Southwest competes with Republic to buy Frontier

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Southwest Airlines will submit at least a $113.6 million bid to buy competitor Frontier Airlines, which will auctioned off in bankruptcy court next month.

The low-cost carrier's bid is larger than Republic Airways Holdings recent offer of $108 million for its former partner Frontier, which entered Chapter 11 bankruptcy protection in April 2008.

Southwest intends to initially operate Frontier as a wholly-owned subsidiary until the carrier could be combined into Southwest, carrier executive vice president corporate services and corporate secretary Ron Ricks says on the Southwest blog. The carrier will also study options for Frontier subsidiary Lynx, a Bombardier Q400 operator, Ricks says.

A final decision has not been made about Lynx as Southwest is still preparing its proposal, he adds.

The carrier intends to submit a binding offer by the bankruptcy court's 10 August deadline assuming the court determines Southwest is a qualified bidder,

"Southwest believes our bid ultimately will be seen as the strongest bid by all interested parties, including Frontier employees, management and its creditors," Ricks says.

He adds that that the acquisition of Frontier will enable Southwest to expand its network and boost competition in Denver and other cities.

Dallas-based Southwest launched several markets from Frontier's Denver hub in early 2007 and competition between the operators intensified throughout 2008, with Southwest adding flights even as Frontier trimmed capacity.