DENVER, April 11 /PRNewswire-FirstCall/ — Frontier Airlines Holdings, Inc. (Nasdaq: FRNT – News) today announced that, following an unexpected attempt by its principal credit card processor to substantially increase a “holdback” of customer receipts, which threatened to severely impact Frontier’s liquidity, Frontier and its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.Frontier intends to continue normal business operations today and throughout its reorganization process. Specifically, it expects to continue to:
— Operate its full schedule of flights;
— Honor tickets and reservations and provide refunds and exchanges as usual;
— Maintain its EarlyReturns frequent flyer program and other award- winning customer service programs;
— Provide employee wages, healthcare coverage, vacation, sick leave and similar benefits without interruption; and,
— Pay suppliers for goods and services received during the reorganization process.
Full story can be found here.
This is obviously going to get very messy. With airlines already operating at near maximum efficiency, there’s very little left to reorganize. The main thing that needs to be reorganized is the fuel situation, and that’s totally outside the control of the airlines. I guess we’ll see soon enough, but I give them a few weeks at most.
Gotta say, things are looking good for United right now. They have their biggest competitor in ORD by the ba%&#, and who knows, maybe they’ll be totally dominating DEN very soon. Too funny (yes, I’m kidding with this sentence, but still, they seem to be the one that has almost benefitted from all of this, at least this week)!
Man, what an amazing week in the airline industry for the second week straight. Can’t wait to see what next week brings.