From the Frontier (Management) Perspective...


Apparently a "terse" writer
Staff member
Dear Team Members,

I am pleased to tell you that we have reached a major milestone in our ongoing efforts to position Frontier to emerge from Chapter 11 bankruptcy later this year as a competitive, sustainable airline.

Frontier has entered into an investment agreement with Republic Airways Holdings, Inc. under which Republic will be the equity sponsor for our plan of reorganization. Republic is a recognized and award-winning airline holding company with whom we have worked in the past. As you may recall, Republic Airlines offered regional service for Frontier from January 2007 through April 2008. Earlier this year, Republic agreed to provide us with $40 million in debtor-in-possession (DIP) financing.

If our plan of reorganization is implemented and approved as proposed, Frontier would become a wholly-owned subsidiary of Republic when we exit from bankruptcy later this year. Under the plan, we would operate Frontier Airlines and Lynx Aviation as usual, but with Republic as our corporate parent.

This agreement represents a major milestone as we position Frontier to emerge from bankruptcy as a competitive, sustainable airline. Through our reorganization process, we have transformed Frontier Airlines and Lynx Aviation into two of the most efficient operating carriers in North America. Additionally, we have diversified our revenue generation through the introduction of ancillary charges and our branded AirFairs product. The culmination of all this extraordinary work is that, even in the worst economic environment in the last 50 years, we posted an operating profit for each of the past six months as well as a net profit for the past two quarters.

With these profits, many of you may be asking why we need to exit with a partner instead of on a stand-alone basis. A stand-alone model would not allow us the same opportunity for growth nor the necessary financial strength to be a long-term player in this industry, particularly given the current revenue environment and volatility in fuel costs. With Republic, we have an investor willing to put a significant amount of cash into a reorganized Frontier to help us meet our exit liquidity requirements as well as fortify our balance sheet for the long haul.

Clearly, this is a positive development for Frontier and our customers, communities and employees. While our restructuring is not yet complete, our exit from bankruptcy is now in sight.

Thanks in large part to your hard work and sacrifice during our restructuring, Frontier and Lynx are among the industry’s low-cost leaders. Republic believes in our company, sees our potential and wants to invest in our future. Our agreement with Republic allows our customers and communities to continue to receive the outstanding service for which Frontier is known, while preserving the jobs of most of our employees.

We are excited about this combination because our companies share similar values and cultures. We have a similar approach to our business, our customers and our people. Republic’s mission mirrors ours — to “provide the safest, most reliable, and convenient travel experience for our customers, a positive and rewarding work environment for our employees, and develop mutually beneficial working relationships with our business partners.” The Republic family currently consists of Chautauqua Airlines, Republic Airlines and Shuttle America. You can read more facts about Republic on its Web site at:

This proposed combination won’t happen overnight. We must continue to follow the required bankruptcy process over the next several months. We will implement the transaction with Republic as part of our plan of reorganization, subject to bankruptcy court approval and various conditions, including any higher and better proposals from other potential bidders under a court-supervised auction. We have scheduled a hearing for court approval of the investment agreement and the proposed auction procedures for July 13. Certain creditor groups must also approve the plan before we can proceed.

Once we receive the required creditor approvals, the court will hold a hearing to consider the plan. If the court approves the plan, we will implement it and expect to be able to exit our Chapter 11 proceedings in fall 2009.

As I have told you previously, the best thing that you can do to ensure we successfully complete this process and position ourselves for the future is to continue focusing on safety, keeping costs down and providing the outstanding customer service our customers have come to expect from Frontier.

I will hold an employee meeting later this week to discuss today’s announcement and answer whatever questions I can. Look for an F9FYI bulletin with date, time and information on how to tune in to the audio webcast of the meeting.

In closing, I would like to once again offer my sincere thanks to you and your families for your sacrifice and dedication during these extraordinary times. You are truly the heart and soul of our company. All that you do each and every day has made Frontier and Lynx the remarkable companies they are and allowed us to reach this milestone. I hope that each of you shares my excitement about today’s good news.

All the best,


For more information: FAQ, Frontier/Republic history, Republic Airways fact sheet