Welcome to Flightinfo.com

  • Register now and join the discussion
  • Friendliest aviation Ccmmunity on the web
  • Modern site for PC's, Phones, Tablets - no 3rd party apps required
  • Ask questions, help others, promote aviation
  • Share the passion for aviation
  • Invite everyone to Flightinfo.com and let's have fun

Frontier Gets Pimp-Slapped

Welcome to Flightinfo.com

  • Register now and join the discussion
  • Modern secure site, no 3rd party apps required
  • Invite your friends
  • Share the passion of aviation
  • Friendliest aviation community on the web


Well-known member
Mar 21, 2005
Frontier Air could face cash crunch
Tuesday November 29, 1:45 pm ET WASHINGTON (Reuters) - Frontier Airlines Inc. (NasdaqNM:FRNT - News), gearing up for stiffer competition at its Denver hub from low-cost power Southwest Airlines (NYSE:LUV - News), on Tuesday warned investors that it faces a potential cash crunch that could jeopardize its business The company, whose shares fell 7 percent, said it may not be able to secure financing for new aircraft, meet debt payments or follow through with expansion plans.
"Our business, financial condition or results of operations could be materially adversely affected by any of these risks," the airline said in a U.S. Securities and Exchange Commission filing.
Frontier said it is trying to acquire financing for four of 11 Airbus A319s it has committed to purchase, but could not guarantee that it will be successful. The airline also plans to lease up to four A319s.
The company said an inability to acquire the planes could have a material adverse effect on cash balances or delay aircraft deliveries that would impair its long-term growth strategy.
Frontier also pointed out the potential impact of competing in Denver with a restructured United Airlines (OTC BB:UALAQ.OB - News) and Southwest, which will start service there in January with flights to Chicago Midway, Las Vegas and Phoenix.
Frontier also warned about possible low-cost fare wars, predatory pricing and competitors placing additional planes on selected routes to drive up capacity.
"The future activities of United, Southwest, and other carriers may have a material effect on our revenues and results of operations," Frontier said.
Other low-cost competitors JetBlue Airways (NasdaqNM:JBLU - News), AirTran Airways (NYSE:AAI - News) and Alaska Airlines (NYSE:ALK - News) have also launched service from Denver within the past three years.
Frontier said on Tuesday it would sell $80 million of convertible debentures due 2025 to ease its debt load. Total debt was $346.5 million on September 30.
The company's shares were down 64 cents at $8.25 in afternoon Nasdaq trade.
Frontier cuts fares
Tuesday November 29, 1:36 pm ET Frontier Airlines announced reduced fares, as low as $59 each way to any of the 47 U.S. cities it flies to and as low as $99 each way to any of its six Mexico cities. Fares are available for travel to and from Denver through March 8. Round-trip, 14-day advance purchase is required for U.S. travel, but no advance purchase is required for Mexico travel. Some blackout dates apply.
Industry observers suspected a fare war might start when low-cost carrier Southwest Airlines announced in October it would begin service out of Denver International airport in January.
That's real smart, first they warn that they are facing a cash crunch and then they cut fares! Once again, I thank god every day that I don't work for an airline.
Indy Air was offering $29 fares from IAD to ATL, BOS, etc. That is getting desperate. I hope Frontier doesn't get close to that. I doubt they will......

Bye Bye--General Lee
I don’t think the fare sale is primarily to raise cash Radar.

I think it is the opening salvo in the fare war / brand awareness / price awareness battle that is going to be for some time to come.

SWA is amping up the marketing as the prepare to launch Denver and we are making the statement that our fares are in line with theirs, but with the product Denverites have grown to love.

I guess time will tell, but I don’t plan on dusting off the resume any time soon.
Overheard in the board room at your favorite legacy carrier,
"We'll lose a little on each ticket, but we'll make it up in volume!"

Hey F9 Driver, where did you overhear that?
Most recently... around the Ted gates at DEN :D

Latest resources