a question for any financial people in here.....if frontier filed ch11 due to first data, why do they need financing if sean menke was on cnbc the day they filed saying that money was not the issue and they were ok to ride out the storm, i hope frontier makes it but if cash on hand was not the issue why were they allegedlly hitting the pavement in nyc for money???again im a somewhat fan of them as they have gotten me home when ual could not and i appreciated them taking care of me.
Because like just about all airlines (WN and Allegiant are exceptions for now) Frontier is loosing money. As one of the smaller major carriers Frontier doesn't have a TON of spare cash on hand. In the current environment every airline will run out of cash sooner or later. For Frontier that date is a sooner rather than later. For the other airlines I think the best case scenario is them lasting till next summer. This is if all things remain the same, which of course they do not. Under Chp. 11 Frontier has the opportunity to obtain financing under slightly better conditions than if they were not. The Chp. 11 was not filed for those reason though, but of course Frontier will take any advantage the Chp.11 provides. I hope that helps...
It is very sad, but it is hard to imagine any scenario under which Frontier can make it. The reality is that they are now competing against Southwest on most of their routes. Even before the fuel spike Frontier had a higher cost structure. They are now competing against an airline that is essentially able to buy fuel at half cost. This means Frontier has a massively higher cost structure than their competition. The only way they can stay in business is if they can charge a substantially higher fare then SW. This is not going to happen. Unfortunately, the probability of liquidation is somewhere in the 80-90% range.
a question for any financial people in here.....if frontier filed ch11 due to first data, why do they need financing if sean menke was on cnbc the day they filed saying that money was not the issue and they were ok to ride out the storm, i hope frontier makes it but if cash on hand was not the issue why were they allegedlly hitting the pavement in nyc for money???again im a somewhat fan of them as they have gotten me home when ual could not and i appreciated them taking care of me.
They need financing because fuel costs are up another 15% or so just since the Ch 11 announcement. You cannot underestimate the catastrophic situation undermining every airline because of $130/bbl oil right now. And that includes Southwest, which has a deteriorating fuel hedge situation.
__________________
Brian/\/\ You really should not come to Denver. Cold here. And snowy. And cold. Really, just stay away.
Hmmm. WN (aka SouthWORST!) has been around for over 25 years and still does not dominate the airline spectrum. They have the low rent dominated much like Wal-Mart dominates people living on minimum wage. I couldn't care less what WN charges as I don't fly WN. Also, there is less overlap on F9 than there is on UA. On the flight in from BIL, 2 airport employees were discussing F9 and UA in DEN. If UA's projected flight cuts all go through, F9 could be the biggest carrier out of DEN by the end of the year. Reguardless of what the WN bloggers think, I won't be changing airlines anytime soon and certainly not for WN. That would be like trading the girl next door for a fat lady of the evening with a meth mouth. Will F9 survive? I have no idea but I can guarantee WN gets as much of my money as Wal-Mart gets, $0.
Programs: NW PE, CO PE, DL, UA 1P, AA, CI, IC PLAT AMB
Posts: 1,644
In my book, proven business models need to be rewarded. I
personally have no problem with WN and/or Walmart. You
really are missing out. I am not sure how much it's worth to
support a dying airline. I should know, the flying public did
not support my airline, when it suffered from a deadly cancer.
It proved to be terminal. The handwriting was on the wall for
quite a long time.
__________________
PAN AMERICAN. GONE, BUT NOT FORGOTTEN...........
Hmmm. WN (aka SouthWORST!) has been around for over 25 years and still does not dominate the airline spectrum. They have the low rent dominated much like Wal-Mart dominates people living on minimum wage. I have no idea but I can guarantee WN gets as much of my money as Wal-Mart gets, $0.
Although there are many reasons not to shop Wal-Mart (e.g., damaging effects to local property taxes, reductions in employment, retrograde labor policies, poor treatment of employees at suppliers, etc.), most of those don't apply to WN, which has had pretty decent labor-management relations and well-paid employees. In that regard, WN is much closer to F9's excellent labor-management relations and employee compensation. While WN has chosen a certain type of customer experience that is different from F9's, those two airlines are similar in many ways--certainly much more so than WN and Wal-Mart.
I'd suggest that Wal-Mart can claim to have a good business model insofar as it makes money, which is quite a limited measure of success. Beyond that, it's a mess.
WN and Wal-Mart overlap in 1 area which is a huge negative for me, advertising. WN and Wal-Mart sell almost exclusively on price. I don't do business with people and businesses who sell exclusively on price. This sales mode motivates the business to hide costs or be underhanded to make a profit. My experience has been that this primary price-motivation will cost me more money in the end than if I went with best quality or best value business instead. WN's cattle car loading isn't enjoyable for me and I disliked the slovenly clientle I had to sit with (was a "C") and multi-hub route I was forced to use the one trip I took in 2001. I do agree what WN and F9 overlap on the way they treat hub employees and labor relations unlike Ye Olde Battleaxe of UA.
ExLeftSeat: I support F9 but I don't count on the frequent flyer goodies. F9 is often cheaper or within $50 of UA so I guess my support isn't worth to many $$. I'd love to go to Costa Rica on F9 for free but it's a lot less hassle for me to just save the money instead. Businesses who sell on price can be rewarded (I don't think taxes should penalize profits) but they just won't be rewarded by me.
F9 wasn't near ceasing operations the last time you asked, and they aren't now either.
I agree. Since both threads were started by the same individual with no new information, it's time to merge the two threads..... any moderator here????
and for the OP, please keep it in the original thread.
I suspect that today's economic news will be the beginning of the end for the airline industry as we know it. It doesn't matter if the planes are full; it doesn't matter if the people that work at the airline are nice people.
Frontier and several other airlines are going to run out of money plain and simple. The business model is broken under these economic conditions. The only potential saving grace for this airline is if UAL goes belly up before F9 does. Maybe then they could raise non-stop fares out of DEN (but not so much on connecting flights) in this situation but I'm still skeptical. Even then LUV, with their fuel hedges would prevent this from happening in several markets.
Personally, I disagree with those that do not like Wal-Mart and Southwest.
As to Wal-Mart, when I go to a Wal-Mart store and see a product such as a box of a specific type of crackers for $2.50 and go to a legacy grocery store (Safeway or Albertsons, for example) for $4 or more, and I know that these two boxes were made by the same company and in every other way are exactly the same, I refuse to pay $4 for something that Wal-Mart will sell me for $2.50. I believe that Wal-Mart actually helps the tax base of a community as long as the community meets Wal-Mart half way by not making doing business difficult. Further, Wal-Mart's lower prices help both those with lesser means as well as everyone else. Whether you make minimum wage or a lot more, I don't know why you'd pay $4 for something that you can get for $2.50. Sure, if you need it quick and Safeway is a lot closer to your house than Wal-Mart, you might sometimes pay a little more at Safeway for the convinence factor. At the price of gas today, you might spend more than $1.50 if you have to drive a long way to Wal-Mart. But, if you need 10 or 20 items and you are going to save 50 cents to $2 on each item, then Wal-Mart makes sense.
I am offended by Safeway and Albertsons who can not operate their business as efficiently as Wal-Mart and therefore have the need or the nerve to charge $4 for something that Wal-Mart can sell, at a profit for $2.50.
This "dream" that we are somehow going to keep Safeway and Albertsons around is crazy. While they do have some products that I prefer over Wal-Mart (meats and fresh fish products, respectively), I can not justify paying $4 for those crackers that are $2.50 at Wal-Mart. I make a Wal-Mart run for those products that Wal-Mart does best and I go to the other stores for those products that they do best. This is my duty as a consumer, for me to obtain the best products for me at the lowest possible price. This is the nature of capitalism -- consumers must find what is best for them. Now, if you really believe that Safeway or Albertsons has a better product than Wal-Mart (and, I do for meat and fresh fish products, and sometimes fruits), then you should shop there. But, that same box of Cheez-It crackers? Please tell me how one is different from the other?
Likewise, Southwest delivers essentially the same product (coach seat on a 737) for less than Frontier (coach seat with Direct TV for extra charge unless Ascent or Summit) on an A319/A320. There are various differences about the product (open seating vs. assigned seating, for example) that can be debated. A-list status vs. Ascent/Summit status offer various perks. That is like buying a Chevy vs. a Toyota (wiper control on the left vs. on the right, XM Radio vs. Sirus Radio, etc.).
Depending on where you are based and where you go frequently and how much you go (thus, what status you have), in your particular case Southwest, United or Frontier may be your best alternative. A good example above is Billings. Yeah, Southwest is not a good choice for Billings, as they don't go anywhere in Montana. Spokane is their closest city.
However, back to price, the no change fee policy vs. change fees with Frontier and United do make a big difference.
Some say that Wal-Mart does it by paying its employees less. Well, it is a free market and you don't have to work at Wal-Mart if you don't want to. But, regardless of that, it is also said that Southwest pays its pilots 40% more than United pays similar 737 pilots. (Sorry, I don't know the ratio between Frontier A320 pilots and Southwest 737 pilots) So, even if you don't shop at Wal-Mart, wouldn't you support the airline that pays its pilots better? Especially when you consider that its a whole lot more important to have a good, happy, well-paid pilot (who has your life in his hands).
TalkBoard Member/Moderator: Southwest and JetBlue forums
Join Date: Sep 1999
Location: California
Programs: WN CP & A-list, Interstate BBQ at MEM B17, CO Lifetime Presidents Club
Posts: 9,241
Quote:
Originally Posted by FCfree
As a formerly loyal Frontier flyer on some routes, there is a simple secret that Frontier could use. Get to be more like Southwest. While all the other airlines are nickel-and-diming with bag fees, etc. Southwest isn't charging those fees.
It's not at all clear that adopting bits and pieces of Southwest's approach would improve the financial performance of another airline. Some of the features only work because of other features.
As an example, Southwest does not charge you a change fee. You just pay the new fare using the old funds, plus any increase in fare. To make this work, Southwest has a harsh standby policy. If you want to take a earlier flight than you booked, you need to pay full unrestricted fare, which may be twice your original ticket price. Even if you're only going half an hour earlier. This standby policy is the flip side of the no change fee coin.
Another point is that an airline's policies need to mesh with customer expectations of that airline. It can take years to change expectations, and airlines cannot afford to lose money that long on a change. To a large extent, all companies are stuck with current policies and will not benefit fast enough from making the policies more generous. Alas, this is even true of loyalty programs.
Regardless of what WM (Wal-mart's ticker symbol) and WN (Southworst's flight designation) do, consumers don't have to pay good money to those companies. I don't shop at WM and I don't fly WN. If Safeway, Kroger, F9, and UA all go under, there will always be somewhere else to shop and someone else to fly. In other words, we don't live in a Communist system where I have to put up with service that I feel is inferior. I can chose not to reward companies that I feel provide inferior service. FYI, once TWA and A&P (Atlantic & Pacific Tea Company) seemed destined to rule their prospective worlds of aviation and groceries. Markets changed after WWII and both failed to maintain market share. TWA went under and the A&P is a small shadow of it's former self. Don't be history's sucker. Nobody stays at the top forever.
TalkBoard Member/Moderator: Southwest and JetBlue forums
Join Date: Sep 1999
Location: California
Programs: WN CP & A-list, Interstate BBQ at MEM B17, CO Lifetime Presidents Club
Posts: 9,241
Southwest's newest boarding system, which began November 7, 2007, was a major improvement over the original A/B/C system, which itself was a big improvement over the old plastic cards and crowds mobbing the gate an hour before flight time. There's no more standing in line at the gate now, except for the 2 minutes before you actually board. Your online check-in establishes your boarding priority. 32 flights a year gets you A-list automatic boarding priority. But it's still open seating.
Open seating gets me an aisle seat virtually every time, and almost always an empty middle seat. If you learn the system, you can have very good success getting a good seat even on flights that are 80% to 90% full. (Southwest's flights are less full on average than other airlines' flights.)
I've been flying Southwest for over 10 years. Today's version bears little resemblance to the "Southworst" you may remember. It's vastly improved. Over the same years, the legacy coach experience has degraded. And that includes irregular operations.
I'm all for consumer choice; but you ought to be sure that your decision is fully informed. People who try today's Southwest a few times and learn the system (which you can do beforehand by reading the FAQ) tend to become regulars. Over the next year or so, many customers will need to find a new preferred carrier. They owe it to themselves to try Southwest, if only for the "no change fee" policy, which is the number one advantage in my book.
Back on topic, frequent flyer programs have always had the side effect of pushing marginal carriers over the edge. Business travelers want to be sure that their miles will be usable. A shaky carrier can't meet that criterion. Of course I should talk: I used to fly the old Frontier airlines, and People Express before that.
