Jump to content
Sign in to follow this  

Frontier Airlines files for chapter 11

Recommended Posts

Frontier Airlines files for bankruptcy

Low-fare carrier plans to keep running while it reorganizes

The Associated Press

updated 5:53 a.m. ET, Fri., April. 11, 2008

DENVER - Frontier Airlines Holdings Inc. has filed for Chapter 11 bankruptcy protection, but unlike other airlines filing for bankruptcy in recent weeks, it plans to keep running while it reorganizes.


The low-fare carrier said its filing Friday came after an unexpected attempt by its principal credit card processor to start withholding significant proceeds from the sale of Frontier tickets, which threatened to hurt Frontierâ€s liquidity.


The Chapter 11 filing in U.S. Bankruptcy Court in New York prevents the credit card processor from increasing its “holdback,†Frontier CEO Sean Menke said.


“By filing for Chapter 11, we will now have the time and legal protection necessary to obtain additional financing and enhance our liquidity. Fortunately, we believe that we currently have adequate cash on hand to meet our operating needs while we take steps to further strengthen our company,†Menke said in a statement.


Frontier, whose major hub is in Denver, has been affected as other airlines have by rising fuel costs and the credit crisis in financial markets.


ATA Airlines, Skybus and Aloha Airgroup all have filed for bankruptcy recently, but Menke said Frontierâ€s reasons for doing so were different.


“Unfortunately, our principal credit card processor very recently and unexpectedly informed us that, beginning on April 11, it intended to start withholding significant proceeds received from the sale of Frontier tickets,†he said. “This change in established practices would have represented a material change to our cash forecasts and business plan. Unchecked, it would have put severe restraints on Frontierâ€s liquidity and would have made it impossible for us to continue normal operations.â€


He said Frontier was prepared to litigate, if necessary.



The creditor listed in bankruptcy court documents as having the largest general unsecured claim against Frontier by far was Wells Fargo, with $93.5 million. Frontier said it had fewer than 50 creditors.


At the end of last year, Frontier said, it had assets of $98.3 million and debts of $92.2 million.


A Frontier spokesman had said earlier this week the airline had “no concerns about bankruptcy†but added that it was working on strengthening its cash position.


Last month, Frontier said it had agreed to sell four planes as it dealt with rising fuel costs.



© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: Frontier Airlines files for bankruptcy - News - MSNBC.com





MSN Privacy . Legal

© 2008 MSNBC.com

Share this post

Link to post
Share on other sites

This is getting a bit scary. It's like you're afraid to book a flight because you don't know if the airline will be around in a week!

Share this post

Link to post
Share on other sites

if you buy trip insurance make sure your insurance covers airfare, my mom had to cancel flights for my cousin and grandma once and it was a huge fight to get the money back.

Share this post

Link to post
Share on other sites
Originally Posted by Alyssa View Post
really good reasons to buy trip insurance!!!
If I hadn't already, I would be doing this NOW!!!

Originally Posted by Morgan View Post
I'm ready for my wedding to be done in 2 months so I can stop worrying about my flight getting canceled!
I know! I'm praying to the airplane gods nothing happens to Northwest before June 24th!

Share this post

Link to post
Share on other sites

good lord another onehuh.gif? is air travel even going to be possible any more? it seems like they are dropping like flys. i dont feel safe buying a ticket because what if they file chap 11 and leave me stranded somewhere having to buy another ticket like ATA did

Share this post

Link to post
Share on other sites

As a Denver native, Frontier Airlines is known as our "hometown" airline here. I have several close relatives who have been in the airline industry for long time. Flights, schedules, EVERYTHING is running as normal. Chapter 11 is very different from Chapter 7 and while i don't know the full details of it all, I do feel very confident in telling everyone here that they will not close their doors and stop flying tomorrow due to this. Can it happen though? yes it could, but it could also happen to any other airline out there as they are all struggling right now due to rising costs and other issues. Sorry that is my little rant on Frontier rant.gif


As far as trip insurance...yeah might be a good idea for ANY airline we all have our wedding trips booked on...after all, we will be traveling for our weddings!

Share this post

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Best Destination Wedding Sponsors

    Facebook Pinterest Google+ Twitter
  • Posts

    • I have stayed at Dreams La Romana and Dreams Dominicus.  The two resorts are very different in style and decor. A few comparison points are below and fact sheets are attached for both.   Both resorts are approx 45 minutes from Punta Cana airport, close proximity to Saona Island, Catalina Island and Altos de Chavon. Top championship golf courses in the Caribbean are just minutes away including Teeth of the Dog, Dye Fore, The Links and La Estancia – all designed by world-famous Pete Dye. Restaurants are similar at both resorts.  Both offer the Explorers Club for Kids.  Dreams Dominicus  Brand new resort and in 2016 488 rooms (however additional construction was underway) More contemporary style & decor Good beach area Rooms were very nice Preferred Club located in main lobby and adjacent to main pool & beach front Food was good Center plaza area with nighttime entertainment Main lobby is small, but outdoor bar off lobby is nice Dreams La Romana Originally built in 2003 & opened as Dreams La Romana in 2008 756 rooms Recently renovated and new preferred club adults only lounge & pool added  Rooms are more traditional Caribbean decor Grounds are very lush and tropical Good beach area food was good    Dreams Dominicus fact sheet.pdf Dreams La Romana fact sheet.pdf
    • My sister has done it but with the destination wedding, only super close family members and friends came since it was expensive and farther. It was great though.
    • Thanks! I had it printed out. Very useful!!
    • Hello Guys, Are you looking for affordable wedding venue, reception halls, party rentals, outdoor event venue, birthday party venue in mobile al.  Choose Anne-Marie Cottage for your special occasion. Our cottage is an affordable venue for your intimate wedding.   Thank u 
    • Flower girl dresses tend to follow the latest trends in bridal party and thanks for sharing Great website that provide  good collection & services with affordable price .
  • Topics