How long for a contract?
07-21-2024, 10:17 AM
#541
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Joined APC: Jul 2009
Posts: 638
The last earnings call an investor complained to Barry that it seems Frontier is more concerned about making money with leases than flying people. It’s a little hazy but my understanding is as such…
Example: We order a group of planes for 70M each. The day we would be required to fork over the money to Airbus for a plane we sell that order to the lessor for 100M. In exchange we sign a lease term on that aircraft to that lessor for 400k per month. Company shows it as we made 30M on the quarterly report.
Example: We order a group of planes for 70M each. The day we would be required to fork over the money to Airbus for a plane we sell that order to the lessor for 100M. In exchange we sign a lease term on that aircraft to that lessor for 400k per month. Company shows it as we made 30M on the quarterly report.
07-21-2024, 10:19 AM
#542
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Joined APC: Jul 2009
Posts: 638
if you don’t understand SLB profits and how incredibly important they are to F9, you really need to head over to the Frontier Investor Relations page or somewhere else to read up on that. Kirby blames us for over-supplying capacity, but he doesn’t mention the fact that we have to keep taking these planes because the operation is not independently profitable without SLB.
The idea is to keep the operation profitable or near profitable with these SLB profits until F9 has the scale to be profitable without SLB profits. At least that’s my understanding.
The idea is to keep the operation profitable or near profitable with these SLB profits until F9 has the scale to be profitable without SLB profits. At least that’s my understanding.
07-21-2024, 08:50 PM
#543
Almost there
Joined APC: Apr 2021
Posts: 1,283
The "profits" from Sale Lease Back transactions are not part of the "net profit" number. The proceeds from any SLB are added to our balance sheet. If we show a "net profit" of $0 that $0 is not impacted in any way by sale lease backs. For example, in Q1 we took delivery of six planes and our cash balance sheet increased by $48 million but that $48 million is NOT baked into the net profit for the quarter. In other words, our "profitability" is based upon revenues (fare and non-fare) minus expenses/liabilities. It is a good thing that our cash on hand is increasing slightly each quarter but again we are not "surviving" on the proceeds from SLB's.
07-23-2024, 06:24 PM
#544
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Joined APC: Jul 2009
Posts: 638
It is a specific line item on the balance sheet straight from the 10Q. $48 from sale lease back. The cash and cash equillies difference doesn't exactly equal $48 year over year because there are a half dozen other line items that go into the mix.
07-23-2024, 06:51 PM
#545
Almost there
Joined APC: Apr 2021
Posts: 1,283
Thanks. I look closer at that one.
07-24-2024, 06:32 PM
#550
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Joined APC: Nov 2012
Position: 1900D CA
Posts: 3,476
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