Fresh from securing commitment from investment firm Perseus for $75 million in financing, Frontier Airlines hopes to strengthen its liquidity position by a further $80 million through a revised aircraft sale to VTB leasing and other aircraft transactions.
The Denver-based carrier was forced into Chapter 11 reorganization on 11 April after its major credit card processor unexpectedly informed Frontier it was holding back credit card receipts, which the airline said was a major threat to its liquidity.
Late last week Frontier announced its deal with Perseus, and today said it reached an amended agreement with VTB Leasing for the sale of Airbus A319 aircraft for placement on lease with Russian carrier Rossiya Airlines.
Originally VTB agreed to buy two A319s and two A318s from Frontier. Under the new agreement VTB is opting not to take delivery of the two A318s scheduled for August and instead is purchasing six additional A319s from Frontier next month.
The carrier says it has also reached an agreement on other sale and leaseback transactions that will bring the total liquidity boost to $80 million.
Frontier continues to face stiff competition from Southwest Airlines in Denver as it navigates through its reorganization. Last week Southwest CFO Laura Wright during an earnings call explained the carrier has redeployed 67% of its unproductive capacity since last year in developing markets such as San Francisco and Denver, which according to Wright is the carrier's “fastest growing city ever and we are going to be at 115 daily departures to 32 markets by November”.
Source: flightglobal.com's sister premium news site Air Transport Intelligence news