You knew it wouldn’t be long before the “Save Frontier” groups got together to rally for their airline. There are now a few efforts going, but I’m afraid that none of these are likely to have any impact.
Initial bids to bring Frontier out of bankruptcy were due by August 3 and only the Republic and Southwest bids were received. Assuming that both turn in complete final bids by the end of today, then the judge will have to decide which of the two is the winner.
The Republic bid keeps Frontier as a separate brand, so that’s the one that Frontier employees and fans are rallying around. An employee rally was organized last week, but turnout was 150 people at best (and probably less). At least one customer has taken the initiative to put out SaveFrontier.org (thanks, Things in the Sky). So will any of these help?
I doubt it. The judge is supposed to do what’s best for the airline’s creditors. Either of these bids is likely to produce a decent ending for the airline (though very different ones) but a higher price is better for the creditors. So, if you want to save Frontier, don’t bother with a rally or protest. Instead, get on an airplane to Indianapolis (Frontier and United will both you get there nonstop) and start talking to Republic management about increasing their bid.
If you’re an employee, you could talk about concessions and wage reductions. The more you can do to reduce costs, the more Republic could consider increasing their bid, I assume. Of course, if Southwest wants to win this one, they will. So your efforts could be futile, but it has a better shot at having an impact than just marching around.
Southwest’s strong cash position provides it with a distinct advantage in the bidding. Hard to believe that in this environment they are able to increase their market share in Denver for such a modest amount. Gosh, $113 million (plus whatever the bidding takes them to) must seem really cheap. CF, help me put this in terms of new 737s. How much does one of those things go for? Let’s do acqusition analysis as measured by a per aircraft price.
Anyway, for that seemingly nominal coin, they “finish” their ramp up at Denver, get slots in New York to add to those they already have from ATA, get some routes they don’t currently have like Mexico and Alaska, and probably have some assets to sell (like Frontier’s non-737 fleet). Plus, they get to keep doing what they were doing which is to spread their own existing overcapacity over a larger footprint much as they have in 2009 with the 4 cities they added. No SWA layoffs, no parked SWA 737 planes.
Gotta feel like a potential big win to the folks in Dallas. (You mean we only have to spend what to get what?)
Let’s see. Option A, become an employee for one of the world’s consistently most successful air carriers, Option B, stay employed with a company being kept alive by a relatively young regional carrier with no experience running the full business chain of an airline but with pretty animal tails. Of course we pick B.
Anyone know what the creditors want?
I can by all means understand the hometown pride in wanting a “local” airline. MSP is my home and through a lifetime of love/hate with NW it’s still sad to see the red tails slowly vanish from the skies. Disregarding my opinion of that merger I have to agree with Cranky’s take on the Frontier situation. They are in bankruptcy and the best (most profitable) option for the creditors should win.
Personally, as a member of the flying public that has no “horse in this game” I’m inclined to think a WN take over would add additional benefits of more destinations/larger route network, in lieu of a Republic subsidiary remaining much the same as-is today.
In today’s economy I imagine Frontier employees would love the security of working for someone like WN, although that option will certinaly not include everyone. Then again, if Republic wins what are the options of Frontier saying profitable in the long term, especially if WN decides to get even more competitive at DEN? Slim to none IMO.
Creditors just want their cash for providing goods and services to Frontier
When are you going to rip CO and XE for their debacle at RST on Friday night?
Hundreds of comments already on both Ben’s McPaper blog and the HOU Chronicle.
I’d like to see a stronger competitor to Southwest, as they keep getting bigger and bigger, eventually they’ll be the one that people are wanting price relief from.
That being said I’m not quite sure a Frontier/Republic/Midwest combination would be that great.
David SFeastbay wrote:
The creditors want as much money as they can get. They won’t get anywhere near making $1 for each $1, but they will take whomever gives them the best offer.
I’m trying to get more information from ExpressJet first. I could regurgitate all the details that are being floated elsewhere, but I don’t have much else to add. Yeah, it really, really sucked. Hopefully ExpressJet will give me more details to shed some light on what exactly happened.
From what I’ve gathered (and I do have a bit of a horse in the race, being a SWA employee) the Airbus fleet is only leased and all the leases will expire within two years. So, the bidding price does not inclulde the value of anything but leased airplanes, but the advantage is they can be replaced without having to sell an aircraft at a loss. One estimate put the value of the gates in DEN alone at $300 million…so purchasing Frontier should be a no-brainer. Add to that all the office and hanger space in DEN (which would be needed for a DEN base for SWA which was going to happen eventually) plus more gates for LGA, adding cities like ATL, Anchorage, Charlotte, 5 destinatioins in Mexico and one in Costa Rica (the Mexico thing replaces the codeshare with Volaris that the pilots hated)…well, it seems too easy. The biggest problems will be Lynx and employee integration. Maybe Republic would take Lynx for cheap and save SWA the headache. From what I’ve gathered by running Frontier independantly and then shrinking them as aircraft leases expire would allow SWA to put Frontier employees on the bottom of the seniority list. The advantage is you don’t upset your tried-and-true workgroup and if any Frontier employees are too angry they will find jobs elsewhere. If they stay on with SWA they might be angry for a few years, but come out ahead in the long run. The employees from the Morris buyout were angry for a year or two, but are happy to be where they are now. After all these wage concessions, being put on the bottom of the list at SWA should be decent pay with the potential for a pretty good (and stable) wage in the future. I know a lot of senior folks at other airlines would gladly make the switch for a guarenteed job at SWA. So far SWA has had no lay-offs and no wage concessions, ever!
There is a lot of interesting news today on the Southwest bid. I wasn’t planning on writing about this tomorrow, but I think there’s too much to ignore. So stay tuned for that.
Apparently the final bid was for $170 million.
sure will miss seeing animals on my way out of midway. i cant imagine anymore WN jets sitting at anymore gates at midway. First ATA, now Frontier? All they need is Air Tran, and they’ll own Midway. With the Northwest/Delta merger, The only airlines out of there are Porter(one flight), Air Tran, and Delta.