Frontier secures DIP!

[AnimalTale]

He also said the word on Denton Drive in DAL is that SWA management thinks F9 will be around. Take it FWIW.

Thanks for your nice words Pinnacle!

Tell your friend over at all-knowing, mighty & most importantly humble SWA that the "folks" over at TOWER RD say, "Everybody will pay the Piper, sooner or later".

CYA

 

[greenbayfan]

But I guess question remains, is the industry as a whole better off for those who remain and those who depend upon it for their living, when carriers continue to go in and out of bankruptcy?

Wow, someone on FI that gets it! I hold no ill will towards Frontier, Spirit, or any other airline. I just would like to see the weakest in the industry cease to exist to get the airline industry back to where it should be....turning a profit.

Everyone on FI preaches fighting for what our profession deserves in terms of pay and benefits, but sacrifices need to happen for the airline industry to get to that point, and quite frankly those sacrifices are lost jobs in the form of a downsizing industry. We as pilots have no leverage when airlines aren't making money, and the only way airlines will start making money is for some to fail to get reduced competition.

So while losing a job sucks, quit thinking of the short term. For the long term health of our profession, we need airlines that are having liquidity issues right now to go by the wayside so these pilots can come back to a profession that pays what it should....

 

[DeucesWild]

we need airlines that are having liquidity issues right now to go by the wayside

Uhhh, that would mean everyone but Southwest would go by the wayside. That would be a wonderful industry wouldn't it? Does Southwest go to Fargo??

 

[greenbayfan]

Uhhh, that would mean everyone but Southwest would go by the wayside. That would be a wonderful industry wouldn't it? Does Southwest go to Fargo??

I said liquidity issues my man! i.e. those in BK are there not because they are losing money, but because their losses compared with their cash position have forced them into that postion.

 

[stratus72]

"Has anyone stopped to think about what those "certain other conditions" might be. If this gets past the BK court, the company is going to come a 'knocking" for some more concessions."

You bet they are....and that's the $75 million question. This DIP deal could significantly alter F9. SM already stated that the makeup of the BOD will change. Holding onto our contract will be paramount. The "good will" of the employee groups can only go so far even amongst the thirstiest of Kool-Aid drinkers.[/quote



I knew it was coming, but you did call it. We learned of this through the local newspaper and not our Union or management. Again, no suprise but an official announcement of these talks would have been nice.

Frontier loan spurs union talks
More cost cuts
By Greg Griffin
The Denver Post
Article Last Updated: 07/28/2008 11:13:10 PM MDT



var requestedWidth = 0;
if(requestedWidth > 0){ document.getElementById('articleViewerGroup').style.width = requestedWidth + "px"; document.getElementById('articleViewerGroup').style.margin = "0px 0px 10px 10px"; }
Frontier Airlines has begun contract negotiations with unions representing its pilots and mechanics, a requirement of its new $75 million loan, the company said Monday.
"We're going back and talking to all of the unions again with regards to the Perseus deal," Frontier spokesman Steve Snyder said. "We've started talking with them about specifics."
Perseus LLC, a Washington-based private-equity firm with an Evergreen office, agreed Friday to lend bankrupt Frontier $75 million in two installments in return for a future equity stake.
To receive the second installment, Frontier must obtain from the pilots and mechanics "new or revised collective bargaining agreements or amendments . . . containing concessions necessary to meet labor cost reductions."
The pilots and mechanics unions agreed to temporary wage and benefit reductions in May. The pilots' pay cut was 14.5 percent.
It's not clear if Frontier seeks to make those reductions permanent or whether it wants additional concessions.
Local leaders of the Frontier Airlines Pilots Association and the International Brotherhood of Teamsters Union could not be reached for comment Monday.
Frontier has about 700 pilots and 430 mechanics and related employees. But the airline is laying off about 150 pilots and about 50 mechanics and related workers among its 600 announced job cuts.
Under the agreement with Perseus, Frontier will receive $40 million next month. Perseus will supply the remaining $35 million no later than Nov. 15 if new contracts are reached. Frontier must pay annual interest of 16.5 percent on the loan.
The deal requires Frontier to cut costs to meet Perseus' monthly operational cash-flow targets over the next year. Frontier must be cash-flow-positive each month except November and December.
Perseus' definition of cash flow includes net income before interest, taxes, depreciation, amortization and other one-time, nonoperational gains and charges such as Chapter 11 restructuring costs. Perseus also requires Frontier to have at least $90 million in cash reserves before it receives the $35 million.
At the end of May, the most recent month for which Frontier has reported financial results, the company had $110 million in cash.
The carrier lost $38 million in April and May, as fuel prices hit record highs. Frontier chief executive Sean Menke said Friday that June results were "greatly improved" because of cost reductions made since Frontier entered Chapter 11 in April.
Menke estimated Frontier's cost savings at $40 million to $50 million this year. Greg Griffin: 303-954-1241 or [email protected]

 

[Toobdrvr]

"So while losing a job sucks, quit thinking of the short term. For the long term health of our profession, we need airlines that are having liquidity issues right now to go by the wayside so these pilots can come back to a profession that pays what it should...."

So, once again, who do you work for? Let's put it on the record...

 

[ultrarunner]

I would have to agree with Toobdrvr. The excess capacity in our system right now is deplorable. Looking at it from strictly a profitable angle, the BEST thing that could happen in our airline industry right now would be the parking of a thousand or so airframes.

I think this will happen. Airlines will realize that oil is NOT going to came back down anytime soon, and airframes will start to get parked at a much faster rate than has already been announced.

The sooner the supply and demand shifts, the better.

Obviously this will result is those drunk ho's not getting on board, as well as the Clampets and their out of control kids...but that's ok...no one's gonna loose sleep over a general cleansing of the airlines.

 

[stratus72]

....no one's gonna loose sleep over a general cleansing of the airlines."

Except for the thousands of furloughed pilots on the streets. However, I do see your point.

 

[greenbayfan]

"So while losing a job sucks, quit thinking of the short term. For the long term health of our profession, we need airlines that are having liquidity issues right now to go by the wayside so these pilots can come back to a profession that pays what it should...."

So, once again, who do you work for? Let's put it on the record...

Why does who I work for matter?

 

[Toobdrvr]

Why does who I work for matter?

So when it's YOUR head on the chopping block, we'll see how strong your convictions really are...

btw: Ultrarunner: You weren't agreeing with me, you were agreeing with greenbayfan, whom I was quoting (in a ghetto sorta way). I for one am not for a general "cleansing" of the airline industry.

 

[greenbayfan]

So when it's YOUR head on the chopping block, we'll see how strong your convictions really are...

btw: Ultrarunner: You weren't agreeing with me, you were agreeing with greenbayfan, whom I was quoting (in a ghetto sorta way). I for one am not for a general "cleansing" of the airline industry.

I've been with an airline that asked for paycuts with the promise of growth and more aircraft, never got said aircraft (pilots gave in), months later asked for more paycuts to "stay out of BK" (pilots gave in), went into BK months later, started laying off pilots, got DIP financing with stipulations on more employee paycuts (pilots gave in), got layed off myself, and had to go into a new field of work for 18 months until that field of work got bad too only to get rehired by another airline .....so I think I know a lot about what the Frontier pilots are going through, that's why I can honestly say that the pilots at Frontier are better off without Frontier....

 

[Newf Dog]

quote from greenbayfan:

...."so I think I know a lot about what the Frontier pilots are going through, that's why I can honestly say that the pilots at Frontier are better off without Frontier...."

Bitter???????

Been there done that too. Maybe we were at the same place. Same song and dance. So I understand where you're coming from on that one. Surprised????

Here's the difference: Frontier is now and has been an awesome place to work. The "whole different animal" thing....it's true. You gotta live it to understand it. The question then is will it continue to be so in the future???

We're going to find out the answer very soon. To the extent that we have any control we will determine our own fate thank you very much. If we degenerate into the same song and dance routine as everyone else then you won't have to worry about it....we will implode. We may not negotiate the big deals but we've carried this company on our backs for a long time. They lose the employees............they lose the airline. It's a surprisingly simple equation.

 

[greenbayfan]

Frontier is now and has been an awesome place to work. The "whole different animal" thing....it's true. You gotta live it to understand it.

Maybe, I have to take your word for it, but the bottom line is that our profession needs an overhaul, and unfortnately the only way that is going to happen is for there to be less competition. It's survival of the fittest at this point, and while Frontier may be a a "whole different animal", my only point is that the animal is better off dead at this point, because survival is slim under the current conditions. But again, time will tell. I just would like to see the pilot profession pay what it should, not be held hostage by $89 fares....

 

[Toobdrvr]

Some valid points to be sure. I even agree with some of your statements.

However, you still haven't answered my question. It's ok, I don't expect you to at this point.

Good day.

 

[Wino]

Toobdrvr,

Trying to out someone (tell you which airline he works for, who he is etc) serves no point here except to threaten a person's job.

Its actually a pretty low class question somewhat akin to a mobster threatening to break someone's legs.

As far as the thread goes. DIP financing is good for the employees of Frontier. Congrats to them. It is, however, a disaster for the rest of the industry.

1st, it preserves a lower paid contract for pilots, which will be used by every other management as a "See we need that to be competitive".

2nd, the fact that such a no hope case as F9 got DIP means that other managments don't need to be afraid of not getting DIP in their considerations before entering bankruptcy simply to break contracts.


SO its a VERY dark day for the rest of the industry.



Cheers
Wino

 

[greenbayfan]

Some valid points to be sure. I even agree with some of your statements.

However, you still haven't answered my question. It's ok, I don't expect you to at this point.

Good day.

I'm still not sure why you think who my employer is matters to this conversation. I am speaking from experience as a previously furloughed pilot that worked for a company in BK who needed DIP financing to continue, that is all that is germain to this thread.

I simply want our profession to get back to being fairly compensated, bottom line. Just like the airline that had furloughed me, Frontier is attempting to survive, I get that, but for the betterment of the industry as a whole, it is my belief the contraction of the airline industry is what is ultimately needed for our profession. So while some on this thread have extended congratulations on this new financing, I can't honestly say the same, because I believe the extinguishing of Frontier is best for our profession as a whole.

 

[RedDogC130]

read on another forum today that there was a deal this morning to sell an additional 6 a/c to some russian airline. Any truth to this?

 

[RedDogC130]

nevermind found it. here is the link

http://www.foxbusiness.com/story/ma...nes-secures-commitments-additional-liquidity/

 

[pipejockey]

To receive the second installment, Frontier must obtain from the pilots and mechanics "new or revised collective bargaining agreements or amendments . . . containing concessions necessary to meet labor cost reductions."
The pilots and mechanics unions agreed to temporary wage and benefit reductions in May. The pilots' pay cut was 14.5 percent.
It's not clear if Frontier seeks to make those reductions permanent or whether it wants additional concessions.

Pilots have to be about the dumbest sob's on the planet!! Balls the size of peas as usual. When have wage concessions ever saved an airline? They only put off the inevitable! If an airline isn't going to make it, the pilots could work for free and the airline will ultimately fail. So I wonder how much this perseus LLC thinks a pilot is worth, because frontiers pay rates are not even within the realm of stellar! I can't believe you all would even accept less.

Local leaders of the Frontier Airlines Pilots Association and the International Brotherhood of Teamsters Union could not be reached for comment Monday.

Of course they couldn't! They are an airline pilot labor union, all they are doing now is cowering from management, and at the very least, minimizing the damage the senior pilots will have to endure. This is merely labor union 101.

 

[Newf Dog]

deleted