Frontier
 

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

IMO, Frontier is not going anywhere. Good ol' UAL is cutting back, so there should be plenty of room for SWA and FNT. :(

It's not a matter of "room," it's a matter of cash, isn't it?

I don't think anyone, anywhere is expanding right now.

Gone by the end of summer

Guys,

Threads like this are not cool at all. I have friends at Frontier as well as all over the industry. Everyone like's to be a vulture and speculate, but in these market conditions it serves us all to cheer for our friends at places like Frontier that are good organizations. They pay well, treat their pilots decent, and they serve some markets that have few if any alternatives. That means they ADD jobs to our profession that no one else will. Wages will not go up because Frontier fails and will not fall because they succeed. If Frontier fails, that is just that many more pilots out there in the market for jobs and if you do get hired at that next job, why would your future employer pay more? There are plenty of well qualified pilots willing to be employed thanks to quality companies not making it. A lot of Frontier's problems are just a cash crunch caused by it's financial partners (credit card companies.)

It's one thing to whine about sub-standard paying jobs, but it doesn't help when an industry average player fails.

Good luck Frontier!

17% pay cuts coming across the board tomorrow... So much for the good pay scenario.

No one wants to see Frontier go under. But burying your head in the sand and pretending this unfortunate situation doesn't exist isn't going to make things all better. What happens at Frontier affects the industry as a whole. That's exactly why this forum exists.

Sorry to hear about the pay cut, if it is for real. Definitely not good news.

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.

What's your source on this?

You forgot to mention that Frontier has what are possibly the best scheduling rules in the industry, and I can't complain about the pay. I made about $160,000 in my 5th year with F9 - there's not a lot of other places you can do that.

The sad irony is that if Frontier fails and Southwest succeeds, it would be solely due to hedging. It wouldn't be because Southwest has a better product.

I'm just waiting for the bubble to burst....

You can definitely exclude VA from the your list of doom and gloom as VA has very deep pockets,before VA it will be all the legacy carriers in this country that will either go bankrupt or simply down under and even than VA should survive.

You sound very informed. I'm guessing your CEO told you all about the deep pocket? Since I"m flying at Cal I guess I should start filing for unemployment.

if I had a dollar for every People Express, Skybus, Eastern, Braniff, etc etc. pilot who insisted that his airline would outlast a Twinkie...I might be able to afford the same amount kool-aid you've ingested.

The source will be revealed tomorrow...

Sorry but it would mean SW has a better product. The SW product is made up of it's service and personal(management, pilot, FA's, rampers, CSR's, etc.)., they hedged others didn't or at least not like SWA. I laugh every time I hear someone say something like, " Southwest only made money because they hedged." Yeah, so what's your point. Thats good/smart business.

I also find sad that so many people on this board are waiting with glee at the prospect that SWA might lose money. From my point of view we should all be proud the a USA has one of the best managed and run airlines in the world for the past 30+ years. We should all hope that our own companies were run half as well. To date zero have come close, they have a great product.

As for how long Frontier has, I hope it goes on long after I'm gone. I feel sure that everyone there will do thier best to make it work.

Are you kidding us? Legacies before Va?? Where are you getting this information from? Sorry, but sounds like lies to me.

Notice his syntax is very poor. An uneducated person willing to fly for less than six figures.

Never say never. Branson's pulled out of other businesses that have not been profitable.
VA lost $35 million in the first 53 days of operations.
VA requested an exemption from supplying the DOT with their fourth quarter stats. Why? That's never a good sign.

How have loads been at VA? Are they still selling tickets at fire sale prices?

http://industry.bnet.com/travel/2008...gns-lie-ahead/

http://www.airlinefanatic.com/2008/0...deadpool-next/

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=

I don't doubt the dedication of SW's employees and management but, when it boils down to it, I still think Frontier's product is better. More comfortable seating, more leg room, multimedia in each seat and assigned seating. All things considered from point A to point B, I'll opt for F9. (BTW; when it comes down to the rank and file employees, pilots, rampers, FA's etc, it is ridiculous to claim that one group is somehow better)


What is so funny to make you laugh every time? The point is just that. There is nothing wrong with pointing out facts and it isn't a put down to SW.

I haven't seen anyone on this board express that. Show me one and I'll show you a troll that should just be ignored anyway.

Hedging equals better budgeting, not better product. Product is what the customer sees, not the balance sheet. Southwest without a doubt has unequaled fuel hedging, but as a passenger, give me more seat width and DirecTV over over fuel hedging.

They've just recently (past week) added 2 more gates in DEN (C31, C33) between AA and US.

Brings their total to 7 (by my math). Rode their jumpseat in there Saturday evening b/c the flight was full. Ops agent told me I'd be up front again on the next leg, before I told him I was getting off in DEN.

Lots of people for a Saturday evening.

It's not just the seat and the TV. It's the feeling and the attitude that is abundant on most of their flights. Some people like that more that the seat size. There is also a fair amount of company loyalty in some markets (Dallas for example), and that keeps people in the SWA seats even though other airlines offer cheaper fares and bigger seats.

I have several friends who reufse to fly anyone but SWA, not just b/c they sometimes are the cheapest ticket.

"I don't doubt the dedication of SW's employees and management but, when it boils down to it, I still think Frontier's product is better. More comfortable seating, more leg room, multimedia in each seat and assigned seating. All things considered from point A to point B, I'll opt for F9. (BTW; when it comes down to the rank and file employees, pilots, rampers, FA's etc, it is ridiculous to claim that one group is somehow better)"

Zapata -

I've said many times that F9 runs a great airline. I've flown both (F9 and SWA) and was quoted on this forum sometime ago as expressing what a great flight I had on Frontier Airlines. I agree with all of the things that you say about F9. I hope that they can survive and come back stronger than before!
Now....SWA certainly has a business model that seems to be working at this point and time. If someone is wishing for any airline to fail that is really low. I've seen it mentioned before that we as pilots should be looking out for each other; not circling like buzzards.
Thanks for your insightful comments Zapata! Keep them coming.

USMCFLYR

Maybe a better business model?
 

Hey Pilot41,

I agree with you on some of those points, and don't take it personally when people look for Southwest to stumble just a little bit.... It's only human nature to root for the underdogs, especially when they used to be the top dogs and SWA is the new 800-pound gorilla (Hey, that's a compliment!).

In this society of unchecked Capitalism, SWA is doing just as should be expected... To grow and prosper. But when viewing this from a Frontier, United, or US Airways pilot's eyes, SWA is a predatory shark. When they smelled US Airways' blood in the water, SWA opened up in PHL, BWI, etc. When United became vulnerable, DEN became the new target. It seems that, as they should, they target the weaker prey. This is not a diss to SWA, just an observation. These certainly were not cities lacking in airline service, just weaker ones with higher priced tickets. Note that they don't go to ATL, MIA, JFK, EWR, etc. So that might explain people's posts hoping for SWA to slip up... even one time. We (Society) love to see the mighty fall, even if just one notch. Proof of this is our reveling in the trevails of Brittney Spears, Paris Hilton, Martha Stewart, Leona Helmsley, ect. I remember when United, Delta, and American were the targets of people wishing that they would be taken down a notch. It's just human nature.

As far as SWA having a better product than Frontier, I must respectfully, but wholeheartedly disagree. I have a ton of friends at SWA, pilots and flight attendants, where I only know a few from Frontier. So it's not personal. But as far as the product goes, I feel that F9 has better service, more room, and cleaner aircraft. I'm not talking about TV,either, although that's nice. For a long trip across the country, I'll take F9 any day if only for the frequent flier miles. On SWA, distance does not matter so I rarely rack up as many tickets on SWA like the other products out there. Also, many passengers resent being herded into lines, as efficient as it may be. That being said, on a short flight without food or room concerns, I encourage my company to use Southwest, as the price is usually better. Remember, I'm speaking as a passenger here.

Also, a lot of people (airline employees and passengers, both), wrongly blame Southwest for the death of customer service in the great race to the bottom in the US airline industry. Right or wrong, competing airlines often name Southwest (by name or by "the competition") as the reason that they must cut niceties or service to cities, similar to the European race to the bottom with Ryanair.

The people make SWA a great company for both passengers and employees and the business model cannot be beat or successfully emulated (it seems). But as far as having a better product? No way.... A nice product but not better.

Respectfully,

B727DRVR

While I agree that SWA currently has a great business model that is successful (ie, it makes money), it doesn't make it right. While they have thus far treated their employees with dignity and respect, they have continued to lower the bar for service in the airline industry. The Walmartification of airlines will eventually lead to the Amtrak of the skies...

SWA used to be the little guy who had to work harder to find successful routes. In fact they used that battle cry so often citizens and politicians started to believe them. (eg, see the Write Amendment) They only flew places they knew they could make money. The new SWA is somewhat of a bully. They are now playing the old legacy games where they will loose tons of money on certain routes to gain market share. Their executives are falling into traditional patterns where airline management and their egos try to put others out of business instead of focusing on what they did best.

It will be interesting to see what happens with this dandy over the next 20 years. Will they become the power house legacy or will they refocus on their traditional core of only do something that we can make a profit on?

So..... do you think SWA should ignore huge markets like DEN, PHL, etc with blood in the water to be nice?

Playing nice has nothing to do with my point. I was discussing the more traditional values of only doing route structures that make money. SWA is loosing cash in Denver. They aren't even competing with F9 or UA. However they have managed to come in and force F9 and UA to cut fares. Good for the cheap consumer who feels it is their right to fly across the country for $49. SWA is playing the "We can bleed money longer than you" game with F9: They are right then can. This is the more traditional and more often failed approach to airline management. This used to be against the core values of the old SWA. Herb is gone and things have changed. The newer SWA is a big dog with big teeth.

No, just an inferior product...
 

Hey,

I'm not bashing Southwest... If it weren't them, it would be some other shark. I'm not saying that they should ignore markets, just commenting on the markets that they are now targeting...

What I am saying is that, as a passenger, same leg - same price, all things being equal, Frontier (and Jet Blue, for that matter) offer a classier, better, more comfortable ride, and thus a better product. They have less of a cattle-car mentality, so that is better for passengers that long for the days of old where you weren't lined up like in kindergarden.

As far as profitability and business, Southwest wins hands down. And like a previous poster said, both airlines (all airlines) have great people. It's just harder for some than others to be "great" after they have been beaten down for so long... TWA, US Airways, etc.

Good Luck Frontier, and everyone else, for that matter.

B727DRVR

Hi!

I have never flown on Frontier, but from what I've read...

F9 has a better "Quality" product. But, better quality costs more.

SWA has a product that is judged to be a better "Value", which is why they're doing better financially than F9.

cliff
YIP

Actually, they're doing better financially than Frontier because they hedged. WN management has even stated that they would be losing money without the hedges.

Of course our management would state that. We're in contract negotiations, it's part of the doom and gloom campaign. Whether we would have lost money without hedges is debateable, because without the hedges we would had to raise prices to offset the extra fuel costs.

Contract negotiations 101.

raise prices
 

Raise prices.. Good one!

Did Frontier make a cut today? Lynx did.

The Lynx guys took a pay cut? The pay there is awful to begin with. Seriously, how much can they possibly cut from $50 and $22 an hour?

The Lynx guys did get a cut.

Frontier submits severance plan for managers
 

http://www.9news.com/money/article.aspx?storyid=91915

DENVER (AP) - Frontier Airlines has asked a court to approve a severance plan for senior managers it says is key to its efforts to reorganize under bankruptcy protection.


The airline says the plan is substantially less than those for comparable positions elsewhere in the industry. It would cover Frontier employees who don't have severance guarantees.

Denver-based Frontier submitted the plan today for 65 employees at the director's level or higher.

Benefits would range from about $50,000 to a maximum $144,000.

The Teamsters Union claims Frontier was seeking a "golden parachute" benefit for senior management. But Frontier spokesman Steve Snyder says CEO Sean Menke has taken a 20 percent pay cut to a $260,000 base salary.

Does that mean he is making 260K after the cut?

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.