madmax757

Frontier or Indigo ? Theres a difference. I could easily see indigo selling 50 options to United for 15 million each.

Aero1900

They could but that's not how you grow the business or the stock price. Selling orders is a last ditch effort to avoid insolvency which we clearly aren't looking at.

To sell the orders would be absolutely devastating to the stock price and is basically the last thing they would do. Modern day American is to do anything to shore up the stock price. It's all about growth, which benefits pilots especially well

Stayontarget

I still haven’t seen direct evidence Indigo actually owns the orders. I’ve seen evidence to the contrary however.

hercretired

Indigo and Bill Franke ordered the airplanes. They will be "operated by" Frontier and the other airlines. Franke, not Biffle, nor any other CEO of the Indigo Group airlines, is often quoted regarding the orders.

Indeed a good question, we are not the only one who is not clear on this. A recent investor call had an analyst question the "accounting practices" of these leaseback arrangements.

https://aviationweek.com/shownews/dubai-airshow/air-lease-corp-indigo-partners-log-big-orders-post-2025-delivery, opens new tab

“This order reaffirms our portfolio airlines’ commitment to consistent growth through the next decade. The Airbus A321neo and A321XLR have industry-leading efficiency, low unit costs and a substantially reduced carbon footprint relative to prior models. With these aircraft, Wizz, Frontier, Volaris and JetSMART will continue to offer low fares, stimulate the markets they serve and improve their industry-leading sustainability profile,” said Bill Franke, Managing Partner of Indigo Partners.

https://www.airbus.com/sites/g/files/jlcbta136/files/87ea345a233866a90af9a37b34f87b8e_EN-Indigo-Partners-to-add-50-A321XLRs.pdf

https://www.airbus.com/en/newsroom/press-releases/2021-11-indigo-partners-portfolio-airlines-order-255-a321neo-family

Stayontarget

I used to think this way as well but a nagging question made me dig further a while back. The question was when does Indigo transfer the airplane to Frontier and then Frontier to the leasing company? Fortunately the court case with AMCK gave some clarity. But before we get there…

First I noticed that Indigo doesn’t actually have any aircraft on order according to Airbus. The orders are by the respective airline without special asterisks. Go to the downloadable file, then the orders sub cat and you can see each airline. Our orders are (probably) ours. (Don’t confuse the Indian airline Indigo…a little annoying)

https://www.airbus.com/en/products-services/commercial-aircraft/market/orders-and-deliveries

Second, Wizz put in their own order for an additional 75 in 2023. Why didn’t Indigo place it? At this point even if we can transfer orders to our partner airlines nobody else is in a position to take them. Volaris and Jet smart? Nah. Wizz has their own huge order. Really we would be most likely to get other partners airlines at this point if that is even possible. Yes orders can be deferred or slots sold but that is not what I am referring to in this discussion.

Third, I looked into these links about a year ago. I noticed that in all of them there is a variation of the term “Joint agreement.” In particular the Airbus site I read it as the airlines purchasing the aircraft but with Indigos help. The title even says the airlines placed the order, not Indigo. Indigo was able to get their airline partners to go in on an order together at the same time to get a better deal. They were just the middle man that brought the parties together. I also can find plenty of talk from the CEOs regarding the orders but that is less useful and frankly irrelevant.

Last piece of the puzzle was the court case with AMCK. Since this is a legal document I assume there is very few errors vs say a standard news article. I suggest reading the verdict, even besides this discussion, because it gives an interesting glimpse into some of the behind the scenes happenings. Midway in the verdict is the order/lease/purchase process. It states that Frontier is liable for the purchase of the aircraft the date of delivery if a lease option cannot be secured, not indigo , which can only mean they are our orders at that point. We are the liable party. From my recollection Indigo is not mentioned a single time in the verdict. So if they are our orders at that exact point they must have become our orders at some point.

I believe the answer to my initial question is, it’s impossible to find out when Indigo transfers the aircraft to Frontier because it never actually happens. Indigo comes in as a middle man to secure a larger order at better rates than would otherwise be possible for each individual airline. But each of those airlines orders are their own just like any other airline.

Aero1900

Everyone loves to say that "Indigo could just transfer the orders to JetSmart or Volaris"

I think the odds of that are slim to none. The US economy is vastly larger and doing much better than the Mexican or Chilean economy. If airplane orders are getting swapped, odds are they are coming to us.

hercretired

All good points above. I am sure the orders and leasebacks and other agreements are carefully crafted by the lawyers.

Not sure this can be determined unless you work in a cubicle in finance at HQ

Stayontarget

Agreed. But I’ll give it my best shot nonetheless.

Cameronhoward

I've been waiting for the June seniority list to drop. The CBA in 22.B.3 says the company has to post it by the first Wednesday of the month which to my non-lawyer brain sounds like it has to be released by 11:59pm Tuesday night but it hasn't dropped yet. Am I wrong or does it just need to be released by 11:59pm tonight?

fcoolaiddrinker

Any time Wednesday (without looking it up more than likely ldt den) would comply with that language you wrote. Think of language that way. Would they be in compliance if they did whatever scenario you’re trying to figure out.