High Fuel Prices Threaten Future Of Frontier Airlines

Some Aviation Consultants Expect Another Chapter 11 Filing

High fuel prices continue to hammer Frontier Airlines.

Parent Republic Airways is trying to stem the red ink at Frontier, which reported a $55 million loss in the first quarter.

Pilots are being asked to forego future raises and to give up some of their benefits.

Bryan Bedford, the CEO of Republic, is trying to raise some much needed capital, but sources tell 7NEWS that task is proving to be more difficult than expected, which raises the question: Is Frontier in danger of ending up in bankruptcy court again?

Aviation safety consultant Steven Cowell, of SRC Aviation, LLC, said he anticipates such a filing.

“It remains to be seen whether they can reorganize their debt and succeed,” Cowell said.

Cowell said if there is a Chapter 11 filing, the airline would continue flying and passengers would notice very little difference although they may experience some inconvenience.

“Unfortunately, bankruptcies are very, very demoralizing,” he said. “People (employees) will tend to utilize their sick leave. You might see aircraft being short-staffed. And there’s a possibility of cancellations because of the aircraft not being staffed properly.”

“I hope they stay in business,” said Madison, Wis., resident Katherine Bonus. “I think their service is great.”

Bonus, who flies into Denver four times a year to see her grandchildren, said she worries what will happen to ticket prices if Frontier goes out of business.

“They’re going to go up,” she said. “I won’t get to come to Denver as often as I do to see my grandchildren.”

It’s not just passengers who are worried, so are airport officials.

“With an industry like the airlines, you always have to be concerned about the volatility of it,” said Patrick Heck, chief financial officer at DIA.

Heck said DIA is constantly looking at its mix of carriers and looking at what scenarios could happen.

He said one of the scenarios they’ve considered is losing one of the three hub carriers.

“We’ve built up a fairly strong cash reserve for that type of eventuality,” Heck said.

Heck added that industry uncertainty has led them to postpone expanding the number of gates on some concourses.

“We’ve seen other airports shutter parts of the airport when they’ve had major pull downs of carriers,” Heck said. “And we can do similar things to help limit our operating and maintenance expense.”

Despite concern about Frontier, Heck said passengers are apparently feeling more confident about the economy.

“They’re spending more money,” he said. “They’re parking in the garages, which cost more. And they’re purchasing more from restaurants and other businesses.”

And Heck said the passenger count has grown every year at DIA, except in 2009.

“We’ve had robust growth,” he said. “The question is, can it be sustained?”

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