Frontier Airlines (Nasdaq: FRNT) today announced it has received conditional approval from the Air Transportation Stabilization Board (ATSB) for a $63 million federal loan guarantee of a $70 million commercial loan facility.
“On behalf of Frontier’s 3,000 employees, we are extremely appreciative of the government’s recognition of Frontier’s solid business plan and the value Frontier’s presence brings to aviation in our country,” said Frontier President and CEO Jeff Potter. “During the past eight years, the employees of Frontier have worked hard to create a strong, economically viable airline that brings affordable, competitive air service to millions of air travelers each year.
“The events of September 11 and its aftershocks have had a debilitating effect on the capital markets. We are in the midst of our fleet improvement/transition plan, and access to capital is a critical success factor. Obtaining conditional approval for this government backed loan helps to ensure that we can continue our business strategy, bring competitive air travel options to more communities and preserve competition in the aviation industry. We are especially grateful for the professional manner in which the ATSB and their staff conducted this process. We found their knowledge of our industry and the unique challenges we face to be thorough and comprehensive, and we thank them for their efforts.”
Congress enacted the ATSB loan guarantee program in September 2001 in order to provide financial stability for airlines impacted by the September 11 terrorist attacks. Subject to satisfaction of the conditions imposed by the ATSB and obtaining the necessary internal approvals, Frontier Airlines expects to obtain funds from the ATSB supported loan transaction in its current quarter.
Denver-based Frontier Airlines employs approximately 3,000 aviation professionals and is the second largest jet service carrier at Denver International Airport. The airline offers service to 37 cities with a fleet of 34 aircraft, which feature a single-class configuration. In 1999, 2000 and 2001, Frontier`s maintenance and engineering department received the Federal Aviation Administration`s highest award, the Diamond Certificate of Excellence, in recognition of 100 percent of its maintenance and engineering employees completing advanced aircraft maintenance training programs. In April 2002, Entrepreneur ranked Frontier one of two “Best Low-Fare Airlines,” and in September 2001, Fortune ranked Frontier 41st on its 100 Fastest Growing Companies list. Frontier provides capacity information and other operating statistics on its Web site, which may be viewed at www.frontierairlines.com.