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



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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.