The main shareholders of Kansas City-based Vanguard Airlines have taken an 8% shareholding in Denver-based Frontier Airlines and hinted about a possible combination of the two regional US airlines.

The investors, headed by William Hambrecht, say that it is desirable for Frontier to explore various relationships with Vanguard or others. The Hambrecht investment represents the second-largest stockholder in Frontier.

Speculation of a Frontier/ Vanguard tie-up comes a year after a merger of Frontier with now-defunct Western Pacific Airlines fell through. Western Pacific's demise has helped Frontier's earnings in recent financial quarters. Frontier saw $10 million net income for its fiscal second quarter. Net income for the six-month period ending 30 September was $10.3 million. In October, Frontier leased two new Boeing 737-300s, bringing Frontier's fleet to nine 737-300s and eight 737-200s.

Vanguard reported a modest $323,000 net profit for the quarter ending 30 June, its first profitable quarter since starting in 1994. It serves eight US cities and eyes niche markets not served by Southwest Airlines. Its fleet includes nine 737-200s, and Vanguard seeks additional capital to buy or lease newer aircraft over the next few years.

Source: Flight International