Frontier Airlines has just announced that pilots have approved a cost-saving agreement, with 89.6 percent offering their approval.
That's not the end of the austerity plan, but in a statement, Frontier CEO Bryan Bedford says the carrier is more than halfway toward its "profitability improvement goal" of $120 million. Read the release below, followed by our earlier coverage.
Frontier Airline Pilots Association Members Approve Agreement With Frontier Airlines
Frontier more than halfway to profitability improvement goal
DENVER, June 17, 2011 -- Frontier Airlines today announced that the membership of the Frontier Airline Pilots Association (FAPA) overwhelmingly ratified an agreement approving their participation in the restructuring of Frontier Airlines. With 89% of the pilots participating, the vote was 498 to 58, or 89.6% in favor and 10.4% opposed. Frontier is a wholly owned subsidiary of Republic Airways Holdings, Inc. (NASDAQ: RJET).
"This agreement is an important element of our larger plan to secure the future of Frontier Airlines," said Bryan Bedford, Chairman, President and CEO of Frontier. "The new pilot agreement combined with other savings we have been able to secure in recent weeks bring us more than halfway to our annual profitability improvement goal of $120 million. As a result of these accomplishments, our Board will move forward with its commitment to invest additional liquidity in Frontier to fund the airlines operations and future growth."
Bedford stressed that "It's business as usual at Frontier," noting that the airline experienced some of its highest booking days of the year over the past week. "This is a tribute to all of our employees, and also to our loyal customers who realize the importance of preserving Frontier's low fares and helping to secure the jobs of thousands of Frontier employees who live in their communities."
"I want to personally thank FAPA's leadership -- Jeff Thomas, Scott Gould and Mike Haffling - for their commitment and contribution to a process that led to the development and ratification of this agreement. I also want to express my sincere gratitude to the Frontier pilots who realized the value of this agreement to FAPA members, their co-workers and the communities we serve."
"We understand the significant challenges Frontier faces due to soaring energy prices," said FAPA President Jeff Thomas. "We believe the Frontier pilots' investment in Frontier Airlines will be beneficial to our pilots, our fellow Frontier employees, and the communities and customers we serve. We appreciate Republic leadership's recognizing the issues and interests of our pilots as well as their constructive, cooperative efforts in crafting this agreement. We are confident this agreement will allow Frontier to flourish and grow in the future."
The Company continues to negotiate agreements with key stakeholders, including aircraft lessors, significant suppliers and distribution partners. "We are confident that those efforts will yield the remaining business improvements necessary to achieve our goal of $120 million in annual profitability improvement." Bedford concluded.
About Frontier Airlines
Frontier Airlines is a wholly owned subsidiary of Republic Airways Holdings, Inc. (NASDAQ: RJET), an airline holding company that also owns Chautauqua Airlines, Republic Airlines and Shuttle America. Currently in its 17th year of operations, Frontier employs more than 5,500 aviation professionals and operates more than 550 daily flights from its hubs at Denver International Airport, Milwaukee's General Mitchell International Airport and Kansas City International Airport. Frontier offers routes to more than 80 destinations in the United States, Mexico and Costa Rica.
Original item, 8:16 a.m. June 17: Last October, Frontier Airlines CEO Bryan Bedford appeared on Undercover Boss -- and nearly got a shit shower in the process. But the crap could really hit the fan today.
As noted by NPR, Bedford has told pilots that unless they offer contractual concessions in a vote whose results are expected to be made public today, Frontier will no longer be a viable business. But whose fault is that?
In the NPR piece accessible below, airline consultant Mike Boyd puts much of the blame on Republic Airways Holdings, which acquired Frontier back in 2009. Boyd believes Republic's decision to split the operation between Colorado and Milwaukee undermined Denverites' loyalty to the brand -- something that may have sown the seeds for Frontier's $55 million loss in the first quarter of this year.
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Boyd's got a point -- but speaking from a personal standpoint, economics is a more important factor. I've flown Frontier plenty over the years and always had good experiences -- but when the airline started charging luggage fees, I switched over to Southwest thanks to the carrier's two-bags-fly-free approach. The policy was key this past month, when my wife and I flew my son back from Washington, D.C. following his college graduation, along with nine bags (two per person that we checked, one apiece that we carried on) stuffed with belongings he'd accumulated over the past four years. Doing the same thing on Frontier would have cost us hundreds of dollars more. For us, that was the real price of brand loyalty.
Listen to this morning's NPR report below: