Long before the rest of economy went to pot, the airline industry was awash in an ocean of red ink. Some things never change. Republic Airways Holdings (RJET) yesterday offered to buy bankrupt Frontier Airlines (FRNTQ) for $108.8 million. Indianapolis-based Republic will still need to get court approval to bring the airline out of bankruptcy.
Republic gave a $40 million debtor-in-possession loan to Frontier and held a $150 million unsecured claim, so it's no surprise that Republic wanted to buy the airline, the Associated Press said.
In more bad airline news, UAL Corp. (UAUA)'s United Airlines said today it will cut 600 flight-attendant positions as it looks to cut costs.
"The cuts are in addition to the 1,550 flight attendant jobs eliminated last year as the third largest U.S. airline downsized," Reuters notes. "Those reductions were achieved through voluntary furloughs, and the company said it would again offer workers voluntary exit packages." UAL currently represents 13,500 flight attendants.
Spurred by rising oil prices, the International Air Transport Association is forecasting that the world's airlines will lose $4.7 billion this year, surpassing the bloodletting the airline industry experienced after the September 11 terrorist attacks. Layoffs are continuing.
And the travel itinerary gets even worse. Last week, AMR Corp. (AMR)'s American Airlines announced plans to cut 1,600 jobs; Delta Airlines (DAL) indicates that it may increase the number of its announced job cuts; and US Airways Group (LCC) said it wants to slash 400 flight attendant positions, according to Bloomberg News. Looks like the skies that consumers are flying won't be friendly for a long time.
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