av8tordude

Southwest bid for Frontier runs into trouble - Yahoo! Finance

There's a speedbump in plans by Southwest Airlines to buy Frontier Airlines at a bankruptcy court auction.
The head of the Southwest Airlines pilot union says the two pilot unions did not reach a deal Wednesday night. Southwest executives have said they want agreement between the pilots before buying Frontier.
It appears the talks broke down over seniority, the ranking of pilots that determines their rights for schedules and protects them if there are layoffs. Southwest pilot union President Carl Kuwitzky says their offer was to put Frontier pilots at the bottom of the combined seniority list.
For pilots in an airline merger, that's considered the worst possible outcome.

FreightK9

What I believe is going on is a front to the SWA pilots by SWA management. I don't believe SWA can afford to lose this deal. It's worth way too much to them. They also do not want to disrupt their own labor force. By almost guaranteeing failure (24 hrs to figure out seniority) they now can continue the process and apply legislation which at this point looks like it will end up at an arbitrator.

Then the arbitrator is the bad guy that gives some sort of SLI to F9 pilots.

I still think the RAH gets this deal. SWA has too many enemies on the creditors committee and I'm sure that the management at F9 don't want to see their hard work just disappear.

CHQ Pilot

I wouldn't put it past SWA to withdraw the labor clause and proceed with the bid for Frontier, but not merge the two airlines. If the two airlines remain seperate then the M-B Amendment would not apply and neither would A-M. Frontier would be drawn down while SWA takes over. The BK judge decides on what is the best outcome for the creditors to recoup their money, not the employees or future of Frontier.

gipple

Lets get this straight for the last time. This is not a merger. This is rescuing a failed carrier from liquidation. f9 pilots have 3 choices. Staple, street, or RAH.

Killer51883

im wondering how the judge would feel about putting all the mechanics, gate agents and other employees of F9 out of work. There are alot more jobs at stake here than just pilots. I dont know if this judge is appointed or elected but to put a huge amount of people on the street would not be a smart decision if he has an election coming up.

Justdoinmyjob

That's kind of an arrogant statement. I've found in the last few years that a pilot's definition of a merger or aquisition doesn't quite meet the legal definition of it.

Justdoinmyjob

A bankruptcy judge is only beholden to the Creditor's Committe and as such, his or her only consideration is to get the best return for the secured creditors, not the employees or community.

youngairliner

What is arrogant about the statement when it is true. It is unfortunate for some, fortunate for others, depends on your perspective. I don't agree with the term "staple" per se. I look at it as getting a number on a seniority list that has industry leading narrow body pay rates, great benefits, and still a large potential for more growth. RAH is a choice they might have, and I do think liquidation is a definite possibility. F9 seems to think their management has a lot of leverage or say in what happens to their employees or assets. Pretty sure the whole bankruptcy auction removes most of that influence. Staple is harsh. Welcome aboard with your same pay with more coming, but a much lower seniority number.

Southerndog

The auction itself will not take place in the bankruptcy court; but will be held at the offices of our bankruptcy counsel in New York City. He stressed that the auction will not take place until Aug. 11, after the Aug. 10 deadline for final proposals has passed, and only if there is at least one proposal competing with the original court-approved Republic Airways Holdings, Inc. offer.

Please remember what Sean said in his last Update: that he and the Company’s board of directors, along with our financial and legal advisors, and in consultation with our Unsecured Creditors Committee, will make the final decision on which offer is best for all stakeholders, including our employees and the communities in which we operate.

The bottom line, then, is that the bankruptcy court does not conduct the auction on Aug. 11. Rather, the Company and its advisors will conduct the auction and those who have submitted final proposals will work to prepare what they hope will be deemed by Sean and our board of directors as the best proposal for all stakeholders. After the Company determines the highest and best proposal, it will be presented to the bankruptcy court for approval.

Judge will only step in if a creditor Objects to the plan.

P.S. SWA is not a creditor.

iceman49

Federal...does not have to worry about an election...