Frontier Airlines Gets USD$40 Mln DIP Commitment

Frontier Airlines said on Thursday it received a commitment for USD$40 million debtor-in-possession financing from Republic Airways Holdings.

The airline, which filed for Chapter 11 bankruptcy protection on April 10, 2008, said the new financing, which matures in April, preserves its stability as it seeks a plan to emerge from bankruptcy later this year.

It said that the financing comes with a condition that Frontier allow Republic a stipulated damage claim in the amount of USD$150 million. The agreement also needs to be approved by bankruptcy court.

Frontier already received USD$30 million in DIP funding from Republic and Credit Suisse Securities and AQR Capital in August 2008.

Republic said in the statement that Frontier is on the right path to emerge from bankruptcy this summer.