Frontier just will not die – at least not yet. And the carrier, based in Denver and bankrupt since April, seems to be attracting a lot of support. For instance, it just won its reorganization judge’s permission to accept $30 million in DIP financing from three creditors, a chunk of money that may well be followed by $45 million more from the three. Republic Airways joined Credit Suisse and AQR Capital of Greenwich, Ct. (for Applied Quantitive Research), in lining up the money after Frontier decided to walk away from a $75-million package arranged by venture capitalists Perseus LLC. That package depended on the carrier renegotiating wages and work rules with its unions. But the unions had already given paybacks and taken cuts, and the Teamsters objected.
Frontier was not deterred.
Frontier had the new package lined up over a weekend. It may still have to get some union gives, though the new deal has a better interest rate and does not give an equity stake to the lender. So here Left Field has to quote a couple of off-the-record comments made by two guys, one of them a well-placed analyst and the other a high or at least high-ranking officer of another airline (which does not happen to be United). WHY? Like them, we like Frontier and think they have a good team and a good product, but the simple, basic, ineluctable externally verifiable fact is that no hub city has ever supported three airlines and very few low-cost carriers have ever co-existed alongside Southwest. And the other airline at Denver, United, is not going to go away. So one does have to ask, WHY?