McCaskill-Bond Seniority Integration Legislation

[FDJ2]

Just remember that SWA can run this deal like ATA if there is no "agreement".

Frontier is not ATA and Frontiers stand alone performance has been fine. They also have a new PWA which was signed by the bankruptcy judge as part of their plan of reorganization and firm commitments for financing. If SWA wants Frontier, SWA will have to make a competitive offer. This isn't a Chapter 7 fire sale.

Jan 28, 2009
Frontier Ends 2008 With Strong Financial Performance

Feb 26, 2009
Frontier Airlines Shows Operating Profit for January 2009

Mar 5, 2009
Frontier Airlines Receives Commitment for Debtor in Possession Financing

Mar 24, 2009
Frontier Airlines Reports Fourth Straight Monthly Operating Profit

Apr 28, 2009
Frontier Airlines Reports Fifth Consecutive Monthly Operating Profit

May 28, 2009
Frontier Airlines Begins New Fiscal Year With $2.4 Million Net Profit in April

Jun 25, 2009
Frontier Airlines Reports May Net Profit of $1.1 Million

 

[PCL_128]

It is a purchase. Of course it will be over 50%. How else would SWA own it if it were less. It would be a merger if they combined the airlines into one operation. That is not what it is at this time. Delta and NW was a merger. This is a purchase.

FAPA scope language requires an integration if any sort of "pooling of assets" is utilized, meaning SWA could not use any of the F9's gates, slots, planes, employees, etc... without carrying through with a merger.

 

[Cometman]

If more than 50% of Frontier's assets are purchased, then it's considered a merger under this legislation.

Here is how they describe the transaction under the law4) COVERED TRANSACTION- The term `covered transaction' means--

• (A) a transaction for the combination of multiple air carriers into a single air carrier; and which
  (B) involves the transfer of ownership or control of--
  • (i) 50 percent or more of the equity securities (as defined in section 101 of title 11, United States Code) of an air carrier; or
    (ii) 50 percent or more (by value) of the assets of the air carrier.

If you read (A) it says AND. That means if the transaction is a combination of MUTIPLE air carriers into a single air carrier AND 50% or more of the assets.

SWA might buy more than 50% but they are not combining multiple air carriers. Now, Delta and Northwest did. SWA will operate F9 as a seperate airline until they take everything they want and there is nothing left. Remember, they are buying F9 for what ever reason. They can do what they want.

SWA is willing to give F9 a list of things to get them to agree because SWA doesn't want to continue with the bidding if there could be a fight.

Staple, pay freeze, freeze on Denver Base. Maybe a little more incentive.

This could be the most serious decision F9 pilots make in their career. They might only get one chance.

 

[FDJ2]

It is a purchase. Of course it will be over 50%. How else would SWA own it if it were less. It would be a merger if they combined the airlines into one operation. That is not what it is at this time. Delta and NW was a merger. This is a purchase.

Technically DAL acquired NWA and NWA is currently a wholly owned subsidiary of Delta Air Lines, but that doesn't matter, because the nature of the corporate transaction is not relevant and likewise it doesn't matter if SWA purchases Frontier or mergers with Frontier, what matters is if SWA gains control of Frontier. At that point the McCaskill-Bond Legislation will likely kick in.

 

[PCL_128]

Here is how they describe the transaction under the law4) COVERED TRANSACTION- The term `covered transaction' means--

• (A) a transaction for the combination of multiple air carriers into a single air carrier; and which
  (B) involves the transfer of ownership or control of--
  • (i) 50 percent or more of the equity securities (as defined in section 101 of title 11, United States Code) of an air carrier; or
    (ii) 50 percent or more (by value) of the assets of the air carrier.

If you read (A) it says AND. That means if the transaction is a combination of MUTIPLE air carriers into a single air carrier AND 50% or more of the assets.

SWA might buy more than 50% but they are not combining multiple air carriers. Now, Delta and Northwest did. SWA will operate F9 as a seperate airline until they take everything they want and there is nothing left. Remember, they are buying F9 for what ever reason. They can do what they want.

SWA is willing to give F9 a list of things to get them to agree because SWA doesn't want to continue with the bidding if there could be a fight.

Staple, pay freeze, freeze on Denver Base. Maybe a little more incentive.

This could be the most serious decision F9 pilots make in their career. They might only get one chance.

You're not paying attention to the FAPA scope language. It's a factor in this transaction. You can't transfer any of the F9's assets to SWA without triggering the scope provisions of Section 1 of their contract. That trigger will require an integration, and that triggers Bond-McKaskill

 

[gt1900]

Are Skywest and ASA under 1 seniority list?

 

[Cometman]

Technically DAL acquired NWA and NWA is currently a wholly owned subsidiary of Delta Air Lines, but that doesn't matter, because the nature of the corporate transaction is not relevant and likewise it doesn't matter if SWA purchases Frontier or mergers with Frontier, what matters is if SWA gains control of Frontier. At that point the McCaskill-Bond Legislation will likely kick in.

What would happen if they kept F9 as a seperate airline. Assuming it did not violate SWAPA. Would they have to combine the list? I do not believe they have one list with Lynx. And that brings up another question. According to your theory Lynx would also have to be included.

 

[FDJ2]

SWA might buy more than 50% but they are not combining multiple air carriers. Now, Delta and Northwest did. SWA will operate F9 as a seperate airline until they take everything they want and there is nothing left. Remember, they are buying F9 for what ever reason. They can do what they want.

SWA might think they can do whatever they want, but the fact is that they can't. Frontier has had solid financial performance this year, they have firm commitments for financing, the bankruptcy judge recently approved a new PWA which has successorship protections requiring seniority integration in the event of an acquisition similar to what SWA is proposing. I know the SWA pilots hope they can strong arm the Frontier pilots like the APA did to the TWA pilots, but this is a whole different ball game and the new legislation was written specifically to prevent that from occurring.

 

[Cometman]

SWA might think they can do whatever they want, but the fact is that they can't. Frontier has had solid financial performance this year, they have firm commitments for financing, the bankruptcy judge recently approved a new PWA which has successorship protections requiring seniority integration in the event of an acquisition similar to what SWA is proposing. I know the SWA pilots hope they can strong arm the Frontier pilots like the APA did to the TWA pilots, but this is a whole different ball game and the new legislation was written specifically to prevent that from occurring.

Wishful thinking but you did not answer the questions I wrote.

 

[FDJ2]

What would happen if they kept F9 as a seperate airline. Assuming it did not violate SWAPA. Would they have to combine the list? I do not believe they have one list with Lynx. And that brings up another question. According to your theory Lynx would also have to be included.

It would depend on the PWA's of the pilot groups involved. FAPA has a PWA, it's been recently approved by the judge and is a part of Frontiers plan of reorganization. It has successorship protections.

I think folks need to remember that Frontier is not in Chapter 7. They seem to be doing well in reorganization and they've been posting good financial results. This isn't a fire sale like ATA and this legislation was written specifically to preclude another AA/TWA integration where an employee group is denied their right to a fair integration if their airline is acquired.

All of this may mean that SWA may back out of this deal, but I think if they are serious about it and they truly want Frontiers assets, they'll have to play nice in the sand box.