Frontier gets bankruptcy court approval to keep flying
Written on April 12, 2008
Frontier Airlines Holdings Inc (FRNT.O: Quote, Profile, Research) received U.S. court approval on Friday to operate in Chapter 11 bankruptcy protection, where it sought refuge from financial pressures of skyrocketing fuel prices and a weakening economy.
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York granted Frontier’s request to permit it to honor reservations, pay wages, vendors and other expenses, and maintain frequent flier programs.
“We are grateful that Judge Drain granted the critical first day motions that will enable Frontier to continue normal operations,” Sean Menke, the company’s president and chief executive officer, said in a statement.
“Our reorganization is off to a smooth start and we look forward to taking important steps to further strengthen our company,” Menke said.
Frontier operated a full schedule of flights on Friday, the company said.
Frontier filed for bankruptcy on Thursday, becoming the fifth U.S payday loan. airline in two weeks to take drastic measures to counter a steadily deteriorating business climate.
The crisis at Frontier is different from the circumstances that caused Aloha Airlines, Champion Air, ATA Airlines and Skybus Airlines to shut down last week.
Aside from fuel costs — which jumped more than 20 percent in 2007 to $2.58 per gallon — Frontier also faces an eroding cash position caused by changes imposed by its credit card processor, First Data.
Filed in: money.