Republic Airways Holdings is officially the winning bidder in the acquisition of Frontier Airlines.
The Indianapolis-based US regional operator has agreed to waive the distributions in the $150 million unsecurclaim it logged under Frontier's Chapter 11 restructuring. Republic and Frontier had an Embraer E-170 feeder agreement that terminated once Frontier declared Chapter 11 bankruptcy protection in April 2008, and Republic is one of Frontier's largest unsecured creditors. Republic has also supplied Froniter $40 million in debtor-in-posession financing. Southwest Airlines this week submitted a $170 million bid versus the $108 million bid tabled by Republic.
Key to Republic's win was the breakdown in a seniority list integration agreement between Frontier and Southwest pilots. "Key in its position, Southwest was not willing to remove the need for the two Pilot Unions to reach agreement," says Southwest in a statement .
"We appreciate the participation of both Republic and Southwest Airlines in our auction process," says Frontier President and Chief Executive Officer Sean Menke. "We are pleased to have Republic as a plan sponsor that will allow Frontier to emerge from bankruptcy as a well-financed, competitive and sustainable airline.