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Old 08-14-2009, 04:09 PM
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Default Frontier pilots sold out by FAPA

Frontier pilots should be very angry at this. FAPA sold them down the river. This e-mail from SWAPA President Carl Kuwitzky indicates that SWAPA made numerous attempts to contact FAPA before the auction went final WITH NO RESPONSE. Ever had your brother fail to cash in your lottery ticket? A few senior guys at the union just condemned the rest to life at other than Southwest for their own self interest. By the way, at least two of the influential pilots in the discussion were previously fired from Southwest including someone very, very near the top. Wow!

There are not many weeks like this one at SWAPA. It actually began last weekend when we had discussions with the Company about the "labor contingency" provision the Company was going to place in their binding proposal to acquire Frontier. Apparently Southwest advisors came to the same conclusion that our legal team did that the labor contingency could prove to be a stumbling block moving forward. We were advised that at Gary Kelly's direction that the contingency would remain in the bid in spite of recommendations to remove it. That set the stage for the week.

On Monday the Company made public their binding proposal. The $170 million bid was substantially higher than the placeholder "bid" of $113.6 million submitted previously. While the $170m bid looks significantly higher, it included $40m to reject the leases of 11 Frontier aircraft. On a net basis the SWA bid increased the payout to the unsecured creditors from .087 cents on the dollar to .12 cents. There were two bidders who would then enter the auction for Frontier, SWA and Republic. The auction was to begin on Tuesday but was delayed until Thursday to give all parties ample opportunity to review the Southwest bid. On Tuesday it became apparent that the labor contingency was a major sticking point for Frontier management and counsel who oversee the bankruptcy auction. As a reminder the purpose of a labor contingency was to take the possibility of binding arbitration out of play. In order to satisfy Frontier management/counsel it became necessary to reach an Agreement in Principle (AIP) on a Seniority List Integration (SLI) before the auction was to begin on Thursday. With that news SWAPA began an earnest effort to get a deal done. Our M&A team was in Washington and we hurriedly got them back to DAL for bargaining Wednesday afternoon. The FAPA M&A team was set to fly to DAL as well arriving about the same time. We scheduled bargaining to begin at 1700 CDT.

After our M&A team was in the air headed to DAL FAPA informed SWAPA that their complete team would be unable to get to DAL due to members spread around the country and thus they would not be traveling to DAL. We immediately began setting up a video/audio forum for bargaining still set to begin at 1700 CDT. SWAPA was ready to go at 1700. Just prior to 1700 we were advised that FAPA would not be ready due to their President being unavailable due to his participation in meetings in NY as a member of the unsecured creditors committee. Rather than begin negotiations with the FAPA M&A team, FAPA chose to delay the beginning of bargaining until 1930 CDT until their President was available. We had a deadline of midnight EDT to reach an agreement. So we were down to 3 ˝ hours of bargaining time to reach a deal. These type negotiations typically take weeks if not months to conclude. The two M&A teams exchanged several proposals and approaching midnight EDT we concluded our meeting without agreement and agreed to talk on Thursday morning to continue bargaining during the auction process. SWAPA reached out several times on Thursday to FAPA but we never heard back from their team to continue bargaining.

At the conclusion of bargaining we were in agreement on several issues but remained far apart on a combined seniority list. FAPA's position opening was for relative seniority with yet to be determined variable. In pure relative seniority integration you would see 1 Frontier pilot placed between every 10 Southwest pilots all the way down to the bottom of the new combined list. SWAPA's position Wednesday night when we broke was placing the Frontier pilots on the bottom of our list with several positives. The Frontier pilots would be trip pay protected at their CBA book rates plus any percentage increases negotiated in the SWAPA section 6 until the SWAPA rates were higher. This would have resulted in over a 40% increase in pay for most Frontier F/O's. Some would have been even higher. Additionally, we were willing to accept all Frontier pilots on the combined list including all furloughed pilots plus we would allocate 75% of the seats in the new SWA DEN domicile for 3 years following the fence agreement termination. Our proposal satisfied 3 out of 4 of the FAPA identified needs to reach an agreement. Their needs were job protection, pay protection, domicile protection and seat protection. In summary, the FAPA proposal would be a windfall for the FAPA pilots at the expense of the SWAPA pilots. Clearly, we were not willing to go anywhere near that position. Unfortunately we were never able to resume bargaining towards an agreement before the auction concluded. I'm have my doubts whether FAPA had any intention of ever reaching an agreement, especially when we had taken binding arbitration out of the mix with the contingency language.

At the conclusion of the auction Republic's bid was deemed "highest and best" by Frontier management. Republic revised its original offer to forgo its bankruptcy claim of $150m which put significantly more money in the pockets of the unsecured creditors (above what Southwest was offering) plus increased the other creditors take. The Republic bid apparently increased the money to the unsecured creditors above what Southwest was proposing initially. I do not know what Southwest's follow on bid was but I do know that Frontier management/counsel deemed the bid unacceptable in part due to the labor contingency provision. I can assure you that your Association did everything possible to try and reach agreement with FAPA. This chapter is now closed but the book on Frontier is not. They have an immense challenge ahead as employees will want their bankruptcy concessions returned and rightly so. Frontier has touted 8 months of profitability stating that they are a new carrier. Unfortunately that profitability has come on the backs of Frontier employees. It will be an interesting watch as they integrate with Republic. I do not expect Southwest Airlines to sit still in DEN.
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Old 08-14-2009, 04:24 PM
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LMAO!! let the smear campaign begin. FYI, I would say at least 95% of the current F9 pilots are very supportive of how our FAPA leadership represented us. There is more to the picture.
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Old 08-14-2009, 04:28 PM
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Originally Posted by F9er View Post
There is more to the picture.
I'm sure there is ... but where is it???????????

My guess is that the FAPA M&A guys are now working feverishly trying to figure out how they can get out of making "full seniority integration" the only acceptable means of merger since that was their staunch position vs. SWAPA!

I'm not faulting FAPA for killing the deal, just wondering if their strategy will be beneficial in future negotiations ...........
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Old 08-14-2009, 04:31 PM
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I'm not on here to turn this into a bash fest, I was just stating that there is more information that has been presented to us.
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Old 08-14-2009, 04:36 PM
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Again, another post from a "new" member just joining today that has only 1 post. Why don't you post under your real screen name, ......???

It never ceases to amaze me, the mentality of posters on this board. I am, quite frankly, GLAD SWA did NOT get the bid. They would have talked the talk just to get F9, then dismantled them before long, just as they have in the past.

Enough of this bull$hit. This may be an opportunity for something great down the road, and all you guys want to do is $hit on it....perhaps a tad of jealousy because you might just have some real competition now? Grow up, better yet, grow some balls and let your voice be known NOT under a pseudo name, then perhaps someone will listen. Doesn't mean they'll agree, but might respect you enough to listen and understand your points.


PS - Why do you think they wanted F9 pilots STAPLED to the bottom. Yes, yes...promise the F9 pilots the moon and the stars, higher pay for F/Os, and so on and so on. But when the purchase of F9 doesn't go so well down the road and times get tougher in the industry, and they have to furlough....guess who gets furloughed? ALL THE F9 pilots because THEY'RE AT THE BOTTOM. NOT a single SWA pilot. Doesn't take a rocket scientist to figure that one out.

Originally Posted by Ravensvic View Post
Frontier pilots should be very angry at this. FAPA sold them down the river. This e-mail from SWAPA President Carl Kuwitzky indicates that SWAPA made numerous attempts to contact FAPA before the auction went final WITH NO RESPONSE. Ever had your brother fail to cash in your lottery ticket? A few senior guys at the union just condemned the rest to life at other than Southwest for their own self interest. By the way, at least two of the influential pilots in the discussion were previously fired from Southwest including someone very, very near the top. Wow!

There are not many weeks like this one at SWAPA. It actually began last weekend when we had discussions with the Company about the "labor contingency" provision the Company was going to place in their binding proposal to acquire Frontier. Apparently Southwest advisors came to the same conclusion that our legal team did that the labor contingency could prove to be a stumbling block moving forward. We were advised that at Gary Kelly's direction that the contingency would remain in the bid in spite of recommendations to remove it. That set the stage for the week.

On Monday the Company made public their binding proposal. The $170 million bid was substantially higher than the placeholder "bid" of $113.6 million submitted previously. While the $170m bid looks significantly higher, it included $40m to reject the leases of 11 Frontier aircraft. On a net basis the SWA bid increased the payout to the unsecured creditors from .087 cents on the dollar to .12 cents. There were two bidders who would then enter the auction for Frontier, SWA and Republic. The auction was to begin on Tuesday but was delayed until Thursday to give all parties ample opportunity to review the Southwest bid. On Tuesday it became apparent that the labor contingency was a major sticking point for Frontier management and counsel who oversee the bankruptcy auction. As a reminder the purpose of a labor contingency was to take the possibility of binding arbitration out of play. In order to satisfy Frontier management/counsel it became necessary to reach an Agreement in Principle (AIP) on a Seniority List Integration (SLI) before the auction was to begin on Thursday. With that news SWAPA began an earnest effort to get a deal done. Our M&A team was in Washington and we hurriedly got them back to DAL for bargaining Wednesday afternoon. The FAPA M&A team was set to fly to DAL as well arriving about the same time. We scheduled bargaining to begin at 1700 CDT.

After our M&A team was in the air headed to DAL FAPA informed SWAPA that their complete team would be unable to get to DAL due to members spread around the country and thus they would not be traveling to DAL. We immediately began setting up a video/audio forum for bargaining still set to begin at 1700 CDT. SWAPA was ready to go at 1700. Just prior to 1700 we were advised that FAPA would not be ready due to their President being unavailable due to his participation in meetings in NY as a member of the unsecured creditors committee. Rather than begin negotiations with the FAPA M&A team, FAPA chose to delay the beginning of bargaining until 1930 CDT until their President was available. We had a deadline of midnight EDT to reach an agreement. So we were down to 3 ˝ hours of bargaining time to reach a deal. These type negotiations typically take weeks if not months to conclude. The two M&A teams exchanged several proposals and approaching midnight EDT we concluded our meeting without agreement and agreed to talk on Thursday morning to continue bargaining during the auction process. SWAPA reached out several times on Thursday to FAPA but we never heard back from their team to continue bargaining.

At the conclusion of bargaining we were in agreement on several issues but remained far apart on a combined seniority list. FAPA's position opening was for relative seniority with yet to be determined variable. In pure relative seniority integration you would see 1 Frontier pilot placed between every 10 Southwest pilots all the way down to the bottom of the new combined list. SWAPA's position Wednesday night when we broke was placing the Frontier pilots on the bottom of our list with several positives. The Frontier pilots would be trip pay protected at their CBA book rates plus any percentage increases negotiated in the SWAPA section 6 until the SWAPA rates were higher. This would have resulted in over a 40% increase in pay for most Frontier F/O's. Some would have been even higher. Additionally, we were willing to accept all Frontier pilots on the combined list including all furloughed pilots plus we would allocate 75% of the seats in the new SWA DEN domicile for 3 years following the fence agreement termination. Our proposal satisfied 3 out of 4 of the FAPA identified needs to reach an agreement. Their needs were job protection, pay protection, domicile protection and seat protection. In summary, the FAPA proposal would be a windfall for the FAPA pilots at the expense of the SWAPA pilots. Clearly, we were not willing to go anywhere near that position. Unfortunately we were never able to resume bargaining towards an agreement before the auction concluded. I'm have my doubts whether FAPA had any intention of ever reaching an agreement, especially when we had taken binding arbitration out of the mix with the contingency language.

At the conclusion of the auction Republic's bid was deemed "highest and best" by Frontier management. Republic revised its original offer to forgo its bankruptcy claim of $150m which put significantly more money in the pockets of the unsecured creditors (above what Southwest was offering) plus increased the other creditors take. The Republic bid apparently increased the money to the unsecured creditors above what Southwest was proposing initially. I do not know what Southwest's follow on bid was but I do know that Frontier management/counsel deemed the bid unacceptable in part due to the labor contingency provision. I can assure you that your Association did everything possible to try and reach agreement with FAPA. This chapter is now closed but the book on Frontier is not. They have an immense challenge ahead as employees will want their bankruptcy concessions returned and rightly so. Frontier has touted 8 months of profitability stating that they are a new carrier. Unfortunately that profitability has come on the backs of Frontier employees. It will be an interesting watch as they integrate with Republic. I do not expect Southwest Airlines to sit still in DEN.

Last edited by USMCFLYR; 08-16-2009 at 06:37 AM.
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Old 08-14-2009, 04:36 PM
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Emphasis added...probably a LOT more to it than SWAPA want's to let on...

Republic Airways Holdings Wins Bid for Frontier in Bankruptcy Court Auction

In a surprise decision, the Frontier creditors decided to select Republic as the winning bidder in the bankruptcy auction process. The main reason seems to be that Southwest refused to remove from its bid a requirement that the pilot unions (SWAPA for Southwest and FAPA for Frontier) must agree on a method to integrate the seniority lists of the two groups for the purchase to go forward. The Southwest Airlines Pilots Association wanted to put Frontier pilots at the bottom of its seniority list, while Frontier pilots wanted to be dovetailed into the pecking order. They could not reach agreement by Wednesday night and Southwest did not seek an extension of time to bid from the bankruptcy court.

Also Republic improved its initial $108.75 million offer, removing pre-closing conditions and agreeing to waive distributions on a $150 million claim, which is expected to result in a 94 percent increase in the distribution to Frontier's general unsecured creditors.

Finally, Republic had received approval to purchase Frontier from the Antitrust Division of the Justice Department—something which Southwest had yet to obtain. Southwest Airlines, said its refusal to remove the labor condition from its proposal was key in the decision by Frontier's creditors that Southwest's $170 million bid was unacceptable.

Republic has said it intends to operate Frontier as a wholly owned subsidiary.
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Old 08-14-2009, 04:50 PM
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So you rather take a chance with Republic then with southwest?

I wonder what your I.Q. level is?
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Old 08-14-2009, 04:51 PM
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138 and what's yours???? 92?

Originally Posted by ericoyani View Post
So you rather take a chance with Republic then with southwest?

I wonder what your I.Q. level is?
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Old 08-14-2009, 04:54 PM
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Right, first time poster, and I have some oceanfront property in NV I can sell you.

Originally Posted by corl737 View Post
How do you know that this individual isn't truly a "first time" poster? This forum has seen a lot of interest from many who never knew it existed before.

And thanks for the compliment ... really professional ... but then calling you a "wuss" wasn't in the best form either, sorry.

// Corl
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Old 08-14-2009, 04:58 PM
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Originally Posted by IFlyForFood View Post
Right, first time poster, and I have some oceanfront property in NV I can sell you.
Every watch the "CSI" series? I'm guessing that it was YOU who created a new screen name and just made post number 1. There would be no other reason for you to be so adamant about it's suspicion.
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