Frontier Airlines, First Data sign pact on credit-card processing

Frontier Airlines and First Data Corporation have entered into an agreement regarding continued processing of Frontier Airlines’ Visa and MasterCard charges without any interruption. The agreement, according to a statement from Frontier Airlines, provides First Data with “appropriate protection for continuing its processing work for customer credit card purchases on a ‘business as usual’ basis.”

Frontier Airlines is a major low-cost airline based at Denver International Airport in Denver, Colorado, the United States. Frontier offers routes to over 60 destinations in the United States, Mexico, Canada and Costa Rica. It maintains its sole hub at Denver International Airport, and provides regional service to the surrounding Rocky Mountain-States through a code-share agreement with Great Lakes Airlines.

Currently in its 4th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport and employs about 6,000 aviation professionals.

First Data Corporation is a payment processing company based in Greenwood Village, Colorado, the United States. It provides electronic commerce and payment solutions.

First Data, the company’s website firstdata.com says, serves over 5.4 million merchant locations, 2,000 card issuers and their customers. The company’s portfolio includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as internet commerce and mobile payment solutions. Its STAR Network offers PIN-secured debit acceptance at ATM and retail locations.

Frontier Airlines is expected to file a motion with the Federal Bankruptcy Court in New York to approve the agreement on credit-card processing in the next few days, the website earthtimes.org has reported.

According to reports, Frontier Airlines, which has daily flights to Denver from Wichita’s Mid-Continent Airport, filed for Chapter 11 bankruptcy protection in April 2008.

At that time, Frontier Airlines had blamed First Data for its troubles. The card processor reportedly planned to increase the revenue held in reserve until Frontier customers completed their flights, a credit-risk-mitigation technique commonly called “holdback.”

A senior executive of Frontier Airlines had said at that time publicly that the change in policy by First Data had “pushed Frontier Airlines into a liquidity crisis, necessitating the bankruptcy filing.”