Pilot Vote Will Decide Frontier's Future
STEVE INSKEEP and RENEE MONTAGNE, host:
The future of Frontier Airlines may rest on a vote today by its pilots. The pilots are being asked to reduce their pay and benefits to help keep the Denver-based carrier in business. In exchange, they would get a share in the airline.
NPR's Jeff Brady explains.
JEFF BRADY: High fuel prices contributed to a $55 million loss for Frontier during the first quarter this year. In 2009, Indianapolis-based Republic Airways bought Frontier out of bankruptcy and tried to expand it. But last week, CEO Brian Bedford sent a letter to employees saying without $120 million in financial improvements, Frontier will not be a viable business.
Airline analyst Mike Boyd says Republic's strategy for Frontier is partly to blame.
Mr. MIKE BOYD (Boyd Group International): They have an operation in Denver and they have an operation in Milwaukee, and they're trying to fly flights out of Kansas City and out of Omaha, and I think it's kind of frittered away their strength.
BRADY: Boyd says Frontier's strength is its association with Denver and the brand loyalty the airline has with flyers here. Boyd says Frontier is still a well-run airline; it just needs to return to its Mile High roots.
Mr. BOYD: So with a little more capital, there's no question they can survive.
BRADY: If pilots approve concessions, then Republic says it will raise more cash. The deal would give Republic a minority stake in Frontier within three-and-a-half years. The pilots union is expected to release voting results later today.
Jeff Brady, NPR News, Denver.
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