When will Frontier Exit Bankruptcy?

[HDA]

"I have known Daniel for several years; he will be a tremendous asset to our executive team," said Frontier President and CEO Sean Menke. "We are operating in an extremely competitive market and in an economy that has seen revenue declines across our industry. We will count on Daniel's experience and deep knowledge of the airline industry to develop the strategic and innovative revenue initiatives and alliances that will position Frontier for the significant growth that lies ahead."



What significant growth that lies ahead? Anyone care to speculate?

 

[labbats]

Trusting a management quote is a poor idea. Everything is roses all the time.

 

[HDA]

Trusting a management quote is a poor idea. Everything is roses all the time.

True that!

 

[9rj9]

Sold !!!!

Good luck with Republic.

 

[pa31capt]

http://finance.yahoo.com/news/Frontier-Airlines-Holdings-prnews-1691737264.html?x=0&.v=1

looks like soon

 

[StaySeated]

Pretty much the worst case scenario, short of liquidation. "Unlimited Scope Relief" will mean that virtually every FO currently on the F9 list will remain an FO forever. Expect to see a bunch of Frontier EMB 190's flying around, with republic pilots at the flight controls.

Sad day for Frontier.

 

[Eagle757shark]

Frontier Airlines Holdings, Inc. Reaches Investment Agreement With Republic Airways Holdings, Files Plan of Reorganization

• Press Release
• Source: Frontier Airlines Holdings, Inc.
• On Monday June 22, 2009, 5:54 pm EDT

Republic Agrees to Serve as Equity Sponsor for Frontier's Emergence from Bankruptcy
Plan Provides for Frontier and Lynx to Maintain Normal Operations as Subsidiary of Republic
DENVER, June 22 /PRNewswire-FirstCall/ --Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ - News) today announced it has entered into an investment agreement with Republic Airways Holdings, Inc. (Nasdaq: RJET - News) by which Republic will serve as equity sponsor for Frontier's plan of reorganization and purchase 100% of the equity in the reorganized company for $108.75 million. The plan sponsorship agreement is subject to bankruptcy court approval and various conditions.
If the plan of reorganization is approved and implemented as proposed, upon its emergence from Chapter 11, Frontier Airlines Holdings would become a wholly owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. Frontier Airlines and Lynx Aviation would maintain their current names and continue to operate as usual.
"This agreement represents a major milestone in our ongoing efforts to position Frontier to emerge from bankruptcy as a competitive, sustainable airline," said Sean Menke, Frontier President and Chief Executive Officer. "Through our reorganization process, we have transformed Frontier Airlines and Lynx Aviation into two of the most efficient operating carriers in North America. Additionally, we diversified our revenue generation through the introduction of ancillary charges and our branded 'AirFairs' product. The culmination of all this extraordinary work is that, even in the worst economic environment in the last 50 years, the company has posted an operating profit for each of the past six months and a net profit for the past two quarters."
Menke continued, "I would be absolutely remiss not to thank the thousands of Frontier and Lynx employees, and their families, for their sacrifice and dedication during these extraordinary times. They are truly the heart and soul of the company. We are pleased that this agreement allows our customers and communities to continue to receive the outstanding service for which Frontier is known, while preserving the jobs of most Frontier employees."
"We commend Frontier and its employees for their hard work and accomplishments during this difficult restructuring period," said Bryan Bedford, chairman, president and CEO of Republic Airways. "We believe this agreement represents a new beginning for Frontier, positioning it to build on its recent successes and strengthen the Frontier brand for the benefit of employees and the customers and communities it serves."
Frontier today filed its proposed plan of reorganization and a related disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York. Frontier also filed a motion to approve the investment agreement with Republic, subject to higher and better proposals under a court-supervised auction. Frontier will seek court approval of the investment agreement and proposed auction procedures at a hearing scheduled for July 13, 2009. Frontier currently expects to conclude the auction process and emerge from Chapter 11 by autumn 2009.
In March 2009, Frontier received a firm commitment for $40 million in post-petition debtor-in-possession (DIP) financing from Republic Airways Holdings to support Frontier's additional working capital needs and refinance its expiring DIP loan, increasing the available financing and preserving Frontier's financial stability. As a condition to the loan, Frontier agreed to allow Republic's damage claim in the amount of $150 million arising out of Frontier's rejection of its airline services agreement with Republic.
The proposed plan of reorganization provides for general unsecured creditors to receive $28.75 million in cash. An additional $40 million of the sale proceeds would be applied as repayment of the outstanding DIP loan. If the plan is implemented as proposed, the company's current equity would be extinguished and holders of that equity would not receive any recovery.
Frontier and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008. More information about Frontier's Chapter 11 proceedings is available at FrontierAirlines.com/restructure. Court filings and claims information are available at frontier-restructuring.com. Frontier's principal bankruptcy counsel is Davis Polk & Wardwell.
About Republic Airways Holdings
Republic Airways Holdings, based in Indianapolis, Indiana, is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on approximately 1,200 flights daily to 99 cities in 34 states, Canada, Mexico and Jamaica through airline services agreements with six U.S. airlines. All of the airlines' flights are operated under their airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, Midwest Connect, United Express and US Airways Express. The airlines currently employ approximately 4,400 aviation professionals and operate 235 regional jets.
About Frontier Airlines Holdings, Inc.
Frontier Airlines Holdings, Inc. is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. Frontier Airlines' mainline operations offer 24 channels of DIRECTV® service in every seatback along with a comfortable all-coach configuration. In conjunction with a fleet of ten Bombardier Q400 aircraft operated by Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.), Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. In November 2006, Frontier and AirTran announced a first-of-its-kind integrated marketing partnership that offers travelers the ability to reach more than 80 destinations across four countries with low fares aboard two of the youngest fleets in the industry. For more in-depth information on Frontier Airlines, please visit its Web site at FrontierAirlines.com.

 

[rtmcfi]

The integration should be fun to watch.

 

[StaySeated]

Supposedly no integration. F9 will remain totally fenced off while republic/chataqua/insert other republic WO's here begin to fly dozens of shiny new EMB 190's all of the country.

sigh...

 

[Shrek]

I am speechless.......
I'm sorry......

 

[Fubijaakr]

Yep. Ask 400 Midwest pilots how the RAH deal works. Better polish up those resumes F9ers.

 

[FastJP4]

Sad day for what used to be a fantastic airline. Now what - A320 FO's at 23.00/hr? This industry is toast.

 

[Axel]

Supposedly no integration. F9 will remain totally fenced off while republic/chataqua/insert other republic WO's here begin to fly dozens of shiny new EMB 190's all of the country.

sigh...

RAH scope clause:

1.D. Scope
1. This Agreement covers the company, any subsidiary of the
company, the company’s parent, any subsidiary of the
company’s parent and any future airline certificate(s) created as
a subsidiary of the company or subsidiary of the company’s
parent.
2. Except as otherwise provided in this Agreement, all present and
future flying (including that international flying which originates
or terminates within the United States or its possessions) and all
charters, ferry flights (not including ferry flights of newlyacquired
aircraft prior to being placed in revenue service),
training flights, test flights, (except test flights assigned to
management), or other utilization of aircraft owned or leased by
the company, the company’s parent or any subsidiary of the
company or subsidiary of the company’s parent shall be
performed by pilots on the Chautauqua Airlines Pilots’ System
Seniority List in accordance with the terms and conditions of this
Agreement or any other applicable agreement between the
company, the company’s parent or any subsidiary of the
company’s parent and the International Brotherhood of
Teamsters, Airline Division.
3. The Company, Subsidiary of the Company, the Company’s
Parent or Subsidiary of the Parent shall not establish any new
airline (alter ego or otherwise) or acquire a controlling interest in
any carrier whether directly or through the Parent or another
Subsidiary of the Parent, and maintain it as a separate carrier.
A “Controlling Interest” or “Control” means the ownership of an
equity interest representing more than fifty percent (50%) of the
outstanding capital stock of an entity or voting securities
representing more than fifty percent (50%) of the total voting
power of outstanding securities then entitled to vote generally in
the election of such entity’s board of directors or other governing
body.
4. The Company will not transfer aircraft, or operating authority to
its Parent, a Subsidiary of the Parent, or to a Subsidiary of the
Company for the purpose of evading the terms of this
Agreement. The Company will also not establish a third party
leasing device to evade the terms of this agreement.

 

[Baronman]

You know a bad day is a 'comin at your airline when Brian Bedford is seen in the building.

 

[Superpilot92]

i see the mainline partners dropping chauttleublic asap and not supllimenting a direct competetor after this is done. Especially when they will be using the majors own cash to keep ticket prices low.

With SWA going into MKE and DEN i see this turning into Indy Air II unfortunatly. Especially once the F9 guys realize they may have to integrate with a regional.

 

[StaySeated]

RAH scope clause:

1.D. Scope
1. This Agreement covers the company, any subsidiary of the
company, the company’s parent, any subsidiary of the
company’s parent and any future airline certificate(s) created as
a subsidiary of the company or subsidiary of the company’s
parent.
2. Except as otherwise provided in this Agreement, all present and
future flying (including that international flying which originates
or terminates within the United States or its possessions) and all
charters, ferry flights (not including ferry flights of newlyacquired
aircraft prior to being placed in revenue service),
training flights, test flights, (except test flights assigned to
management), or other utilization of aircraft owned or leased by
the company, the company’s parent or any subsidiary of the
company or subsidiary of the company’s parent shall be
performed by pilots on the Chautauqua Airlines Pilots’ System
Seniority List in accordance with the terms and conditions of this
Agreement or any other applicable agreement between the
company, the company’s parent or any subsidiary of the
company’s parent and the International Brotherhood of
Teamsters, Airline Division.
3. The Company, Subsidiary of the Company, the Company’s
Parent or Subsidiary of the Parent shall not establish any new
airline (alter ego or otherwise) or acquire a controlling interest in
any carrier whether directly or through the Parent or another
Subsidiary of the Parent, and maintain it as a separate carrier.
A “Controlling Interest” or “Control” means the ownership of an
equity interest representing more than fifty percent (50%) of the
outstanding capital stock of an entity or voting securities
representing more than fifty percent (50%) of the total voting
power of outstanding securities then entitled to vote generally in
the election of such entity’s board of directors or other governing
body.
4. The Company will not transfer aircraft, or operating authority to
its Parent, a Subsidiary of the Parent, or to a Subsidiary of the
Company for the purpose of evading the terms of this
Agreement. The Company will also not establish a third party
leasing device to evade the terms of this agreement.

I am aware of the existence of that CBA language. I have a few questions about the language itself and the pilots working under that CBA.

Who is defined, in the CBA, as the company?
Who is defined, in the CBA, as the parent?

Will the Chataqua guys demand today that the F9 guys get integrated (forget about how the SLI will take place for now) or will they remain quiet until after the deal is done to raise their grievance?

I would be amazed if no one else threw a bid into this mix. If you look at what Republic is getting and the price that they are paying it is the deal of the century.

Republic buys F9 in the form of $108MM in exit financing.

Republic gets their $40 MM loan repaid immediately.

Republic gets 7-9% of their $150 MM unsecured claim ($10.5-$13.5)

Republic gets untold millions in from First Data that is currently being held as unrestricted cash due to F9's low cash balance sheet.

So for around $50 MM (108-40-10), republic just purchased a billion dollar a year organization. They could possible walk away from the "closing" with cash in their pocket if First Data gets thrown to the curb, which is the most likely scenario. First Data currently has over $150MM in F9 credit card hold back.

Nicely plaid.

 

[huncowboy]

i see the mainline partners dropping chauttleublic asap and not supllimenting a direct competetor

Like they can do that overnight right? No contracts to worry about, etc.

BB wanted to own a real airline. Now he did it. He had to make that move rather sooner than later because the regional jet flying is history especially 50 seats and less. RAH could have not hoped for more codeshare flying. I think this fall many regionals will face reduction in flying that will not come back next Spring. He had to make a move or else he could have watched his company shrink into a dot over the coming years. This guy is brilliant, unfortunately he is a menace to our industry.

Sorry for the F9 FOs. My guess is relative seniority at best which is a disaster. I still remember some of my former CAs at RAH who went on to F9. This is a sad and scary moment for all of us who have managed to move on from RAH.

 

[Axel]

I am aware of the existence of that CBA language. I have a few questions about the language itself and the pilots working under that CBA.

Who is defined, in the CBA, as the company?
Who is defined, in the CBA, as the parent?

L. Definitions used in Article 1
“Company” means Chautauqua Airlines, Inc. or any other Subsidiary of
the Parent or any future airline certificate created or acquired as a
Subsidiary of the Parent.
“Entity” means a natural person, corporation, association, partnership,
trust or any other form for conducting business.
“Parent” means Republic Airways Holdings, Inc. or any successor of the
Parent.
“Subsidiary” means any entity that is controlled by the Company or the
Parent as defined above, herein.

Will the Chataqua guys demand today that the F9 guys get integrated (forget about how the SLI will take place for now) or will they remain quiet until after the deal is done to raise their grievance?

Good question. The union representation is in some turmoil due to the trusteeship imposed by the IBT international on the Local 747. This will certainly test the mettle of the new leadership as well as the RAH pilot group.

 

[johnsonrod]

So would there now be a flow-up and flowback to Frontier from RAH and vice versa? What about the Lynx pilots? I would bet that a senior RAH E170 driver would love to get his hands on a Bus sidestick...

Oh boy... This is gonna get messy.... And no doubt UAL wouldn't want to work with a competitor out of DEN. Perhaps this indicates RAH has little confidence in UAL's ability to survive going forward and it wants to better control its own destiny...

 

[CrownandCoke]

any speculation on the future of Lynx?