DENVER—A bankruptcy court judge has approved a severance plan that would give Frontier Airlines’ six top executives $144,180 if they are terminated without cause.
The $144,180 for employees including CEO Sean Menke is roughly equal to five to 10 months’ pay, according to court documents filed Tuesday.
Other Frontier vice presidents and officers at the airline’s Lynx Aviation Inc. subsidiary would receive nine months of pay, while directors and senior directors would receive six months of pay, according to bankruptcy court filings.
The 65 employees at or above the director level previously had no enforceable severance benefits, Frontier said.
Frontier filed for Chapter 11 bankruptcy protection April 10 after credit card processor First Data Corp. sought to hold up to 100 percent of proceeds from ticket sales until flights were completed. First Data previously withheld 50 percent.
Frontier and First Data have since reached a new agreement on the handling of proceeds from ticket sales but have not released details.
The airline said in court documents that the severance it is offering top executives is much lower than executives got at other airlines that went through Chapter 11. United Airlines offered executive vice presidents two years’ pay while Delta Airlines offered a year’s pay, Frontier said.
Since the airline filed for bankruptcy protection, top management, including Menke, agreed to up to a 20 percent cut in compensation. At least three unions also have agreed to temporary concessions.
