Thursday, May 22, 2008

Airlines Crash: Frontier Airlines files for bankruptcy

Frontier Airlines, a US low fare carrier headquartered in Denver, collapsed into Chapter 11 bankruptcy on Friday as the latest casualty of the growing shake-up of global aviation, as carriers struggle to cope with record oil prices and weakening economic growth.

Frontier said it had been forced to seek court-administered protection from its creditors in response to a move by its principal credit card processor, First Data, to start withholding “significant proceeds” received from the sale of Frontier tickets.

The collapse of Frontier into bankruptcy is the starkest illustration to date of the drastic tightening of operating conditions in the US aviation sector, where several leading carriers are already cutting domestic capacity and grounding older aircraft.

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