Soaring Through Bankruptcy
Denver’s Frontier Airlines Encroach Upon a New One
The business of Frontier Airlines has increased 20 fold since this month last 2008. To what can Denver’s own Frontier Airlines owe their mammoth turnaround? April of 2008, Frontier filed for Chapter 11 bankruptcy protection. They’ve found a benevolent new ownership and direction following a well-publicized bankruptcy auction: Southwest Airlines lost a bid at Frontier’s bankruptcy auction to Republic Airlines. Partially thanks to the new ownership, Frontier is ready to emerge from their long bankruptcy next month.
Business critics are throwing verbal daggers at both Southwest and Frontier for both losing and acquiring the company, respectively. Southwest was criticized for participating in the bankruptcy auction too late in the game, having lost to airline impulse buyers Republic who have well-honed game plans for bankruptcy auctions. Republic Airlines have been on somewhat of a bankruptcy auction acquisition spree, risky for a being a small commuter parent company. While commuter parents like Republic Airlines usually run in association with big airlines like American and Midwest Airlines, those big airlines have received fewer contract gigs and subsequent smaller slices of their profit pie.
Sure, the profits look good: but the state of Denver’s officials are concerned that old Frontier Airlines employees will be sideswiped in the passing of the Frontier hands. $1 billion in debt doesn’t just fly away into the horizon and Republic Airlines bought Frontier at a $113.6 million dollar price tag, also funneling tens of millions of dollars into the billion dollar debt: judging by the sea change in Frontier’s profits post-bankruptcy, the recent acquisition is expected to prolong Frontier’s post-bankruptcy winning streak. Denver officials are aware that cutting long-held staff would be a quick way to cover the rest of Frontier’s leftover Chapter 11 bankruptcy debts.
Businesses filing for Chapter 11 can bounce back. The reorganization may not be seamless with many detractors offering an unsolicited opinion, but with a sky high debt like Frontier’s $1 billion in arrears, it’s probably the best option. Call a member of our bankruptcy-focused legal team to find out how bankruptcy can truly help you cut your losses: call us at 1-800-260-1402 today!
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