Southwest may make a bid for Frontier
08-02-2009, 05:56 PM
#241
Gets Weekends Off
Joined APC: May 2008
Posts: 879
Originally Posted by Navy8n
I'm sorry for the fact that your company could not make your product profitable.
November 2008 $2.5 million
December 2008 - $18.9 million
January 2009 - $2.8 million
February 2009 - $1.5 million
March 2009 - $15.7 million
April 2009 - $5.0 million
May 2009 - $11.7 million
June 2009 - $14.2 million
08-02-2009, 06:07 PM
#242
Gets Weekends Off
Joined APC: Jul 2007
Position: B737 /FO
Posts: 345
Originally Posted by thepilotswife
That is NOT why F9 is in bankruptcy.
Research a company that has gone bankrupt. Note any reference to cash flows preceding the bankruptcy announcement. If possible, review the cash flow statements for a period and comment on the direction of operating cash flows.
Notice it does not ask for reasons WHY it went bankrupt...just note and comment on cash flows. Fairly simple.
Here is what I wrote:
April 10th 2008, Frontier Airlines filed for bankruptcy under chapter 11. According to MSNBC news article, it blamed the cash squeeze on its credit card processing company (First Data Corp) keeping a larger chunk of its ticket revenue in which it would have been responsible for ticket refunds in the event Frontier suspended service. The practice is known as holdback. The company keeps a percentage of the ticket revenue until passengers complete their flights. Frontier even noted that the practice was a primary reason for bankruptcy in their annual report.
This action was simply an increase the companies deferred revenue (a liability) which did not account for all the cash restrictions the company showed in its financial statements. However, it may have just added to a multitude of reasons.
Total fuel cost also rose by 33% versus an increase of passenger sales of only 20%. The fuel cost rise was by the sharpest of the operating cost. Frontier blames inability to increase fairs due to a shrinking market and competition to offset these cost.
Capital expenditures jumped from $74,262,000 in 2006 to $137,324,000 in 2007, to $350,844,000 in 2008. The difference in these expenditures would have more than made up for the $82 million in lose of cash for 2008. These capital expenditures could have been attributed to an increase in spare parts and seat replacements. Nothing in the notes indicated acquiring new aircraft. In fact, these notes indicate the sale of aircraft.
I am not convinced of the argument made by Frontier that the holdback practice sent them into bankruptcy. The largest expenditure was the capital expenditure which did not include appreciable acquisitions, but improvements in current aircraft. The same notes also implied a restructuring of the depreciation schedule of its aircraft. It seems to be beefing up its current property and equipment value while extended the depreciation schedule.
According to Yahoo finance, RAH has put an offer in to buy Frontier.
Yahoo Finance article Republic offers to buy Frontier for $108.8 million - Yahoo! Finance
MSNBC Frontier article Frontier Airlines files for bankruptcy - Aviation- msnbc.com
SEC annual report, 2008 http://www.frontierairlines.com/secf.../10k063008.pdf
ALL Frontier financial statement links SEC Filings - Frontier Airlines
This action was simply an increase the companies deferred revenue (a liability) which did not account for all the cash restrictions the company showed in its financial statements. However, it may have just added to a multitude of reasons.
Total fuel cost also rose by 33% versus an increase of passenger sales of only 20%. The fuel cost rise was by the sharpest of the operating cost. Frontier blames inability to increase fairs due to a shrinking market and competition to offset these cost.
Capital expenditures jumped from $74,262,000 in 2006 to $137,324,000 in 2007, to $350,844,000 in 2008. The difference in these expenditures would have more than made up for the $82 million in lose of cash for 2008. These capital expenditures could have been attributed to an increase in spare parts and seat replacements. Nothing in the notes indicated acquiring new aircraft. In fact, these notes indicate the sale of aircraft.
I am not convinced of the argument made by Frontier that the holdback practice sent them into bankruptcy. The largest expenditure was the capital expenditure which did not include appreciable acquisitions, but improvements in current aircraft. The same notes also implied a restructuring of the depreciation schedule of its aircraft. It seems to be beefing up its current property and equipment value while extended the depreciation schedule.
According to Yahoo finance, RAH has put an offer in to buy Frontier.
Yahoo Finance article Republic offers to buy Frontier for $108.8 million - Yahoo! Finance
MSNBC Frontier article Frontier Airlines files for bankruptcy - Aviation- msnbc.com
SEC annual report, 2008 http://www.frontierairlines.com/secf.../10k063008.pdf
ALL Frontier financial statement links SEC Filings - Frontier Airlines
The $82million in lose of cash was from its statements of cash flows. The actual operating profit is important, but cash is what matters.
08-02-2009, 06:07 PM
#243
AAmerican Way for AA Pay
Joined APC: Oct 2005
Position: B-737 Pilot
Posts: 1,617
Blackmail Delivery
Originally Posted by FAULTPUSH
WRT any comparison between F9 and Muse Air or Morris Air or ATA, the Bond-McCaskill legislation makes that all moot. The law has change since those other scenarios, and WN has to work within the new rules.
08-02-2009, 06:18 PM
#245
Gets Weekends Off
Joined APC: May 2008
Posts: 879
Originally Posted by B757200ER
Don't forget---SWA could just put a gun to F9 employees' heads and threaten to walk away from a deal to buy F9
Originally Posted by F9er
To look at it with someone who has less than 3 yrs seniority at F9....
a. Possible ERJ captain
b. more money, staple at SWA
Hmmmm......
a. Possible ERJ captain
b. more money, staple at SWA
Hmmmm......
b. Staple, and potential for subsequent furlough at WN.
Hmmmm....
08-02-2009, 06:34 PM
#246
Line Holder
Joined APC: Jul 2008
Posts: 56
Originally Posted by FastDEW
Would you really want to "take a chance" with Republic? That seems like Russian Roulette to me. I have NO stake in this, I am flying charters for rich guys, but I would hate to see anyone end up with Republic and spend the next part of there life watching their pay go down, down, down.........
I'm just sort of bitter because I feel like IF the F9 pilots allow themselves to be stapled to the bottom they are just handing Denver to SWA (where they don't seem to be profitable and are having a harder time competing here than they probably thought).
I would rather take a chance that Frontier can remain its own airline than not.
I understand why jr FOs at F9 would think it is a great deal to be stapled at the bottom but it is not such a great deal for those that have been at F9 a long time.
I can only dream that an independent investor will come through tomorrow and save us!
08-02-2009, 06:50 PM
#248
Gets Weekends Off
Joined APC: Aug 2008
Position: 777 Left
Posts: 347
Originally Posted by thepilotswife
We don't know that the pilots would take a pay cut at Republic. We don't know a lot. They very well could run Frontier as is and continue to grow them and compete against SWA.
I'm just sort of bitter because I feel like IF the F9 pilots allow themselves to be stapled to the bottom they are just handing Denver to SWA (where they don't seem to be profitable and are having a harder time competing here than they probably thought).
I would rather take a chance that Frontier can remain its own airline than not.
I understand why jr FOs at F9 would think it is a great deal to be stapled at the bottom but it is not such a great deal for those that have been at F9 a long time.
I can only dream that an independent investor will come through tomorrow and save us!
I'm just sort of bitter because I feel like IF the F9 pilots allow themselves to be stapled to the bottom they are just handing Denver to SWA (where they don't seem to be profitable and are having a harder time competing here than they probably thought).
I would rather take a chance that Frontier can remain its own airline than not.
I understand why jr FOs at F9 would think it is a great deal to be stapled at the bottom but it is not such a great deal for those that have been at F9 a long time.
I can only dream that an independent investor will come through tomorrow and save us!
However, if you look at the historical data on Bedford and Republic, it doesn't look good to keep a real paycheck coming for too long. I fly the 320 internationally and could not imaging flying it for $39/hr which is what Bedford would do if given the chance. I like the F9 brand and would like to see it stay and grow, but not at the cost of the pilots pay. If Republic can drive down the pay for Bus captains, then we all suffer in the long run.
On the other hand, the SWA guys are paid better. I know they are staffed heavily right now, but the economy will recover and SWA is a better bet long term. At least I think so.
My prayers are with all the F9's for the best outcome. A lot coming at you with little information...... All the best.
08-02-2009, 07:46 PM
#249
On Reserve
Joined APC: Aug 2009
Posts: 20
Lets not forget the reason F9 is making money is they are IN BANKRUPTCY. If they were really MAKING MONEY you would have investors lining up. I to will welcome F9 pilots here but will not accept any loss of seniority of my fellow WN pilots. IF you think being on the bottom of our list with pay protection is bad good luck at Republic. To the Pilots wife, I sure would like to meet your husband. It sounds like you are willing to negotiate his career away with one of the most respected airlines in the world. Good Luck!
08-02-2009, 08:15 PM
#250
Gets Weekends Off
Joined APC: Apr 2005
Position: 737 F/O
Posts: 500
Originally Posted by thepilotswife
I would rather take a chance that Frontier can remain its own airline than not.
Food for thought.........
Frontier tried it before and went under.
Frontier II is in Bankruptcy.
If Frontier was such a lucrative Enterprise, investors would be lined up around the block.
Frontier wouldn't be in this position to begin with.
Cubs fans are some of the most loyal around, but they haven't one the big one in over a 100 years
Good luck to you and your family. I hope you get the outcome you're looking for.
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