Originally Posted by
FAULTPUSH
The pilots didn't make any choice in the matter. The Republic bid was chosen as the highest and best offer by the creditors.
Got a short memory Faultpush......
Aug. 17, 2009/Deal Journal
Posted by Michael Corkery
The Frontier Airlines executives and unions officials returning home from last Thursday’s auction in which Frontier was sold to Republic Airways Holdings Inc. were hailed as heroes.
After landing in Denver, Frontier’s hub, their airplane taxied beneath a “water cannon salute” and was greeted at the gate by 200 cheering Frontier employees. “It was awesome,’’ recalls John Stemmler, president of Frontier’s pilots union.
The deal with Republic has people in Denver celebrating because it prevented Frontier from being sold to Southwest Airlines, which would have likely resulted in thousands of job cuts. Republic, which is a contract flier for other airlines, will likely keep more Frontier jobs because it doesn’t currently employ ticket handlers or do route planning.
The Frontier pilots were key to the outcome because they balked at a proposal by Southwest’s pilots union that would have put the Frontier pilots at the bottom of the seniority list of the combined companies. Southwest was unwilling to negotiate and handed the keys to Republic.
Deal Journal spoke with Stemmler about the auction and Frontier’s future. (Read a previous Deal Journal interview with Stemmler after Southwest first made its bid for Frontier) Here are excerpts from the latest interview.
Deal Journal: Were you surprised that Southwest, a much larger and better capitalized company, lost the auction to Republic?
Stemmler: Yes. Southwest has a $2 billion checkbook. They came in saying they intended to win. I was surprised they were unable to overcome more of the issues.”
DJ: Why was seniority such a big issue?
Stemmler: We have 640 active flying pilots. All of them would have been positioned at the bottom of the seniority list, or stapled to the bottom as we call it. Southwest is ten times larger than we are. There was no way Frontier pilots were going to move (up that list). We only had four hours to negotiate. It took Delta Northwest six-and-a-half months to negotiate the seniority issue (amid merger talks between those airlines).
DJ: Did you make any progress?
Stemmler: We started and ended negotiations with our pilots at the bottom. That didn’t seem like a good deal to us…. Southwest management didn’t want an acrimonious mix (of Southwest and Frontier pilots). At the end of the day, their management left it up to labor.
DJ: How will Frontier seniority be sorted out with Republic pilots?
Stemmler: We have confidence we can come up with a consensual list since we have time. Southwest said we will close only if you can come up with a list. Republic says we will close and we will operate Frontier as a fenced off entity until (Frontier and Republic pilots) reach a deal. And in case we can’t reach a deal, it will go to binding arbitration.
DJ: Given the tough times in the airline industry, are you concerned that Republic isn’t as well capitalized as Southwest?:
Stemmler: Sure, I would rather have Southwest’s balance sheet behind me but Republic presented the highest and best offer. We went in looking for the best deal for our pilot group and I think that’s what we got….For the last eight months, Frontier has been profitable while in bankruptcy. It’s not like we will be a drain on [Republic’s] revenue stream.
DJ: What are your hopes for Frontier under Republic’s ownership?
Stemmler: It’s very exciting for us because we’ve been in been shrinking for two years. This really is the chance to diversify and grow. We are a one hub airline that needs to change
