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- - Frontier (https://www.airlinepilotforums.com/frontier/26312-frontier.html)

Quote:

Originally Posted by Spaceman Spliff (Post 384889)

that's just his base salary...don't even ask about his perks and stock options. Probably worth 10 times as much. He's doing just fine.

Those stock options and a $5 bill will buy him a Venti Coffee at Starbucks.

Yeah...those stock options will make him rich!

Lets not forget Branson FAILED with Virgin Blue in Australia. He didn't get rich throwing money down ratholes.

Quote:

Originally Posted by chicken (Post 383599)

In your opinion, given the current market conditions, how long do you think Frontier has?

Four months, max.

Quote:

Originally Posted by iahflyr (Post 383760)

In the airline industry, cash = time. Frontier actually has a decent amount of cash if I remember correctly. I believe they have about $200 million in cash. Even though they are losing $40 million a quarter, I don't see their demise as imminent. I think there is a much better chance of a few others carriers going out of business first (Mesa, VA, etc...)

Oil prices are going to continue to force carriers out of business. Something needs to be done about these fuel prices.

Key word: "had" cash. They wasted a substantial amount of it on starting and then withdrawing from markets, on selling cheap fares, and spent about three times as much as would have been needed on the start-up of a subsidiary.

You're right--Southwest does not have a better product, but they do have the product that people want, and in any event, there is no valid comparison between Frontier and Southwest. Southwest is a more successful business model on any objective basis.

Quote:

Originally Posted by Andy (Post 383917)

F9 is extremely short on cash. F9 hasn't been able to line up any DIP (debtor in possession) financing; that's not a good sign.

F9 had $170M, according to their end of Dec filing. They haven't filed a 10Q for Jan-Mar 08 yet, so it's difficult to determine their current cash position. It's unlikely that F9 will be able to emerge from bankruptcy unless they find additional cash and soon.

Due to negative cash flow trends, First Data told F9 that they would be increasing the holdback percentage on tickets sold to 50%. First Data also wanted to increase collateral from $54.5M to $130M. First Data was obviously getting rather concerned over F9's survival, since their air traffic liability at the end of Dec was $174.7M.
In one of their bankruptcy filings, F9's SVP of Finance (Edward Christie) said that F9 had $18.1M left on letters of credit.
I don't know how long F9 will be able to hold off First Data's attempt to increase holdback, but if F9's credit card processor agreement expires anytime soon, they'll likely be toast instantly.

F9's sold 2 A318s and 2 A319s, allowing them to free up ~$35M in equity (I don't have the exact numbers at my fingertips right now). Having watched this with other airlines, I'll go out on a limb and say those aircraft probably had the most equity of any aircraft in F9's fleet. Any additional aircraft sales will not net as much money.

With F9 filing for bankruptcy, they'll have to pay everything on a cash basis; there'll be no more 60 days same as cash. That's a huge squeeze on cash flow.

It seems like Southwest has been adding DEN flights ever since F9 declared bankruptcy. With Southwest rapidly expanding in DEN, they are putting the screws to F9. I have no doubt that LUV's goal is to put F9 out of business.

Here are a couple of LUV's latest press releases:
http://phx.corporate-ir.net/phoenix....359&highlight=
http://phx.corporate-ir.net/phoenix....426&highlight=

A very accurate analysis. I would only add that the Bankruptcy Court is not going to allow Frontier to sell off assets to convert equity to cash for them to burn through. The asset sale that they did just before they filed will be the last without court approval. The duty of the court is to mitigate any further losses to creditors. It will only take one creditor motion to halt the conversion of assets to cash.

Quote:

Originally Posted by Flyboyrw (Post 384804)

Did Frontier make a cut today? Lynx did.

How much was the cut? That would almost have to make them the lowest paid in the industry, as they were very close to that as it was.

Forced pay cuts and demands for cuts that don't amount to more than a few tenths of a percentage of overall costs is usually just the last flailing move--like rearranging the deck chairs on the Titanic.

Quote:

Originally Posted by MTOP (Post 385967)

Southwest does not have a better product, but they do have the product that people want,

Isn't the product people want, in a capitalistic market, the definition of a "better product?"

To think otherwise is to fail in business. It's not about what you consider to be the best product, it's what your customer considers the best product...for whatever fickle or irrational reason they choose.

Does anyone actually think Wal-mart provides the best shopping experience? They do make tons of money, though.

Quote:

Originally Posted by Spaceman Spliff (Post 386129)

Yes, actually you are right about that. I think what I meant was that while SW doesn't have a certain type of TV in the seat, and does sort of heard the passengers onto the airplane without seat assignments, etc., it may be less than superb service, but you can't argue with the demand for it.

So yes, that would make it a better product in the marketplace.

Quote:

Originally Posted by Fishfreighter (Post 385918)

Lets not forget Branson FAILED with Virgin Blue in Australia. He didn't get rich throwing money down ratholes.

Side issue to this thread however I suggest you research Virgin Blue. Branson is currently president and part owner of this profitable/ expanding Australian airline.