Friday, April 11, 2008
Frontier Airlines files for Chapter 11 protection
Wichita Business Journal - by Denver Business Journal
Frontier Airlines filed for Chapter 11 bankruptcy late Thursday in federal bankruptcy court in New York City in response to what the airline said was a threat to its liquidity resulting from actions by its principal credit card processor. On its website, the airline said it would continue its full schedule of flights and will honor tickets and reservations and provide refunds and exchanges under its standard policies. Frontier offers three flights a day to Denver from Wichita's Mid-Continent Airport using its Lynx carrier. Its frequent flyer program and customer service programs would remain unaffected, as will wages and benefits, the company said. Suppliers and other vendors payments would be unaffected, the airline said.
"Frontier is committed to delivering exceptional customer service and we intend to continue delivering on that promise with normal operations throughout our reorganization process," said Sean Menke, Frontier President and CEO. "To be clear, we filed for very different reasons than those of other recent carriers, and our customers and employees can be confident that we intend to keep on flying and providing outstanding service and products." The airline said it made the decision to file for Chapter 11 bankruptcy after its credit processor changed its fee schedule, specifically its hold back of customer receipts. That, the airline said, severely threatened its liquidity.
"Given the recent progress we have made towards strengthening our balance sheet and obtaining additional financing, it is truly unfortunate that we have had to take this action," Menke said. The company listed assets of $98.3 million and debts of $92.2 million as of Dec. 31, 2007. Its top five creditors are Wells Fargo $93,491,208.79; the City & County of Denver $2,408,887.38; Total Petrochemicals Inc. $2,366,875.29; Airport Revenue Fund $1,817,919.59; World Fuel Services Inc. - Wire $1,557,138.66, according to the bankruptcy filing. Frontier Airlines Holdings, Inc. common stock is traded on NASDAQ's National Market under the symbol FRNT.