PO-3141: ATSB Decision On Frontier Flying Service, Inc.



	FROM THE OFFICE OF PUBLIC AFFAIRS May 31, 2002 PO-3141 ATSB Decision On Frontier Flying Service, Inc. WASHINGTON, DC - The Air Transportation Stabilization Board (ATSB) announced today that it has rejected the application of Frontier Flying Service, Inc. for a Federal guarantee of a $7.2 million financing pursuant to the Air Transportation Safety and System Stabilization Act (Act) and implementing regulations promulgated by the Office of Management and Budget (OMB). The Board concluded its review based on the standards set out in the Act and the OMB regulations and determined that Frontier’s application did not meet the applicable standards. In its application, Frontier emphasized that it expected to be unable to renew its insurance at reasonable rates as a result of the terrorist attacks of September 11 and applied for a Federal loan guarantee as part of a plan to address this issue. However, Frontier recently informed the Board that, in fact, it was able to renew its insurance coverage at acceptable rates. Accordingly, the Board was unable to determine that the proposed Federally guaranteed loan was a necessary part of maintaining a safe, efficient, and viable commercial aviation system in the United States, as required by the Act. The Board also concluded that Frontier’s proposal did not provide a reasonable assurance that Frontier would be able to repay the loan, another of the factors the Board is required to consider under the OMB regulations. The ATSB, established as part of the Air Transportation Safety and System Stabilization Act signed into law September 22, consists of designees of Federal Reserve Board Chairman Alan Greenspan, Treasury Secretary Paul O'Neill and Transportation Secretary Norman Mineta. The designees are Federal Reserve Board Governor Edward M. Gramlich, Treasury Under Secretary for Domestic Finance Peter R. Fisher and Department of Transportation General Counsel Kirk K. Van Tine. David Walker, Comptroller General of the United States, is a non-voting member of the Board. Additional information about the ATSB is available on its web site, www.treas.gov/atsb.