May 14, 2008

(Denver) – The Teamsters Union on Wednesday said Frontier Airlines management is demanding a golden parachute even as it demands pay reductions from employees.

Managers at Frontier (Nasdaq: FRNT) want to grant workers little to nothing if the company fails. But they want to give themselves up to six months pay.

“We negotiated in good faith with Frontier management even though they already have the lowest labor costs of all low-cost carriers,” said Matthew Fazakas, president of Teamsters Local 961.  “They continually moved the goal posts for a deal.  But we met every savings demand they made. Now we learn they had a secret plan to give themselves golden parachutes while workers get nothing.

“Golden parachutes for management are a deal breaker,” Fazakas said. 

Frontier’s bankruptcy has nothing to do with labor costs. Frontier has among the lowest labor costs in the industry and the lowest among low-cost carriers. The airline’s bankruptcy resulted from a dispute with its credit card processor.

Nonetheless, Frontier employees agreed to $10.2 million in labor savings. During negotiations, Teamster employees agreed to a performance bonus plan for both management and line employees.

“Suddenly, on Tuesday, management sprang on us a new severance plan that would give them pay up to six months,” Fazakas said. “We would get nothing.

“We’re outraged by this secret plan for a golden parachute,” Fazakas said. “They concealed this plan from us throughout bargaining.  They want us to have confidence in their plan to emerge from bankruptcy, but obviously they have no confidence in it themselves.”

Frontier employs about 425 members of the International Brotherhood of Teamsters as aircraft technicians, ground service technicians, tool room attendants, material specialists and aircraft appearance agents.

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.

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