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Frontier Restructuring Unaffected By Teamster Lawsuit

Airline Advisor's Opinion Inaccurate

WASHINGTON, Aug. 19, 2011 /PRNewswire-USNewswire/ -- The International Brotherhood of Teamsters (IBT), the certified union representative of the pilots of Republic Airlines and Frontier Airlines, today disputed a claim by Republic and Frontier Airlines' advisor Michael Cox that a lawsuit filed by the union earlier this month has placed the financing the company is seeking in jeopardy.


Earlier in August, the union filed a lawsuit in U.S. District Court in Denver against Frontier Airlines Inc., its parent company, Republic Airways Holdings Inc. and a shell company set up by the rejected former union of Frontier.  

The lawsuit alleged that Frontier, Republic Airways Holdings and the former union of Frontier pilots, the Frontier Airline Pilots Association (FAPA), which recently lost a union representation election to the IBT, entered into unlawful concessionary agreements intended to interfere with the Republic subsidiaries' pilots' choice of IBT to be their collective bargaining representative, and to perpetuate FAPA's continued representation of Frontier pilots. The lawsuit seeks to invalidate the agreements.

Teamsters' economist James Kimball, in a sworn affidavit, disputed the claim by the airlines' consultant that their restructuring plan was now in jeopardy. In fact, the company's own filings with the Securities and Exchange Commission (SEC) contradicted that claim.  

"This opinion is inconsistent with the company's Aug. 2, 2011 SEC Form 8K report and its Aug. 9, 2011 SEC 10Q quarterly report, the company's most recent SEC filings," Kimball said. "Straight-forward mathematics shows that the company's Frontier-restructuring initiative can proceed without the LOA 67 concessions, assuming the accuracy of the Cox Declaration's representations that other concessionary agreements by Frontier vendor or employee groups require that the company achieve 80 percent of its $120 million goal of annual savings, i.e. $96 million.

"There are no specific facts or documentation of any kind offered or referenced to support any of these representations or opinions in the Cox Declaration. The company's Aug. 9, 2011 10Q nowhere mentions that there would be a material adverse impact upon the company's ability to raise additional liquidity or that the Frontier restructuring plan would be placed in jeopardy if IBT succeeded in this litigation. The company does estimate in the 10Q the anticipated material adverse impact upon the company if the IBT is successful in the litigation. It states only that if IBT is successful in the lawsuit, Frontier would lose approximately $9 million to $10 million in cost savings per year over each of the next five years," Kimball stated.  

This reflects less than 10 percent of the value of its restructuring plan and less than a $2 per barrel annual change in the price of oil to the company.

"It's outrageous that the company would make false claims about the financial path of the company to gain a perceived procedural advantage in a lawsuit," said David Bourne, Director of the Teamsters Airline Division.

Founded in 1903, the International Brotherhood of Teamsters represents more than 1.4 million hard-working men and women in the United States, Canada and Puerto Rico including more than 75,000 workers in the airline industry. Go to for more information.

SOURCE International Brotherhood of Teamsters

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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