Full of LUV
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Always thought it was ironic Bedford didn't do "undercover boss" with Chataqua or RAH, he probably would have gotten different feedback than with the Frontier product.
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Always thought it was ironic Bedford didn't do "undercover boss" with Chataqua or RAH, he probably would have gotten different feedback than with the Frontier product.
Here come the pay cuts...
Good afternoon. I hope this letter finds you and your families well ahead of a soggy Memorial Day weekend.
As difficult and insecure as the airline industry feels with oil over $100 per barrel, when I stop and take a minute to view life from the perspective of the devastation caused by tornados in Tuscaloosa, Ala. and Joplin, Mo., or the flood damage along the Mississippi, I count my blessings. Our thoughts and prayers are with all the families who lost loved ones and all those who have lost homes over the past several weeks. May God give them strength to persevere during these challenging times.
Of course this is also the weekend we set aside each year to remember our fallen heroes in our nation’s military who have made the greatest sacrifice to preserve our security and freedom and to bring the hope of liberty to oppressed peoples far away. Right now it feels like our nation is struggling with political gridlock and polarized liberal and conservative agendas; however, with all the failings of our politics you only have to turn on CNN and see people being gunned down in Syria and Yemen to more fully appreciate what we often seem to take for granted: our Bill of Rights. Please take a minute to pray for the safety of our soldiers and their families around the globe.
(****the above two paragraphs mean, hey look, I'm not such a bad guy. I care about war veterans and people who lost their houses from natural disasters. And no matter what I am about to ask from you, you will still have it good in the big picture****)
Board of Directors meeting:
I was in New York this week for our quarterly Board of Directors meeting. Going in, the management team knew this was going to be a difficult meeting and we were not disappointed.
As I mentioned in my last letter, we have been working aggressively on a restructuring plan for Frontier; one that would allow the airline to at least break even with oil at $120 per barrel (plus a $20 crack spread). The management team believes it has developed just such a plan, but it is not entirely within our control to execute. In short we are going to have to seek participation from several key stakeholders of the airline in order to obtain more favorable economic terms to reduce our expenses to operate the airline profitably.
(*****this means, hey employees, oil prices are really high. That means employees should be expected to offset these costs******)
The Board has engaged a restructuring advisor to stress test management’s new business plan to see if it is makes sense and to help execute the restructuring effort if the Board decides to make the attempt.
I have done a lot of airline restructuring work in my 25-year career. It is always a bit like putting together a puzzle; however, you’re not entirely sure you have all the pieces in the box until you’re done. I am pleased to report our Board has decided to support the management team in making the effort. I’m sure you’re wondering what exactly all this means.
(****This means, hey we hired some high priced consultants to come up with a plan that is based upon employees taking pay cuts. But I don't know if you are going to take pay cuts, and if you don't the plan is trashed because the whole plan revolves around you taking pay cuts*****)
Within the first half of this year, due to escalating oil prices, Frontier will burn through more than $75 million of our cash reserves. The first thing we need to do is replenish those cash reserves. The Board has given us the authority to raise those funds, subject to a few conditions. The conditions being they want the management team to engage with a key few stakeholders and obtain their support for the plan. If we can accomplish that very quickly, then we have their blessing to raise the liquidity, which is essential to execute the restructuring plan. We have already opened the dialog with these select stakeholders and hope to very quickly deliver on the restructuring plan targets we presented to our Board of Directors in our revised business plan.
A natural question on people’s minds will be: what happens if the Frontier restructuring effort fails? Honestly, the answer is not good for anyone. If our restructuring efforts fail and we cannot return Frontier to marginal profitability under the assumption of sustained high oil prices, then the Board will not invest any more money into the airline. That is why they have made additional funding conditioned on our being able to demonstrate that certain key stakeholders will consent to support the plan before the Board invests any more money into the carrier. I’m sure there is a small group of folks who will say, “let it fail.” However, the risk is not limited to just the 6,000 employees of Frontier.
(******this means, hey, our whole plan is based on you taking pay cuts. We aren't going to do anything crazy like try to raise ticket prices to cover our costs when we can just ask our employees to take pay cuts and undercut the competition like SWA and UAL. And if you don't take these pay cuts, then maybe the whole airline will just disappear so be a team player or else******)
Regardless of what happens to Frontier, Republic will continue to fly for its major airline partners. However, it will not be unaffected by a bad outcome at Frontier. Without Frontier, there will be no home for the 15 small regional jets we operate as Frontier Express and there will no longer be a need for 15 E190s or the new aircraft, which will have to be sold or leased elsewhere. I hope most of our nearly 11,000 employees will agree with me that failure is just not an option.
As for the plan itself, I will present an overview of the plan to you during our next employee web presentation which is tentatively set for Thursday, June 2, at 2:30 p.m. EDT. I’ll be broadcasting from our training facility in Indianapolis if they can figure out the technology. We’ll confirm this schedule and location early next week.
I realize this is troubling news, but I want to leave you with a sense of optimism. The plan we have developed is strong, and I fundamentally believe it can and will work. We need help, we are going to ask for help and I am optimistic that people will agree to help us if we can convince them that they are much better off with a healthy and successful Frontier than without Frontier. It won’t be easy work, but I (and the rest of the management team) am totally committed to making every effort to preserve and protect this franchise and all the jobs that go with it.
(****hey all, let's make sure we pressure Frontier into taking these pay cuts! *****)
Are E190s moving to Frontier?
There are a lot of rumors circulating about an impending move of the E190 fleet. In order to better align our business groups for the future, we have been discussing the concept of relocating the E190s from the CPA side of our business to the brand side, which means moving the resources from our Republic operating certificate to our Frontier operating certificate. Of course, unless and until we are sure we have a viable business with Frontier this would be a waste of effort. However, assuming our restructuring efforts are successful, then we feel this is a rational decision, as it will more clearly define our two business segments (CPA and Brand) as well as make it easier to use Frontier equity to raise future investment capital to support the airline.
There will be those conspiracy theorists out there who will advocate this is a management tactic designed to whipsaw the pilots flying the aircraft. I assure you it is not.
(*****Ummmm, conspiracy theory? Isn't this the very definition of whipsawing? Who needs a good conspiracy when you outright admit that you're going to do it if the Frontier guys don't agree to pay cuts?******)
Of course, in the event we do move the equipment, we recognize that we will have to sit with down the unions to address the specifics of how it happens. In the totality of challenges we face, this isn’t in the top 10, but again, rather than let rumors fester, it seems easier to get it out on the table and let people understand what we are considering. I hope this helps.
(*****yeah, we just want to get the whipsawing issues out in the open so no one is surprised!*******)
Competition Developments:
Two weeks ago in my letter, I mentioned that I thought the SkyWest CRJ200 flying from Milwaukee would be terminated due to scope conflicts with Southwest’s pilots CBA.
At his shareholder meeting last week, Gary Kelly, Southwest’s president, made a remark to this effect in an answer to a media question. While he said no end date had been determined, he did acknowledge the relationship would be terminated. I suspect that SkyWest will not want to endure another winter of losses and, accordingly, I place my money that we will see this service no later than January 2012, if not sooner. While not a huge help to our Milwaukee situation, it certainly won’t hurt getting those local customers and possible connecting customers off AirTran and back on Frontier. This will also help as we eliminate the ERJ135s from Chautauqua and replace them with ERJ145s coming off contract with Continental early next year. Hopefully, now we will be able to sell the extra seats.
I realize just how hard this May has been for you all, both operationally and emotionally. I wish I could make the weather cooperate and gas prices go down, but please know how grateful I am for your continued hard work and effort to make our airline different and better despite the adverse conditions.
I wish you all peace. You are all in my prayers.
God bless,
Bryan
(****please remain obedient because I can barely handle running the airline with the problems it has now, never mind an employee uprising!*****)
I am not a Frontier employee, but am I close?
Good afternoon. I hope this letter finds you and your families well ahead of a soggy Memorial Day weekend.
As difficult and insecure as the airline industry feels with oil over $100 per barrel, when I stop and take a minute to view life from the perspective of the devastation caused by tornados in Tuscaloosa, Ala. and Joplin, Mo., or the flood damage along the Mississippi, I count my blessings. Our thoughts and prayers are with all the families who lost loved ones and all those who have lost homes over the past several weeks. May God give them strength to persevere during these challenging times.
Of course this is also the weekend we set aside each year to remember our fallen heroes in our nation’s military who have made the greatest sacrifice to preserve our security and freedom and to bring the hope of liberty to oppressed peoples far away. Right now it feels like our nation is struggling with political gridlock and polarized liberal and conservative agendas; however, with all the failings of our politics you only have to turn on CNN and see people being gunned down in Syria and Yemen to more fully appreciate what we often seem to take for granted: our Bill of Rights. Please take a minute to pray for the safety of our soldiers and their families around the globe.
(****the above two paragraphs mean, hey look, I'm not such a bad guy. I care about war veterans and people who lost their houses from natural disasters. And no matter what I am about to ask from you, you will still have it good in the big picture****)
Board of Directors meeting:
I was in New York this week for our quarterly Board of Directors meeting. Going in, the management team knew this was going to be a difficult meeting and we were not disappointed.
As I mentioned in my last letter, we have been working aggressively on a restructuring plan for Frontier; one that would allow the airline to at least break even with oil at $120 per barrel (plus a $20 crack spread). The management team believes it has developed just such a plan, but it is not entirely within our control to execute. In short we are going to have to seek participation from several key stakeholders of the airline in order to obtain more favorable economic terms to reduce our expenses to operate the airline profitably.
(*****this means, hey employees, oil prices are really high. That means employees should be expected to offset these costs******)
The Board has engaged a restructuring advisor to stress test management’s new business plan to see if it is makes sense and to help execute the restructuring effort if the Board decides to make the attempt.
I have done a lot of airline restructuring work in my 25-year career. It is always a bit like putting together a puzzle; however, you’re not entirely sure you have all the pieces in the box until you’re done. I am pleased to report our Board has decided to support the management team in making the effort. I’m sure you’re wondering what exactly all this means.
(****This means, hey we hired some high priced consultants to come up with a plan that is based upon employees taking pay cuts. But I don't know if you are going to take pay cuts, and if you don't the plan is trashed because the whole plan revolves around you taking pay cuts*****)
Within the first half of this year, due to escalating oil prices, Frontier will burn through more than $75 million of our cash reserves. The first thing we need to do is replenish those cash reserves. The Board has given us the authority to raise those funds, subject to a few conditions. The conditions being they want the management team to engage with a key few stakeholders and obtain their support for the plan. If we can accomplish that very quickly, then we have their blessing to raise the liquidity, which is essential to execute the restructuring plan. We have already opened the dialog with these select stakeholders and hope to very quickly deliver on the restructuring plan targets we presented to our Board of Directors in our revised business plan.
A natural question on people’s minds will be: what happens if the Frontier restructuring effort fails? Honestly, the answer is not good for anyone. If our restructuring efforts fail and we cannot return Frontier to marginal profitability under the assumption of sustained high oil prices, then the Board will not invest any more money into the airline. That is why they have made additional funding conditioned on our being able to demonstrate that certain key stakeholders will consent to support the plan before the Board invests any more money into the carrier. I’m sure there is a small group of folks who will say, “let it fail.” However, the risk is not limited to just the 6,000 employees of Frontier.
(******this means, hey, our whole plan is based on you taking pay cuts. We aren't going to do anything crazy like try to raise ticket prices to cover our costs when we can just ask our employees to take pay cuts and undercut the competition like SWA and UAL. And if you don't take these pay cuts, then maybe the whole airline will just disappear so be a team player or else******)
Regardless of what happens to Frontier, Republic will continue to fly for its major airline partners. However, it will not be unaffected by a bad outcome at Frontier. Without Frontier, there will be no home for the 15 small regional jets we operate as Frontier Express and there will no longer be a need for 15 E190s or the new aircraft, which will have to be sold or leased elsewhere. I hope most of our nearly 11,000 employees will agree with me that failure is just not an option.
As for the plan itself, I will present an overview of the plan to you during our next employee web presentation which is tentatively set for Thursday, June 2, at 2:30 p.m. EDT. I’ll be broadcasting from our training facility in Indianapolis if they can figure out the technology. We’ll confirm this schedule and location early next week.
I realize this is troubling news, but I want to leave you with a sense of optimism. The plan we have developed is strong, and I fundamentally believe it can and will work. We need help, we are going to ask for help and I am optimistic that people will agree to help us if we can convince them that they are much better off with a healthy and successful Frontier than without Frontier. It won’t be easy work, but I (and the rest of the management team) am totally committed to making every effort to preserve and protect this franchise and all the jobs that go with it.
(****hey all, let's make sure we pressure Frontier into taking these pay cuts! *****)
Are E190s moving to Frontier?
There are a lot of rumors circulating about an impending move of the E190 fleet. In order to better align our business groups for the future, we have been discussing the concept of relocating the E190s from the CPA side of our business to the brand side, which means moving the resources from our Republic operating certificate to our Frontier operating certificate. Of course, unless and until we are sure we have a viable business with Frontier this would be a waste of effort. However, assuming our restructuring efforts are successful, then we feel this is a rational decision, as it will more clearly define our two business segments (CPA and Brand) as well as make it easier to use Frontier equity to raise future investment capital to support the airline.
There will be those conspiracy theorists out there who will advocate this is a management tactic designed to whipsaw the pilots flying the aircraft. I assure you it is not.
(*****Ummmm, conspiracy theory? Isn't this the very definition of whipsawing? Who needs a good conspiracy when you outright admit that you're going to do it if the Frontier guys don't agree to pay cuts?******)
Of course, in the event we do move the equipment, we recognize that we will have to sit with down the unions to address the specifics of how it happens. In the totality of challenges we face, this isn’t in the top 10, but again, rather than let rumors fester, it seems easier to get it out on the table and let people understand what we are considering. I hope this helps.
(*****yeah, we just want to get the whipsawing issues out in the open so no one is surprised!*******)
Competition Developments:
Two weeks ago in my letter, I mentioned that I thought the SkyWest CRJ200 flying from Milwaukee would be terminated due to scope conflicts with Southwest’s pilots CBA.
At his shareholder meeting last week, Gary Kelly, Southwest’s president, made a remark to this effect in an answer to a media question. While he said no end date had been determined, he did acknowledge the relationship would be terminated. I suspect that SkyWest will not want to endure another winter of losses and, accordingly, I place my money that we will see this service no later than January 2012, if not sooner. While not a huge help to our Milwaukee situation, it certainly won’t hurt getting those local customers and possible connecting customers off AirTran and back on Frontier. This will also help as we eliminate the ERJ135s from Chautauqua and replace them with ERJ145s coming off contract with Continental early next year. Hopefully, now we will be able to sell the extra seats.
I realize just how hard this May has been for you all, both operationally and emotionally. I wish I could make the weather cooperate and gas prices go down, but please know how grateful I am for your continued hard work and effort to make our airline different and better despite the adverse conditions.
I wish you all peace. You are all in my prayers.
God bless,
Bryan
(****please remain obedient because I can barely handle running the airline with the problems it has now, never mind an employee uprising!*****)
I am not a Frontier employee, but am I close?
Last edited:
GuppyWN
Well-known member
- Joined
- Nov 5, 2005
- Posts
- 3,204
I guess I'll stand on the ridge line and say it...........
The Frontier pilots got rolled. By whom depends on who you ask.
You guys should have been flying Canyon Blue jets around the country with a secure company looking forward to a prosperous remainder of your career.
It wasn't over when the Germans bombed Pearl Harbor. I still hope there is room in DEN for the 3 of us.
Gup
The Frontier pilots got rolled. By whom depends on who you ask.
You guys should have been flying Canyon Blue jets around the country with a secure company looking forward to a prosperous remainder of your career.
It wasn't over when the Germans bombed Pearl Harbor. I still hope there is room in DEN for the 3 of us.
Gup
redflyer65
Well-known member
- Joined
- Jan 1, 2004
- Posts
- 4,456
This whole thing is almost comical. Here you have an airline that has lower costs than SWA and UAL, and Reverend Bedford is crying a river because oil prices are high.
Now believe me, I am no fan of Frontier. I have stated in the past that they were up there with the JetBlue's and the Valujet's of the world that happily undercutting mainline wages in the late 1990's/early 2000's in order to steal market share from the legacy carriers. It is kind of ironic that they are now in the same position that we were about 10 years ago.
Regardless, if the Frontier guys fall for this crap, then they deserve what they get. All the carriers are facing high oil prices. There is ZERO reasons why any Frontier employee should have to take a pay cut other than Bedford thinking he can get away with it. No doubt higher oil prices increase costs and that some city pairs become unprofitable. But to expect the employees of Frontier to offset the cost of doing business is just crazy.
I'd be interested in hearing about what came out of the June 2 meeting.
Now believe me, I am no fan of Frontier. I have stated in the past that they were up there with the JetBlue's and the Valujet's of the world that happily undercutting mainline wages in the late 1990's/early 2000's in order to steal market share from the legacy carriers. It is kind of ironic that they are now in the same position that we were about 10 years ago.
Regardless, if the Frontier guys fall for this crap, then they deserve what they get. All the carriers are facing high oil prices. There is ZERO reasons why any Frontier employee should have to take a pay cut other than Bedford thinking he can get away with it. No doubt higher oil prices increase costs and that some city pairs become unprofitable. But to expect the employees of Frontier to offset the cost of doing business is just crazy.
I'd be interested in hearing about what came out of the June 2 meeting.
stratus72
Well-known member
- Joined
- Dec 30, 2005
- Posts
- 289
I'm sure you would...
waveflyer
Well-known member
- Joined
- Jan 9, 2005
- Posts
- 10,005
Well said.
There's no non-compete clauses anymore when mgmt figured out that regionals were good union busting tools. And when union-busting became more important than profits.
Jonjuan-
Think about what you said....
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