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.....

 

[hawk996]

double post

 

[hockeypilot44]

Whatever happened to raising ticket prices to cover expenses? Why take it off employees when you can just charge more? I guess I will never understand this industry. A grey hound ticket costs more than an airplan ticket.

 

[AA717driver]

Whatever happened to raising ticket prices to cover expenses? Why take it off employees when you can just charge more? I guess I will never understand this industry. A grey hound ticket costs more than an airplan ticket.

Sad to say, both SWA and UAL would undercut them in DEN (and everyone else would in the rest of the country). TC

 

[HighSpeedClimb]

ExPat

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.

Sad to say but F9 won't be the first for those Expat jobs, remember Aloha,ATA,Skybus,Champion...
There's about 20 Aloha guys, your's truly included, going to Skymark in Japan where 8 more planes are arriving over the next 2 years. They pay your Japanese taxes of 30% which now you get credited in the US, and for someone like me living in Hawaii its a 7 hr commute which of course they pay for. Lots of money to be made if your willing to take the plung. They'll pay a B737NG guy what the US pays B777 guys. Hopefully in 3 to 4 years things will be better in US. Just something to keep in the back of your mind. Anyone want more info you can PM me.

Good Luck F9...been there...

 

[Golden Falcon]

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.

uh huh...they left out the bit about the golden parachutes they arranged for themselves..funny huh??

 

[AA717driver]

uh huh...they left out the bit about the golden parachutes they arranged for themselves..funny huh??

So cynical at such a young age... TC

 

[HighSpeedClimb]

Been there guys...They take your cuts and shut down anyway. Start looking now, you'll feel better if things get worse. As always..Good luck!!

 

[carl p]

Hate to say it, but it's the same play book. Stop matching 401k, ask for 10% cut, and go out of business anyway. Have the t-shirt, at least we said no to the cut and kept our money for the last couple months before the end. Best of luck F9!

 

[Fubijaakr]

Never volunteer for a pay cut!

 

[ultrarunner]

If it were me, I would force the JUDGE to cut my pay, before I EVER volunteered for a pay cut. And then I'd never let the court forget they took food off my table!

Think about it....

You tell your MEC to go in there and tell management to pound salt! Force your management to go in front of a judge and beg that judge to let them TAKE money out of your pocket.

We're talking a FEDERAL judge here folks. Make him, or her, cut your pay, your benefits, your retirement, etc...

THEN, take it to the press...advertise the crap out it... That your FEDERAL JUDGE TOOK FOOD OFF YOUR TABLE. And your management got 6 month retention packages!

If one more pilot group succumbs to MORE concessions, we're all fuked!

You guys really underestimate what a group effort can accomplish.

 

[Dumb Pilot]

Everywhere else in the world salaries are going up due to the increased demand for experienced crews. In the biggest pilot market, in the biggest economy on the planet, they are asking for pay cuts from what already is the lowest paid pilots of any industrialized nation.

 

[StaySeated]

If it were me, I would force the JUDGE to cut my pay, before I EVER volunteered for a pay cut. And then I'd never let the court forget they took food off my table!

Think about it....

You tell your MEC to go in there and tell management to pound salt! Force your management to go in front of a judge and beg that judge to let them TAKE money out of your pocket.

We're talking a FEDERAL judge here folks. Make him, or her, cut your pay, your benefits, your retirement, etc...

THEN, take it to the press...advertise the crap out it... That your FEDERAL JUDGE TOOK FOOD OFF YOUR TABLE. And your management got 6 month retention packages!

If one more pilot group succumbs to MORE concessions, we're all fuked!

You guys really underestimate what a group effort can accomplish.

It is not the bk judge's responsibility to feed my family, he has a responsibility to the creditors committee and that is all.

During the comair bk (DAL filed and comair went with them) the pilot group took 22% concessions before Ch.11 and then the company filed an 1113 post petition. A comair pilot went before the judge with documentation in hand that he already qualified for food stamps and he obviously could not accept another pay cut. The judge's response was simple, "not my problem". Once in chapter 11, your company exists in a vacuum and it doesn't matter what other airlines pay, the court only looks at your airline and decides if they have a viable business plan. If they do, the court allows them to emerge, if they don't the creditors committee recommends liquidation. It really is that simple. This is my third journey through the process and it has been almost exactly the same every time. This is the closest I have been to liquidation as we are currently funding the entire process ourselves.

With regard to telling management to pound sand, the thought crossed everyones mind here. But once the emotion of anger subsided, the voice of reason took over. We also had an external voice of reason with R. Babbit (40 years experience in aviation, former pres. of ALPA, rode EAL into the ground) as a consultant. When you sit in a room with someone that has been through this process over and over and listen to the fact that not one labor group has prevailed in an 1113, you realize pretty quickly what your real choices are.

Add to all of this that the company has an 1110 cure hanging over their heads and your choices come down to this.

Collect one, maybe two more full paychecks. Or take a hit and hope you collect 8 more 85% paychecks.

 

[A350]

The "brotherhood" is alive and well, isn't it?

All of you getting on here and talking tough about what you would do if faced with a similar situation are a bunch of windbags who secretly can't wait for the "other guy" to fail so perhaps you won't.

When will you guys get it.....these pilots are fighting for their existence....not some pie in the sky version of what their pay should be.

Ignore the negativity of these people and do what you feel is right for your family. These same people who want you to stand up for what they feel is right would throw you under a moving train if it advanced their careers one number.

A350

 

[Rez O. Lewshun]

Everywhere else in the world salaries are going up due to the increased demand for experienced crews. In the biggest pilot market, in the biggest economy on the planet, they are asking for pay cuts from what already is the lowest paid pilots of any industrialized nation.

And we can all look in the mirror.

We get the country we create, the gov't we vote for and the culture we promote.

WE have created this ultra comeptitive market/culture where there are winners and losers... we designed it, we use it, we relish it...

We do that by voting for politicians who don't care about us, but yet we believe if we give them a free pass the crumbs that fall down will be plenty...combined with a fear of being labeled something unpopular....

Finally, we all about ourselves... the individual....


Pull the Ladder up.....cause its up yours I got mine....

 

[USMC319]

The "brotherhood" is alive and well, isn't it?
All of you getting on here and talking tough about what you would do if faced with a similar situation are a bunch of windbags who secretly can't wait for the "other guy" to fail so perhaps you won't.

When will you guys get it.....these pilots are fighting for their existence....not some pie in the sky version of what their pay should be.

Ignore the negativity of these people and do what you feel is right for your family. These same people who want you to stand up for what they feel is right would throw you under a moving train if it advanced their careers one number.
A350

A350,
This is one of the truest statements I have ever read on this board. Quite frankly, all the hyperbole being spewed by many of the "principled" airline pilots has been nauseating. Thanks for the reality check.

 

[Joblu]

A350,
This is one of the truest statements I have ever read on this board. Quite frankly, all the hyperbole being spewed by many of the "principled" airline pilots has been nauseating. Thanks for the reality check.

Paycuts in an airline such as F9 considering it's size will make no difference. The fate of the airline is the hands of upper management and not the few bucks that would be taken in by concessions especially in this environment.

I would rather walk away if the time comes with pride and a few more bucks in my pocket instead of stuffing the pockets of executives when time runs out.

Even though you turned me down 2 times, best of luck F9!

 

[greenbayfan]

When will you guys get it.....these pilots are fighting for their existence....not some pie in the sky version of what their pay should be.

Ignore the negativity of these people and do what you feel is right for your family. These same people who want you to stand up for what they feel is right would throw you under a moving train if it advanced their careers one number.

A350

A350, have you ever worked for a carrier that asked for concessions while in Ch11? I doubt it from the above quote.

The bottom line is this, take your hit from the court, NOT voluntarily. There is a one time hit taken if the court imposes it. If you take it voluntarily, the company can go to court asking for more. Don't do it boys and girls, take your medicine in court. Unless your company has some miraculous plan, which won't help anyway with SWA going in for the kill in DEN, you are fu*cked anyway...

 

[Superpilot92]

this is ridiculous!!

Frontier Airlines Inc. was authorized yesterday to adopt a severance plan for 65 top executives that theoretically could cost as much as $4.4 million, though the company said the expense probably won't exceed $1.5 million. Objections from the U.S. Trustee were resolved. The severance payments would amount to 10 months' salary or less. The plan was supported by the creditors' committee. To read Bloomberg coverage, click here. Frontier is the only U.S. airline still flying out of six to file in Chapter 11 since December. The holding company's financial statement for the end of December listed assets of $1.1 billion and debt totaling $933 million. With 62 aircraft serving 70 destinations, Frontier is the second-largest carrier operating from Denver, where it competes with United Airlines Inc. The case is In Frontier Airline Holdings Inc., 08-11298, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Bloomberg.com: News

 

[crxpilot]

this is ridiculous!!

Frontier Airlines Inc. was authorized yesterday to adopt a severance plan for 65 top executives that theoretically could cost as much as $4.4 million, though the company said the expense probably won't exceed $1.5 million. Objections from the U.S. Trustee were resolved. The severance payments would amount to 10 months' salary or less. The plan was supported by the creditors' committee. To read Bloomberg coverage, click here. Frontier is the only U.S. airline still flying out of six to file in Chapter 11 since December. The holding company's financial statement for the end of December listed assets of $1.1 billion and debt totaling $933 million. With 62 aircraft serving 70 destinations, Frontier is the second-largest carrier operating from Denver, where it competes with United Airlines Inc. The case is In Frontier Airline Holdings Inc., 08-11298, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Bloomberg.com: News

So, $1.1 billion minus $933 million equals $77 million leftover right now? How long can that last?

 

[CitationUltra]

this is ridiculous!!

Frontier Airlines Inc. was authorized yesterday to adopt a severance plan for 65 top executives that theoretically could cost as much as $4.4 million, though the company said the expense probably won't exceed $1.5 million. Objections from the U.S. Trustee were resolved. The severance payments would amount to 10 months' salary or less. The plan was supported by the creditors' committee. To read Bloomberg coverage, click here. Frontier is the only U.S. airline still flying out of six to file in Chapter 11 since December. The holding company's financial statement for the end of December listed assets of $1.1 billion and debt totaling $933 million. With 62 aircraft serving 70 destinations, Frontier is the second-largest carrier operating from Denver, where it competes with United Airlines Inc. The case is In Frontier Airline Holdings Inc., 08-11298, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Bloomberg.com: News

This is merely to cushion the fall of the people who ran the company into the ground in the first place.