GS Logo
The Green Sheet, Inc

Please Log in

A Thing
View Archives

View PDF of this issue

Care to Share?


Table of Contents

Lead Story

Canadian payments revolution - eh!

Adam Atlas
Attorney at Law

News

Industry Update

HR 5546 is in the House

Shopit starts Revolution

Agreement keeps Frontier flying

PCI SSC adds new payment device types

New webinars target PCI education

Gas stations nixing plastic

Approaching a crossroads

Patti Murphy
The Takoma Group

Features

Brewer taps payments market

Brewer taps payments market

ISOMetrics:
Payments in the Great White North

Views

Approaching a crossroads

Patti Murphy
The Takoma Group

Education

Street SmartsSM:
Passing the so-what test

Jason Felts
Advanced Merchant Services

Communication matters

Vicki M. Daughdrill
Small Business Resources LLC

How sellers blow deals

Lane Gordon
MerchantPortfolios.com

Canada goes to chip, fraudsters move south: Are you ready?

Deana Sellens
Take Charge Business Consulting LLC

Web sites that work

Nancy Drexler
SignaPay Ltd

Dial is yesterday's paper

Dale S. Laszig
DSL Direct LLC

Company Profile

RDM Corp.

Smart Circle International

New Products

Destroy the data, recycle the rest

D3eraSE
Company: Digital Data Destruction Services Inc.

Inspiration

Take new trip in downturn

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

July 28, 2008  •  Issue 08:07:02

previous next

Agreement keeps Frontier flying

Frontier Airlines Holdings Inc., the parent company of Frontier Airlines, and First Data Corp. reached an agreement in Frontier's bankruptcy case, which the airline filed in April 2008. The agreement enables Frontier to continue processing its Visa Inc. and MasterCard Worldwide credit card transactions without interruption, while also offering First Data financial protection.

First Data has typically retained a percentage of Frontier's credit card sales receipts until Frontier customers complete their flights, a risk mitigation technique commonly called a holdback. But First Data notified Frontier earlier this year that it intended, as of May 2008, to increase the holdback from 45 to 100 percent.

On April 10, to prevent what it called a "material alteration of our contract rights, and to develop and implement a comprehensive restructuring plan under the protections of Chapter 11," Frontier and its subsidiaries filed petitions for reorganization under Chapter 11 of the United States Bankruptcy Code.

Process navigation

Denver-based Frontier has maintained normal business operations since the filing; it has used the time and legal protection afforded by the petition to secure additional financing and sustain liquidity.

Frontier will get an infusion of funds from the agreement, according to court documents. The airline is waiting for approval of the agreement from Chief Judge Stuart M. Bernstein, who is presiding over the case in the U.S. Bankruptcy Court, Southern District of New York. Frontier President and Chief Executive Officer Sean Menke said, "The terms of the agreement are fair and reasonable to both parties, and we appreciate First Data's ongoing cooperation."

Course correction

Going forward, First Data will no longer hold a percentage of Frontier's Visa and MasterCard receipts in reserve and will forward 100 percent of said receipts as consumers pay for upcoming flights. According to Frontier, the effect will be an "immediate incremental liquidity."

In exchange for suspending its holdback practice for Frontier, First Data will have a lien on certain Frontier ground service equipment. "We are pleased to have come to an agreement with Frontier and will continue to work closely with them through this process," said Ed Labry, President, First Data USA.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | USAePay | Impact Paysystems | Electronic Merchant Systems | Board Studios