Republic Airways Holdings will begin meeting prospective buyers of its low-cost subsidiary Frontier Airlines this month, and aims to decide on a sale in early 2013.
Republic's chief executive Bryan Bedford says in an earnings call today that the company has made "significant progress" in its effort to spin off Frontier, and is "cautiously optimistic" that it will resolve the Frontier sale early next year.
In the scenario of an industry event that could affect the sale, Republic will embark on an initial public offering (IPO) for Frontier, an option that it previously said it was considering, says Bedford.
Frontier is in the process of becoming an ultra low-cost carrier, like Allegiant Air and Spirit Airlines.
Bedford says the carrier's results in the third quarter show that it is turning in the right direction. Frontier posted pre-tax income of $29.8 million in the third quarter, turning from a pre-tax loss of $1.5 million in the corresponding quarter a year ago. Its operating unit cost excluding fuel fell 3.1% in the quarter to 6.86 cents.
Frontier's ancillary revenue grew 20% year-on-year in the third quarter, a result which Frontier's vice president of network and revenue Greg Aretakis says the airline is pleased with. In June, Frontier completed a project to add six seats to each of its Airbus A320s, taking the total number of seats on board to 168.