Airbus Delays

BY CHRISTOPHER SCINTA
Bloomberg News
Frontier Airlines Inc., the bankrupt discount carrier based in Denver, delayed the acquisition of seven Airbus planes to get $7.5 million back from pre- delivery payments.
Airbus will return the cash under an amended contract, Frontier's attorneys from Davis Polk & Wardwell in New York said in a filing with the U.S. Bankruptcy Court in New York.
The first aircraft, Airbus A318s and A319s scheduled for delivery in 2009, will be postponed to early 2011, Frontier spokesman Steve Snyder said.
"The money will provide needed liquidity to fund the debtor's operations," Frontier's lawyers said in the court documents. "Delaying the delivery of the aircraft by two years better aligns the operational needs of the debtors with their fleet."
Frontier, which operates a fleet of about 60 Airbus planes, is cutting capacity by 17 percent as fuel costs have climbed to record levels.
The airline will seek approval of the revised deal with Airbus at a hearing scheduled for July 11 before U.S. Bankruptcy Judge Robert Drain.
In May, Frontier won court approval to sell four Airbus planes for $106 million to Verulamium Finance Ltd., making a net cash gain of $37.5 million.