Good for you First Data! And congrats...you've earned you're wings!
If' you'll pardon a few of my pun(z) which I have flying around here, this sounds like the kind of approach that avoids a vicious crash landing for Frontier. Helping always seems to result in happy landings for all involved.
Besides...It is also a much better branding and exponentially better "PR strategy" as well. It almost seems as if there was the old FD and now we have the new "improved" FD. (Along with their change of heart I had to ponder the coincidental timing of the release of their new logo. (also much nicer!)
Payments News reports that Denver-based Frontier, which is operating under Chapter 11 bankruptcy protection, has reached an amended agreement with First Data, its credit-card processor, and is asking the presiding judge for approval. Frontier, and subsidiary Lynx Airlines, filed Chapter 11 in New York in April after First Data told the airline it planned to increase the revenue held in reserve until Frontier customers completed their flights, a credit-risk-mitigation technique commonly called "holdback."
The effect, according to a motion filed with the court by Frontier, will be an "immediate incremental liquidity." According to BizJournals "In exchange for passing the funds on to Frontier, First Data will have a lien on some of Frontier's ground service equipment."
Like the majority of airlines, Frontier and Lynx get most of their revenue from credit card receipts, according to court papers. MasterCard and Visa brought in 70 percent of Frontier's $1.35 billion in revenue during the 12 months ended March 31. Since I was rather hard on First Data (or they on themselves) I thought I'd show their "softer" side with this followup to my previous posts on the subject.Related articles by Zemanta
Well, if I do say so myself here's one "Jim Dandy" of a turnaround...now it's First Data to the Rescue! Back in April, Frontier Airlines blamed First Data for it's bankruptcy petition on account of how First Data announced it would withhold 100% of Frontiers credit card receipts starting May 1st, earlier this year. (See the post entitled: Mayday! MayDay! MayDay! of which there is a link below)
Today I read that First Data has now decided to provide Frontier with 100% of it's credit card revenue. In addition, Frontier Airlines will get an infusion of funds from an agreement struck with First Data Corp of Greenwood Village, according to court documents filed on Wednesday.
Friday, July 11, 2008
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