Frontier Airlines Wants to Shift Work to El Salvador
By Noelle Leavitt, Denver Business Journal | Sep. 12, 2008
On Sep. 12, Frontier Airlines filed a motion for approval to outsource its heavy maintenance work to El Salvador, resulting in the elimination of 130 Colorado employees - a move that would change the airline's bargaining agreement with the Teamsters union, according to court documents.
The airline would save US$5.6 million a year, which would help Frontier gain "more financial footing" in its efforts to emerge from Chapter 11 bankruptcy and offset inflated fuel costs, the document said.
The motion will be heard in U.S. Bankruptcy Court in New York on Oct. 3.
"Now that our fleet is going to be smaller, the bottom line is that there's less heavy maintenance work for employees to perform," said Steve Snyder, Frontier spokesman.
Denver-based Frontier plans to shed 11 aircraft from its fleet as a part of the Chapter 11 restructuring process. The airline filed for bankruptcy protection in April.
The Teamsters union - which represents 425 Frontier employees, including mechanics - knew beforehand that Frontier would file such a motion, and released a statement on Sep. 11 opposing Frontier's attempt to outsource maintenance work to another country.
"The Teamsters adamantly and steadfastly opposes any subcontracting of maintenance work with the resulting job losses," Teamsters Local 961 President Matthew Fazakas said in the release. "The company has not demonstrated a need to send the work to a foreign country."
Frontier also asked the court to make temporary wage cuts, which the Teamsters agreed to in May, permanent.
"The company has not demonstrated a need for an extension of the interim concession agreement," Fazakas said in the release. "The Teamsters members employed at Frontier are standing strong and united against the company's attempts to subcontract our good-paying Colorado jobs to a foreign country and to get uneven and unfair concessions."
The low-cost carrier said in the filing that it must cut roughly US$35 million in annual mainline labor costs in order to survive.
Since the Chapter 11 filing, Frontier has eliminated 600 positions.
Several airlines have outsourced work for years, Frontier said.
"Look at other carriers that have done this. Most of our main competition in Denver ... most other low-cost carriers ... have the ability to outsource their operations - some up to 100 percent," Snyder said.