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Frontier filing surprised First Data CEO

By Jeff Smith, Rocky Mountain News (Contact)

Published May 9, 2008 at 1:29 p.m.
Updated May 9, 2008 at 1:29 p.m.

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There may be the perception that First Data had “deep knowledge” Frontier Airlines would file for bankruptcy reorganization once the Greenwood Village credit-card processor demanded more collateral.

But that wasn’t the case, First Data CEO Michael Capellas reiterated today.

“I’ll be honest with you. We were surprised by the bankruptcy,” Capellas said in a keynote speech at the annual meeting of the Southeast Business Partnership today.

Capellas said First Data treated Frontier like any customer, applying “very sophisticated, very precise” risk assessment, which includes identifying certain criteria in context with any contract.

“This is the business we’re in. We mitigate risk,” Capellas said.

He echoed previous company statements that First Data will “try to work with Frontier in as constructive of a manner” as possible.

In addition to adhering to the line in regarding to Frontier, Capellas spoke about the economy, predicting the current downturn would last six to eight more months.

He said he had met with a group of economists in Washington last night whose opinions ranged from a short recession to a disaster.

Personally, Capellas said, “I do think we are through the worst of the liquidity problem.”

But he said individuals still need to reduce their debt, and he predicted “individual consumption” will slow for another two to three quarters.

First Data is in a good position to know about economic trends, since it processes more than 50 percent of all credit-card transactions and increasingly tracks consumer behavior for its customers.

Comments

  • May 9, 2008

    4:10 p.m.

    Suggest removal

    Diff writes:

    Two word about First Data
    Greedy Bastards!

  • May 9, 2008

    7:45 p.m.

    Suggest removal

    SteveM writes:

    Sounds like somebody isn't telling the truth.

  • May 9, 2008

    11:20 p.m.

    Suggest removal

    kathyM writes:

    There's no way they couldn't have known--both parties were in talks for months.