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Frontier Flies Into Chapter 11

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By TED JACKOVICS

The Tampa Tribune

Published: April 12, 2008

TAMPA - Frontier Airlines filed for Chapter 11 bankruptcy protection on Friday, but told passengers it intends to provide uninterrupted service including its reservations and frequent-flier programs.

Frontier's daily nonstop round-trip flight between Tampa International Airport and Denver was not affected Friday. The airline also flies a second Denver-Tampa round trip on Mondays.

"Frontier has a lot of competition here," said Louis Miller, Tampa International's director. "They are a good company, and we hope they can do well."

United Airlines low-cost subsidiary Ted offers three daily Tampa-Denver round trips and Southwest Airlines offers one. Both Southwest and United provide intense competition to Frontier at its headquarters city in Denver, where Frontier ranks second to United in market share. It ranks 16th at Tampa International.

Frontier said in a statement that the bankruptcy filing was a result of its principal credit card processor, First Data Corp., substantially increasing its "holdback" of customer receipts, which would have "put severe restraints on Frontier's liquidity."

Frontier won't follow the same route as Aloha Airlines, ATA Airlines or Skybus - three airlines that ceased operations after filing bankruptcy petitions in the past two weeks.

"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," said Sean Menke, Frontier president and chief executive.

Calyon Securities analyst Ray Neidl told CNNMoney.com the bankruptcy filing was no surprise but happened sooner than expected.

"We do not see a future for Frontier, as it faces tough competition in Denver from United on the network side and Southwest on the low-cost side," Neidl said.

Frontier, like numerous other airlines, has been mentioned as a merger candidate, in particular with JetBlue Airways, which also has a modern fleet and a cadre of loyal passengers.

The airline that got its start in 1994 and is noted for its array of animal logos on its aircraft tails flies 62 aircraft and has 6,000 employees, 5,000 in Denver.

Reporter Ted Jackovics can be reached at tjackovics@tampatrib.com or (813) 259-7817.

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