I seriously doubt they will, however I wouldn't be surprised if this "new threat" was mentioned in super secret NDA contract negotiations. "Sorry ALPA negotiators, Indigo has informed us if we can't get a low-rent pilot contract that the entire company will not be competitive and Indigo will be forced to give our aircraft orders to their new Chilean and Canadian ULCC
start-ups." It will be complete bullish!t and unfortunately some would believe it. However, I do believe that most of our union representatives and negotiators are senior enough to say "Eff the growth, that's your problem! Give us our pay and benefits!" And maybe that goes for the junior pilots as well, nobody wants a long-term career with Frontier under a sub-par contract. Get the right contract, screw the management threats, and let the airline operation determine the level of success moving forward; this pilot group is done subsidizing labor cost for Indigo ownership.

 

Well said.

 

We have a lot of fairly new 320s (and older 319s) leaving our fleet as new 321s and 320neos arrive. Indigo could easily transfer some of these airframes to one of their other operations, which makes sense for Indigo to be able to do.

New airplanes are expensive and Indigo is contractually required to accept a significant amount of new aircraft. Too much debt too quickly can be detrimental to many businesses. I am no business or management expert, but it occurs to me that it could even be in Frontier's best interest if Indigo did have the option or ability to transfer some of that risk (and debt) to another operation if it was in Frontier's best interest.

I am trying to stay positive and must admit there are many times when I am skeptical about Frontier's future when I see and hear of some of the decisions that Indigo makes (many of which seem to only benefit the short term bottom line and not Frontier's long term best interest).

 

Indigo inherited the A/C order from Republic, who received very favorable terms as an early NEO supporter.
I've heard dollars per airframe thrown around, but can't substantiate them, and it doesn't really matter.
Bottom line, every NEO we take delivery of is turned around and sold to a leasing company at immense profit. It's a page right out of Crandall's playbook with the MD80s at American. He ordered 400 odd aircraft from Mcdonall Douglas, got insane terms per airframe for the largest single order ever, and then sold them off to leasing companies at retail.
Frankie might not be our friend (labor), but he isn't stupid. This place is a gold mine any way you cut it.

 

We will keep the deliveries. You don't stop expanding a profitable enterprise to shift assets to a start up business.
Th vast majority of the US is wide open for ULCC growth.

They will just order more acft for the foreign ULCC. Same thing they did for Tiger Air, Wizz Air, Mandala. All airlines Indigo has owned a piece of the pie in.

 

Perhaps this is the real reason we've not been sold, or IPO'd.

If I had dibs on several dozen high dollar assets at a massive discount, and planned to buy and sell them for immense profit, I wouldn't depend on just one outlet to sell them.

I agree with Pulledbreaker - it would be naive to think those airbuses won't migrate to where they are most useful.

... Just saw your post Trowser. I like your prognosis better. I defer - you've got knowledge of the industry. I only know how to fly

 

I agree with what you say. In fact, several pages back I stated the very same thing. I was worried that there wasn't really any growth, but only the illusion of growth, as the net aircraft and block hours were way down in January, compared to years past.

I speculated that Indigo may just be pocketing a bunch of cash with each aircraft delivery (as they transferred ownership to the leasing company), and a fairly new 320 was returned to a leaser, with no net growth airframe wise. I do realize there was available seat growth, even though airframe numbers were down.

My worry is that with each of the new aircraft deliveries that Indigo is the only one that is benefiting, and not Frontier per se.

I was told there is a clause in the Airbus purchase order that the aircraft could not be sold for profit to another airline, but do not know that to be fact? That clause wouldn't prevent F9 from taking the new delivery and Indigo subsequently transferring an existing aircraft to one of their other airlines.

The fact remains that my worry and speculation will change nothing, so I choose to stay positive and hope somehow it all works out.

 

I've stated this here multiple times. But I will again.

The point of a business is growth and profits. The bigger the company, the higher the profit. Indigo has no intention of making small airlines, and having them stop growing. They want to be as big as possible. Double the fleet, and you double your revenue. Every business wants to be big.

Frontier will continue to grow.

 

I certainly hope so, and can appreciate (and share) your optimism. But what's to stop Indigo giving us all the new deliveries, and the returns going to these other startups? Essentially netting just a dozen or so aircraft over the next 5 years. They have already stated that our growth this year is in frequency vs expansion.

700 to 1100 pilots in 3 years, with the same number of aircraft? In my short time here, I've come to the realization that Indigo is effectively an aircraft utilization consulting firm. Managing airline operations is just a byproduct.

 

I hope you are correct, but the fact remains that since Indigo purchased us, net aircraft in the fleet has remained flat. They have taken new aircraft but also returned aircraft (and in some cases returned fairly new 320s), but total aircraft in fleet has not increased. Yes, seat count is up. Utilization is up and total pilots on property has increased.

I guess that is still considered growth, but not the growth that Indigo promised 3 years ago.

Growth costs money and is a belief and a plan for tomorrow. Any money invested in growth, is money that Indigo can not put in their pocket today.

I guess I am playing a mental game of devils advocate with myself!! I hope Aero's assessment is spot on!