On Apr 12, 3:31 pm, clare at snyder dot ontario dot canada wrote:
On Sat, 12 Apr 2008 16:11:40 -0500, nick hull wrote:
In article ,
"Jon Danniken" wrote:

"cavelamb himself" wrote:
I made up this "international icon" graphic to 'splain the situation.
I thought it would make a great bumper sticker...

http://www.home.earthlink.net/~cavelamb/proof.htm

NIce try, but that is an old image. Actually saw it on a local car earlier
in the week. Same color scheme, too.
\
The problem isn't expensive gas but expensive everything - inflation at
work. You need an Icon showing the Fed screwing everyone, they are the
one who create inflation.

Free men own guns - www(dot)geocities(dot)com/CapitolHill/5357/

It's the US government fighting a war without raising taxes to pay for
it, combined with brainless bankers in an unregulated system giving
huge amounts of money to people with no means of paying it back, and
collecting huge bonuses for "pulling the chain" on the american, and
world, financial system.

** Posted fromhttp://www.teranews.com**- Hide quoted text -

- Show quoted text -

If you wondered how fragile "The System" is, try reading this....

It can happen to any company or anyone.

TMT

Credit card trouble pushed Frontier over By JOHN WILEN, AP Business
Writer
Fri Apr 11, 7:03 PM ET



Frontier Airlines, the latest airline to file for bankruptcy, was
pushed over the brink by a problem that could spread to other
carriers: credit card troubles.

The carrier on Friday blamed its Chapter 11 bankruptcy protection on a
cash squeeze caused by its credit card processing company, which has
decided to keep a larger chunk of the Denver airline's ticket revenue.

The move ends a policy under which the processor, First Data Corp,
passed on most money from ticket sales to Frontier. The change is
intended to protect First Data, which would be on the hook for ticket
refunds if Frontier stops flying. Frontier plans to continue operating
while in bankruptcy.

First Data's decision represents a new threat to an industry facing
jet fuel prices that have soared 74 percent in one year, a new
government focus on safety that has grounded thousands of flights in
recent days and tight competition and falling demand that, combined,
have limited carriers' ability to raise prices.

"It's just a god-awful time for this industry," said Bob Mann, an
independent airline consultant based in Port Washington, N.Y. "This
illustrates the uncertainty of capital markets to a T."

ATA Airlines, Skybus Airlines and Aloha Airlines all have filed for
bankruptcy in recent weeks. Champion Air plans to shut down and MAXjet
Airways went bankrupt in December. All cited some combination of high
fuel prices and falling demand, among other factors.

While it's not uncommon that banks processing airline credit card
transactions hold a certain amount of a carrier's proceeds in their
own accounts until a passenger completes his or her travel, it is
unusual for a processor to suddenly change its cash withholding
policy, analysts say.

In the case of Frontier, the new requirement -- known in industry speak
as a holdback -- was the proverbial straw that broke the camel's back.

"We believe that we currently have adequate cash on hand to meet our
operating needs," Frontier Chief Executive Sean Menke said in a
statement. "Unfortunately, our principal credit card processor very
recently and unexpectedly informed us that, beginning on April 11, it
intended to start withholding significant proceeds received from the
sale of Frontier tickets."

Such a "change in established practices" would throw a serious wrench
into Frontier's cash forecasts and business plan, Menke said. The
bankruptcy filing prevents First Data from imposing the new cash
withholding requirement, he said. The airline also threatened to sue
First Data.

"The terms of our agreement with Frontier Airlines are not unique;
they are considered standard industry practice and terms originally
agreed upon by Frontier," First Data, of Greenwood Village, Colo.,
said in a statement.

"They do this because ... they're concerned that a carrier will use
the proceeds in advance of travel occurring and then not have the
funds to actually perform the travel," Mann said.

Companies such as First Data usually base cash withholding decisions
on their own analysis of an airline's finances -- most airlines are
contractually required to provide their processors with monthly cash
flow reports and forecasts.

"They're doing the same thing that I'm doing," said Ray Neidl, an
analyst at Calyon Securities who late last month expressed concern
about Frontier's projected cash position. Earlier this week, the
carrier said it had no concerns about bankruptcy. Credit card
processors constantly review the credit profiles of the companies they
serve, Neidl said.

But negative news reports and analyst research notes can also
undermine a credit card company's confidence in an airline by
contributing to fears that an airline's failure is imminent, said Mike
Boyd, president of the Boyd Group consultancy in Evergreen, Colo.

"It could happen to any airline," Boyd said.

Shares of another discount carrier, AirTran Holdings Inc., tumbled
more than 30 percent Friday as nervous investors wondered whether it
too could face trouble.

After the market closed, AirTran issued a statement saying it is "in
full compliance" with the terms of its credit card agreements, and has
no holdbacks with any of its major credit card processors. The
Orlando, Fla.-based company said its balance of cash and investments
has grown to $358 million through the end of March, from $326 million
at the end of last year.

President and Chief Executive Bob Fornaro called his company "one of
the strongest low-cost carriers operating today" and said it has
"ample balance sheet strength to support our operation."

Meanwhile, Neidl raised his rating on AirTran to "Add" from "Neutral"
and said he does not believe the company is in any immediate danger of
defaulting.

"We would use this opportunity to buy the stock since we believe
AirTran has sufficient liquidity to survive through next year under
the most likely scenario," Neidl wrote in a note to clients issued
late Friday. The carrier's shares jumped 15 percent in after-hours
trading.

Frontier's situation is not the first time credit card companies have
imposed cash withholding requirements on airlines. Many did so in the
months after the Sept. 11 terrorist attacks because of worries about
the industry. Several airlines, in fact, declared bankruptcy in the
years after the attacks, due to the downturn in business and by the
recession earlier this decade. Strict cash withholding requirements
were a factor in Delta Air Lines Inc.'s 2005 bankruptcy.

Now analysts believe most larger airlines have sufficient cash to
weather the current economic downturn and spike in fuel prices. The
six largest airlines -- AMR Corp.'s American Airlines, Delta, UAL
Corp.'s United Airlines, Northwest Airlines Corp., US Airways Group
Inc. and Continental Airlines Inc. -- have a combined $20 billion in
cash on their balance sheets, Mann said. Their credit card processors
won't likely change withholding requirements unless there is a
significant change in operating conditions.

It's the smaller companies with less cash that are more at risk of
facing new cash withholding rules, analysts say.

On Friday, Calyon's Neidl dropped coverage of Mesa Air Group Inc.,
citing its small capitalization. Last week, Mesa said Delta planned to
end a major contract-flying agreement and Mesa sued to keep the deal
intact. Mesa has declined to comment on whether it faces bankruptcy.

Larger carriers canceled thousands of flights affecting more than a
quarter of a million passengers this week to check electrical wiring
in MD-80 aircraft. The inspections were required to comply with
Federal Aviation Administration safety regulations.

American Airlines was the hardest hit with nearly 3,100 cancellations,
including almost 600 on Friday. The airline said it will cancel an
undetermined number of flights on Saturday, but expected to resume
normal operations by Saturday night. The cancellations will cost
American tens of millions of dollars, but Chief Executive Gerard Arpey
said the carrier can withstand the losses.