Frontier says bankruptcy won’t stop Aspen’s service |

Frontier says bankruptcy won’t stop Aspen’s service

ASPEN, Colorado ” Frontier Airlines officials said Friday that its new service to Aspen won’t be affected by the carrier’s efforts to secure bankruptcy protection.

“Everything is moving forward as planned,” said Frontier spokesman Joe Hodas via e-mail.

Frontier will offer five flights per day between Aspen and Denver on its subsidiary, Lynx Aviation. Word that the airline had filed for bankruptcy had some local travel and tourism leaders cringing Friday.

“On the surface, when we first heard about it, it was disconcerting,” said Aspen Skiing Co. spokesman Jeff Hanle. But once Skico officials took a deeper look at Frontier’s actions and statements, they felt reassured that Aspen service wouldn’t be affected.

“From our end, we’re going on good faith that they’re going to do what they said they’re going to do,” Hanle said.

The Skico has heavily promoted the Lynx flights to its customers since Frontier announced its expansion plans in mid-February. The Skico is trying to build awareness for next winter.

Frontier sought Chapter 11 bankruptcy protection, which would allow it to reorganize its debt, on Thursday after its primary credit card processor said it would withhold a greater share of proceeds from ticket sales for a longer period. Frontier wanted to prevent the move by First Data Corp.

“By filing for Chapter 11, we will now have the time and legal protection necessary to obtain additional financing and enhance our liquidity. Fortunately, we believe that we currently have adequate cash on hand to meet our operating needs while we take steps to further strengthen our company,” said Frontier CEO Sean Menke said in a statement.

Soaring fuel costs are eating into airlines’ profits. ATA Airlines, Skybus and Aloha Airgroup all have filed for bankruptcy in the past two weeks.

Frontier insisted in a news release and on its website that its operations would not be affected by the bankruptcy filing.

Aspen area residents who have already booked a flight on the new Lynx service received an e-mail Friday assuring them “your travel plans are secure.”

“We are operating our existing schedule of flights ” today and in the future ” honoring tickets and reservations as usual, and making normal refunds and exchanges,” the e-mail said.

Pitkin County Airport Director Jim Elwood said Friday afternoon he had spoken to a Lynx representative and remained optimistic about the carrier’s plans for service. The airline industry has faced severe challenges in the last decade and reorganization under bankruptcy protection is not uncommon, he said.

In fact, Elwood shared an old adage from the aviation industry: “There are airlines that have been in bankruptcy and those that will.”

Airline industry analyst Michael Boyd said Frontier’s filing for bankruptcy meant “absolutely nothing” to the carrier’s plans to launch service to Aspen via Lynx. That type of service ” a short distance on a potentially popular route ” is what the carrier needs at this point. “It’s critical to them,” Boyd said.

The bankruptcy filing gets lawyers and accountants involved in Frontier’s business operations to a greater degree, Boyd said, but it should mean no change for consumers.

Bill Tomcich, president of Stay Aspen/Snowmass, a central reservations agency, noted that airlines have historically operated in Aspen while going through bankruptcy reorganization. United, Delta and U.S. Airways all faced a similar scenario, he said.

Like Hanle and Elwood, Tomcich expressed no concern about Lynx’s ability to serve Aspen.

“They are going to need our help more than ever,” Tomcich said. He urged passengers to continue considering Frontier as an option. Anyone with concerns can make reservations through a travel agency and use a credit card to eliminate any potential risk, he said.

Menke’s statement said Frontier Holdings Inc. was prepared to litigate, if necessary, to prevent First Data Corp. from changing its policy of withholding proceeds from ticket sales.

“This change in established practices would have represented a material change to our cash forecasts and business plan. Unchecked, it would have put severe restraints on Frontier’s liquidity and would have made it impossible for us to continue normal operations,” his statement said.

The creditor listed in bankruptcy court documents as having by far the largest general unsecured claim against Frontier was Wells Fargo, with $93.5 million. Frontier said it had fewer than 50 creditors.

The Associated Press contributed to this report.

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