Dallas News Reported – Denver-based Frontier Airlines Inc. became the fourth U.S. airline in less than a month to file Chapter 11 bankruptcy papers Friday, joining Aloha Airlines Inc., ATA Airlines Inc. and Skybus Airlines Inc.
However, Frontier will continue flying its airplanes, the carrier said, unlike the other three which have grounded their aircraft and ceased operations.
Frontier blamed an unnamed credit card company that had tried to “substantially increase” the amount of customer receipts the credit card company wanted to hold back and keep in reserve in case the airline ran into trouble.
The action, which was to begin Friday, “threatened to severely impact Frontier’s liquidity,” the carrier said.
“Frontier is committed to delivering exceptional customer service and we intend to continue delivering on that promise with normal operations throughout our reorganization process,” Frontier president and chief executive Sean Menke said in a statement.
“To be clear, we filed for very different reasons than those of other recent carriers, and our customers and employees can be confident that we intend to keep on flying and providing outstanding service and products,” he said.
Mr. Menke said Frontier “has continued to perform relatively well in this difficult environment, and contrary to the trend, we have not seen a decrease in consumer demand, as demonstrated by our record traffic and revenue in March.”
The credit card holdback “would have made it impossible for us to continue normal operations,” he said. The bankruptcy filing will prevent the card company from increasing the holdback, Mr. Menke said.
“We are prepared to litigate this issue is necessary,” he said.
From Dallas/Fort Worth International Airport, Frontier flies to Denver and Mazatlan, Mexico.