Airline Trades Shares for Short-Term Cash

Frontier Airlines says it's closed a deal on a $70-million term loan, of which $63 million is guaranteed by the Air Transportation Stabilization Board (ATSB). Smaller portions are guaranteed by other parties.

Frontier received conditional approval for the loan on Nov. 5, 2002. The loan was provided by WestLB, a large European bank, with additional participation by Wells Fargo Bank, N.A. As one of the conditions of the loan, Frontier Airlines issued warrants to the guarantors to purchase approximately 11.1 percent of the company's outstanding common stock upon closing the deal.

Staying Alive

"(This) transaction provides additional liquidity for Frontier as the industry continues to struggle in the aftermath of the September 11, 2001, terrorist attacks. We are proud of the airline we have built since our inception in 1994, and it is our goal to continue providing affordable, competitive air service to our nation's air transportation system," said Frontier President and CEO Jeff Potter.

Denver-based Frontier Airlines employs approximately 3,100 aviation professionals and is the second largest jet service carrier at Denver International Airport. Frontier and its regional jet partner Frontier JetExpress offer service to 39 cities. Frontier's fleet consists of 37 aircraft, which feature a single-class configuration.

FMI: www.frontierairlines.com