Frontier, First Data Reach Deal on Credit-card Processing

DENVER_Frontier Airlines has reached an agreement with First Data Corp. on the handling of proceeds from ticket sales, an issue that had forced the airline to file for bankruptcy protection, the airline said Friday.

Officials of the airline and the credit-card processor declined to release details.

But Frontier CEO Sean Menke, in a written statement released Friday, called the agreement "fair and reasonable to both parties." And First Data's U.S. division president, Ed Labry, said he was pleased with the deal.

Menke said Frontier was forced to file for Chapter 11 bankruptcy protection last month when First Data sought to hold up to 100 percent of proceeds from ticket sales until flights were completed. First Data previously withheld 50 percent.

Steve Snyder, a spokesman for the Denver-based airline, said the deal will be submitted to a bankruptcy judge for approval in the next few days.

Airline industry analyst Bob Mann called the deal "a positive development."

"Frontier was not forced to go to another firm, and First Data didn't believe that ultimately they were in a position they could not do business with Frontier," said Mann, of R.W. Mann & Co. of Port Washington, N.Y.

Separately, Snyder confirmed the online ticket seller Expedia.com has stopped listing Frontier flights after the airline asked to restructure its contract. The development was first reported in Friday's Denver Post.

Snyder said the airline is still negotiating with Expedia and hopes to reach an agreement soon.

Frontier is reviewing all of its contracts as part of its reorganization, he said. He declined to say whether the airline had asked to restructure its contracts with the other three major online ticket outlets, Travelocity, Orbitz and Priceline, which he said are still booking Frontier flights.

Snyder said the airline gets about 24 percent of its bookings from online companies.

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On the Net:

http://www.frontierairlines.com

http://www.firstdata.com