before the rest of us.

The only thing worse than being an employee of the first company to go out of business is being an employee of the last to go tango uniform.

 

[Cardinal]

Didn't want to be first with this news, but since I've found it elsewhere on the interweb, here goes:

Concessions are here. 10% paycuts are being imposed on non-union employees until September 30th. (Approx, a sliding scale will apply to very low hourly rate employees). 401K match suspended until September 30th.

FAPA Leadership has tentatively agreed to 14.5% cut, and 401k match suspension till September 30th. Vote will close on Monday, May 19th. The pilot's agreement is contingent on every other group taking a cut within a reasonable timeframe. the $4.57 million value of this stunt will become a claim in the BK court.

The IBT represented mechanics have balked for the moment, and went public in the local paper. They point to mgmt, who took a 10-20% paycut but also implemented a 6-9 month severance package to "retain" themselves. Good points, and cojones, as usual from the mx folks.

So much for "a whole different bankruptcy."

 

[CitationUltra]

Didn't want to be first with this news, but since I've found it elsewhere on the interweb, here goes:

Concessions are here. 10% paycuts are being imposed on non-union employees until September 30th. (Approx, a sliding scale will apply to very low hourly rate employees). 401K match suspended until September 30th.

FAPA Leadership has tentatively agreed to 14.5% cut, and 401k match suspension till September 30th. Vote will close on Monday, May 19th. The pilot's agreement is contingent on every other group taking a cut within a reasonable timeframe. the $4.57 million value of this stunt will become a claim in the BK court.

The IBT represented mechanics have balked for the moment, and went public in the local paper. They point to mgmt, who took a 10-20% paycut but also implemented a 6-9 month severance package to "retain" themselves. Good points, and cojones, as usual from the mx folks.

So much for "a whole different bankruptcy."

I thought their only problem was that their credit card processor increased their set-aside?

This has all the appearances of floundering management trying to save the balance sheet on the backs of the employees that they supposedly value so much. Do you think 10 percent of payroll is going to save the company?

 

[labbats]

My question is this... how can they come to the pilot group and ask for concessions when they already have very recently? (lowered first year pay, etc)

I was under the impression Frontier had the upper hand on routes due to the lower payroll.

I've jumpseated on F9 recently and was treated very well. I also tried to get a job last year but was a bit late on the hiring trend. I wish the best to all involved.

 

[Pilotbob3]

Any pilot that votes YES is an idiot!

 

[Little Mojito]

Well, it seems that management needs our pay cuts to fund their severance packages. Pay concessions will not save Frontier. If we can't make this work with our barely reasonable pay, then maybe we need to find something else to do. As for me, I will vote NO and hope we can secure DIP financing and that Frontier will continue to exist.

 

[spinproof]

You may, I'm sorry to say, have no choice in the matter. A bankruptcy judge will eventually decide your fate. It doesn't matter what brought you to BK, all that matters to a judge is getting you out.

He will depend largely on the company presenting a plan that cuts expenses and provides revenue for future operation. Employees(all) pay will be included.

Been there, accepted a concessionary contract, did not get a t-shirt!:angryfire

 

[exuala320guy]

Good luck everyone, this kind of thing sucks. I have been there done that with ual and don't wish it on anyone.

The following is an internal Frontier Airlines memo obtained by 9NEWS from an anonymous source.

It's hard to believe it has only been about a month since we announced our Chapter 11 reorganization. It seems like a lifetime ago with all the work that has taken place in such a short time, and we are only at the beginning of a long journey that will have its ups and downs. Some of the more recent "ups" include the fact that we continue to see great demand for our product. We can also tell you that we have shared the story of our future with more than 40 potential investors, and the reception has been quite positive. In addition, the bankruptcy proceedings and the creditors' committee meetings have been very smooth and absent of controversy.

However, at this critical time when we are trying to secure DIP financing, we must show these potential investors and the creditors' committee a viable business plan that will allow us to operate in this challenging environment of rising oil costs. They need to see that we are doing everything possible in relation to fuel costs and to improve Frontier Airlines Holdings, Inc. bottom line. Since we have entered bankruptcy, fuel has increased from $107/barrel to over $122/barrel. This represents an annual increase in expenses of nearly 75 million dollars. Unfortunately, these increases are no longer offset by fuel hedges as our hedging agreements became invalid when we entered bankruptcy.

Therefore, we need to make some significant changes to our cost structure in order to achieve a non-fuel cost per available seat mile (CASM) of 5.8 cents. We have aggressively been eliminating non-labor expenses as well as requesting cost reductions from our suppliers and vendors. Unfortunately, we cannot reach our CASM ex fuel goal by only reducing non-labor expenses. As a point of necessity, we are going to have to reduce our labor and benefit expenses very quickly. We recently announced pay cut reductions for the entire Frontier Airlines Holdings, Inc. officer group effective May 1. In addition, We are now asking that all employees also take a pay reduction through September 2008. At that time, we will review our financial situation and the market conditions again. We will also be suspending the 401(k) match for this period of time.

Frontier Airlines, Inc. has been meeting with all of their union groups to ask for their assistance in helping the Holding Group achieve our cost goals. Historically, Frontier Airlines unionized and non-union employee groups have pulled together during the tough times. We are proud to say that once again, most of Frontier Airlines union leaders have taken the urgency of the situation to heart and are doing their part to help guide us through the tougher times. Both the pilot's union (FAPA) and the dispatcher's union (TWU) have tentatively agreed to the terms of the concessions and will be meeting with their membership to review the details of the proposed concessions. Those concessions will still require ratification by the members.

At this time Frontier Airlines has not been able to reach a tentative agreement with the leadership for the Teamsters Union that represents their mechanics. However, because of the challenges we face, we must still move forward.

Managers will be meeting with all of our employees during the upcoming week to provide a detailed explanation of the specific pay cuts for each workgroup.

We know that today's news will be difficult for many of you, and we know that everyone has been working extremely hard. Please be patient as we work through these challenging times together. In addition, we want to emphasize to you that we will revisit these changes in September, and depending on the situation with fuel and our own financials, we will decide if we are able to restore a portion or all of the wage levels.

We want to also apologize for this letter coming out this evening. Our intention was to send this letter at the beginning of the workday so that your management would be present to discuss and answer any questions. Unfortunately, the press received information late today informing them of these temporary wage reductions. As we hope you are all aware we have tried to be proactive and forthright in all of our dialogue with you. In this spirit we felt that the letter should be sent out immediately.

Even though we are facing many headwinds we are still as focused as ever and encouraged by the vast amount of progress that we have made during the last eight months. Without the dedication and hard work by all of you this would not be the case.

Your support continues to be invaluable and appreciated. Thank you for your support in this effort. Again, we know how hard this is for everyone, and we hope you understand that we would not be asking for these pay reductions if it wasn't absolutely necessary for the longer term viability of Frontier Airlines Holdings, Inc.

(Frontier Airlines internal memo)

 

[hawk996]

That internal memo reads just like the one we got at Independence Air. You can fly the planes for free and still go out of business. Say "NO", make a good pay check and start looking for a new job, Say "Yes", make a smaller pay check and still end up looking for a new job.

Yes is sucks guys/girls, been there done that and have the T-shirt. No one can really tell you what to do or how to vote, just understand that your pay is not what drove your company into CH.11 it was your over paid management team that does not know how to run an airline.

Indy Air management team walked away with millions in their pockets, we got nothing....

Good Luck.....