Southwest Joins Bidding for Bankrupt Frontier Airlines

July 31, 2009

(ChattahBox) — Southwest Airlines is reportedly preparing a bid to acquire bankrupt Frontier Airlines thwarting a rival bid, both carriers said on Thursday.

The nonbinding proposal worth a minimum of $113.6 million, from Southwest exceeds a current bid for Frontier by Republic Airways Holdings, which is in the midst of a buying spree in the industry.

Denver-based Frontier filed for bankruptcy protection in April 2008, after Southwest moved into the Colorado market.

Frontier said in June that it had reached a deal to sell itself to Republic for $108.8 million, so that it could exit bankruptcy protection as a Republic subsidiary. A bankruptcy court judge approved the agreement earlier this month.

Frontier will be sold at an auction in bankruptcy court perhaps on August 11th, and expects to emerge from Chapter 11 bankruptcy protection in the fall.

Dallas-based Southwest which follows a low-cost business model, operates an extensive point-to-point network while Frontier runs a hub-and-spoke system. A deal would force Southwest, to operate and maintain two different types of aircraft adding Airbus aircraft to its all-Boeing fleet, but gives the airline its first international destinations.

Via: CNN


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