When will Frontier Cease Operations?
 

Any guess how long Frontier can operate in the current conditions?..Allready Bankrupt how much longer can they drag this out? SouthWest Airlines is waiting in the wing to "eat thier lunch"..I think its only a matter of time (short time) and Frontier will fly into the history books as another failed carrier..Any other opinions??..@:-)

According to what I hear from the Denver media, F9 is actually gaining seat-miles flown, at least from the last report I saw. Reading between the lines from the quotes made by F9 media contacts, if WN is living off of the business missing from F9, they are not doing well! It looks like WN is gaining flyers from UA.

Things must look alot different concerning F9 when seen from here in Denver rather than as seen from other parts of the US. The feeling in general here is that there are still many, many loyal F9 flyers, and that F9 will turn out to be just fine, or to say it another way, if UA could get out of Chapter 11, F9 will too!

Numbers of loyal fliers cannot save F9 if fuel prices continue to rise. And F9 doesn't have a good cushion of cash reserves.

For now, I believe that "watchful waiting" is in order. I'm continuing to buy F9 tix, mainly because they're considerably cheaper than UA in the markets I'm traveling right now. I'm not booking more than a couple weeks ahead, however.

Frontier may be able to survive the summer, but when fall arrives and seasonal revenue declines occur, plus likely even higher fuel prices...I think F9's survival odds are maybe 50%.

It's not their fault; it's all about fuel prices at this point.

I have 8 flights I'm taking on F9 between this coming Thursday and mid-July. I will continue to fly them until they get out of Chapter 11. If they go under I guess I will have to start taking Amtrak as I really dislike UA and WN.

Dittos to Brian
 

F9 is also opening a few more "resort" routes such as DEN-BZN. For less than a 2 week window, DEN-BZN was over $380 while DEN-BIL was $177. BIL has much more business traffic than BZN reguardless of what people of BZN think. People fly in and out of BZN because they're tourists, non-locals or are doing something with MSU or Right Now Technologies. My friends who live in BZN fly out of BIL due to costs. I think F9 will be playing the waiting game on the fuel market but I don't know of any other DEN based folks quiting F9 because of the bankruptcy. Barclays, Chase and First Data should burn for this.

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.

Frontier would be quite surprised how much additional revenue they could make if they dropped the change fees. They could still charge $5 for Direct TV

In my opinion, you're bizarrely obsessed with this.

http://flyertalk.com/forum/showthrea...781&highlight=

F9 wasn't near ceasing operations the last time you asked, and they aren't now either.

Was thinking the same thing myself.

Seriously, there doesn't seem to be any sense that they're in major risk of ceasing ops. They're cutting costs more, fares are up, and kudo's to the management team for taking a a 20 percent pay cut while asking the employees for 10. Also, UA is continuing to reduce capacity.

On the other hand, the becoming just like any other airline is more of a threat. Hope they don't continue to go that way.

I have been on 3 F9 flights since they filed BK. My fares were a little higher than I usually pay and all of the flights were 90%+ load factors. They don't seem to be lacking for business in my experience.

It doesnt matter how full the flights are if your loosing $$$..Simple math says you can only loose money for so long..my question is how long? @:-)@:-) SilverJet called it quits today..just wondering if you think Frontier is next or it will be another airline?

Take another look at my post. I wasn't saying anything abpout profitability. I was merely anecdotally affirming what F9 has been reporting: passenger numbers and yields are strong despite the BK

Good article in the Denver Post on Friday:

http://www.rockymountainnews.com/new...-to-oil-costs/

Sounds like they should be OK through the summer even if they don't secure additional financing, after that they need to make a deal with someone to get additional cash (or perhaps sell more aircraft?)

But if Oil continues to rise, all the airlines are going to be in trouble, not just F9. The question is, will the eventual government bail-out save the little-guys, or just the big carriers?

:rolleyes:

They just worked out a contract with First Data Resources (their credit card processor), who drove them into bankruptcy in the first place. Keep in mind, the only reason that Frontier declared bankruptcy was because of a unilateral change in the credit card holdback percentage by First Data Resources. The only option Frontier had to freeze the contract and force a negotiation was bankrupcy.

Frontier was not driven into bankruptcy by business fundamentals (although the business fundamentals are pretty grim for the entire industry right now). They were driven into bankruptcy by ONE supplier. I'd be fully confident booking them in the interim.

Yes. In my opinion, you seem to be anxious to see this airline fail. I'd be curious to know why.

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...

Time is running out
 

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.

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.

Choice and survival of F9
 

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.

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.

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
 

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.

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).

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.

Consumer choice
 

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.

Guess again. Wal-mart's ticker is (and always has been) WMT.

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.

point taken
 

I didn't fact check myself on this one. I thought the WM(T) and WN made a good point on how similar the companies strategies are.

I agree that you don't have to pay money to either Wal-Mart or Southwest if you don't want to. That is the great thing about America and competition between companies keeps things better. That is why Russia and Aeroflot was a bad way to go.

What confuses me is why you would pay $4 for a box of Cheez-it Crackers at Safeway when that EXACT same box is $2.50 at Wal-Mart? Once in a while, when Safeway is closer than Wal-Mart, and you save the gas, sure, I get it. On a routine basis? Safeway's store really is that much prettier than Wal-Mart's and that really adds value to you? Safeway's staff really is that much more helpful?

Likewise, Southwest's coach seat is pretty much the same as Frontier's coach seat (especially now that Frontier went to leather, like Southwest).

Web site www.SeatGuru.com reports 32-33" of seat pitch for Southwest vs. 32" of seat pitch on Frontier (31" on an ERJ). Seat width is 17" at Southwest and 18" at Frontier. Note that there is extra pitch and width on Southwest at rows 11 and 12 including the most coveted 11E and 12F.

Yes, Frontier has that DirectTV screen in front of you. Is it worth an extra $30 each way plus the $5.99 they charge for DirectTV to watch TV? That is a personal decision. Maybe for you it is. It isn't for me. Paying $36 to watch a couple of hours of TV? I'm confused, especially when you say "Free your mind and throw a brick through your TV" Don't throw a brick at the Frontier DirectTV -- I don't think Frontier would like that. I think you might even be greeted by the TSA or other police at your destination. (What is the policy for carrying on bricks? :D)

Add to that $36 the probability of a change times the change fee. So if you change 1 out of 5 flights and the change fee is $100, that is an extra $20 per flight. Now is DirectTV worth $56? (If you frequently do same day changes, then yes, add the probability of same day changes times the upcharge from "Wanna-get-Away" fare to full fare to Southwest's price)

Checking a second bag? Add $25. Now is DirectTV worth $81?

Add another $3 for a full bottle of coke that you have to bring on board (Frontier only gives a cup or two) At another $2-4 for snacks you have to bring on board.

Now, going DEN-BIL? Sure, take Frontier. I wouldn't go to GEG and drive it. I don't even think WN has DEN-GEG non-stop.

Flying enough to non-Southwest cities that using Frontier a few times when you could have gone with Southwest so you get Ascent/Summit status? OK, I get that. (I believe that Summit status even eliminates the change fee) But flying mostly with Frontier on Southwest routes (e.g. DEN-LAS) and staying with Frontier, because they have cute animals on their tails? I don't get that.

Assigned seating? OK, I get that to some degree. But, having a higher probability of an open middle? That is as close to first class as you can get on either WN or F9. On WN I can work around the open vs. assigned seating thing either by checking in 24 hours before the flight or getting on the A-list. With A-list, I've got a good shot at those exit rows that are reserved for only the most elite (Summit or 1P/1K at United) The new Southwest boarding procedure (started in Nov 2007) eliminates the cattle call at the gate. Both airlines still have a certain degree of "gate lice" that try to board in the first group when they are assigned group 3 or group C.

One thing that really soured me on Frontier was the Christmas 2006 big snow storm mess. I offered Frontier a chance to fly me out early before the storm. United was already giving free changes. But not Frontier. As one Frontier agent told me "we are not United." Southwest sold me a last minute ticket for virtually the same price as a 4-month advance purchase on Frontier. Full story: http://www.flyertalk.com/forum/showthread.php?t=643396 End result: Frontier lost about $400 of revenue and Southwest gained $400 of revenue. Would have booked with Southwest originally but they weren't flying non-stop at that time on that city pair. They are now. Odds are very high Southwest will be getting my business this Christmas. I'll be booking that on June 26, when the schedule opens for Southwest, confident that if there should be any price decreases, Southwest will give me a ticketless travel funds refund (as opposed to Frontier, who, if they drop the price, won't give any refund at all).

If how the company pays its employees is a factor in the Wal-Mart/Safeway decision, then the edge goes to Southwest, who, according to a pilot on the United FT board, pays its 737 pilots 40% more than United. The pilot has your life in his hands -- the Wal-Mart/Safeway employee, at most, has your eggs.

According to http://airlinepilotcentral.com/ a Frontier captain with 5 years of experience makes $133 an hour. A United A320 or 737 captain with 5 years of experience makes $127 an hour. A Southwest captain with 5 years experience makes $183 an hour. (As an aside, a United 747/777 captain with 5 years experience makes $180 an hour -- $3 an hour less than a Southwest 737 captain!) I can't speak to the differences in the benefit packages, although I would think that both have health insurance. United might, at one time, have had a better pension package, although they have to stay in business to give that, otherwise, the pension system reverts to the minimum payments guaranteed by the PBGC. A pilot could do deferred comp of that extra $50 per hour and likely be a lot better off.

I heard today from some extremely reliable sources that Frontier is going to cease ops within the next two weeks and file for Chapter 7 BK. I heard that they have been working on the Golden Parachutes for upper management and possibly some sort of restituion for the hourly employees.

Joe

Interesting first post. Odd that they would reaffirm ALL their aircraft leases and catch up on all the payments while simultaneously working on their "golden parachutes" and preparing a shutdown. http://www.denverpost.com/business/ci_9544950.

Oh those crafty devils at Frontier. Not only did they reaffirm all their aicraft contracts, they also reached a new deal with their credit card processor.http://www.denverpost.com/airlines/ci_9428158 I guess it was all an elaborate hoax to make it look like they were making progress on their bankruptcy issues to cover up the fact that they were cleaning out the till to fund their "golden parachutes" and preparing to lock the doors. We are so fortunate to have reliable inside information on this board from first time posters so that we do not fall for this corporate charade.

Shutting down during the summer travel season would be unprecedented, wouldn't it? Although I suppose at today's fuel prices and today's ticket prices, it's possible that airlines can't make money even in the summer. Especially since summer travelers are low fare seeking leisure travelers, and summer travel tickets are sold (and the prices set) months earlier.

Today's equation is different: airlines cannot survive without a heavy percentage of high-fare business travelers. And today's load factors are high all year. So the old rule about summer being the time to make the whole year's profit may not apply.

Oil prices are up again this morning. It's a complete nightmare for airlines. Anything is possible, except, it seems, making a profit.

This seems to be a favorite question of the OP.

http://www.flyertalk.com/forum/showthread.php?t=811958

Or maybe he has some short positions.

Well I have 3 independent very reliable sources. If I am wrong, I am wrong but I dont believe that will be the case! Southwest is getting to ramp up big time at DIA and they are going to be opening up a lot of maintenance positions in the very near future as well! I will be the first to say sorry if I was wrong and maybe the dates will be off by a few weeks with my timing but I am sure some of you will be eating crow very soon!

Joe

Eating crow? Why? I do not purport to know the future. All I am doing is presenting the reported facts concerning the Frontier banruptcy, with links to the sources. Since you are a new poster and we have absolutely no way to evaluate the credibility of your unidentified sources, I will stick with what is publicly reported and verifiable rather than rumors.

In most workplaces, the office grapevine is more reliable than official statements. YMMV.