Originally Posted by InsideAnalyst

I calculate operating synergy offset of a Frontier merger to be about 20-30 million against our cash burn, at best. Maybe 35 million in an absolutely ideal scenario.

Even if our monthly cash burn was only ~$50 million, that would be a ~$20 million deficit monthly, ~$120 million deficit in a year, which dwarfs Frontier's profit. Best case.

That being said, Frontier deal could still work with the same equity swap concept which would reduce our debt and therefore debt payments and reduce that deficit number considerably. That's why they have still made some offers. The numbers on this are super super tight though, and that's why their lowball merger offers have been rejected by our bond-holders so far.

The sentiment I'm tracking is that Frontier would rather not deal with a merger and just buy our jets at a discounted rate unless they can get a sizeable reward/discount from our bond-holders for taking the risk and headache of a merger. If our bondholders get spooked (if they are not already), they may make that move. Or they may just trigger liquidation before we burn through all of the cash they just gave us. The sooner they liquidate, the less money they lose, but then they have to sell off everything, which is not as attractive to them as it was even 12 months ago.



Broken for the oversaturated condition. Most business models aren't broken in a vacuum, but we are not in one. The carriers with stronger balance sheets will do what they can to promote a somewhat oversaturated situation during the downturn to take market share and eliminate competitors. We can't compete by trying to undercut them on price, which is why we are trying to shift away from being a ULCC. Will our business model shift work in time? I'm unsure.