US airline files for bankruptcy

Frontier flies to destinations across the US and Latin America

Budget carrier Frontier Airlines has filed for bankruptcy protection in the US, but has said it will keep flying.

The move came after its credit card company tried to withhold the proceeds of card payments from Frontier.

Four airlines have gone out of business in the past two weeks, including Hong Kong-based airline Oasis, whose sudden collapse left passengers stranded.

The rising cost of fuel and the slowdown in economic growth is causing problems for airlines.

US carriers, Aloha Airlines, ATA and Skybus have all ceased operating in the past fortnight.

'Severe restraints'

Frontier Airlines said it expected to be able to continue to operate a full schedule of flights and to pay suppliers and staff.

Filing for Chapter 11 bankruptcy protection enables Frontier to prevent its credit card processor from withholding payments.

"This change in established practices would have represented a material change to our cash forecasts and business plan," said Frontier chief executive Sean Menke.

"Unchecked, it would have put severe restraints on Frontier's liquidity and would have made it impossible for us to continue normal operations."

Frontier was founded in 1994, and flies to destinations across the United States and Latin America from its base in Denver, Colorado.