IBJNews

Southwest bid for Frontier could be in trouble

Back to TopCommentsE-mailPrintBookmark and Share

Southwest Airlines Co.'s bid for Denver-based Frontier Airlines Holdings Inc. may have hit turbulence, according to the Dallas Morning News.

Dallas-based Southwest is bidding against Indianapolis-based Republic Airways Holdings Inc. for the rights to acquire Frontier out of bankruptcy.

The newspaper reported late this morning that, in an e-mail purportedly sent from Southwest's pilot union to its members, the union failed to reach a deal last night with Frontier's pilot union over integration terms. Getting that deal is a condition of Southwest's bid.

The newspaper reported that the e-mail from the union says Southwest will ask for an extension on its $170 million bid for Frontier's assets. A bankruptcy court auction is in progress today.
 
 
 

Republic bid $108.75 million for Frontier and intends to let the carrier operate on its own. Southwest would absorb Frontier into its system over the course of two years.

The difference in the bids, however, isn't as wide as it would appear because Republic is a major secured and unsecured creditor of Frontier. A report on the thedeal.com today estimated the difference is actually less than $10 million when factoring in other considerations.

Earlier today, the Denver Post reported that Denver-based business interests are hoping Republic emerges as the winner. In fact, the Metro Denver Economic Development Corp. is encouraging Republic to buy Frontier and move its headquarters from Indianapolis to Denver, according to the newspaper.

Tom Clark, executive vice president of the business group, told the newspaper that his organization has been attempting to "go after all of Republic" because the company would probably maintain and create more jobs in Denver than Dallas-based Southwest.

Frontier has an aircraft-maintenance operation at Denver International Airport, and Clark expressed concern about the future of 200-plus jobs there if Southwest took over, the newspaper reported.

Officials from Republic could not be reached this morning to comment on the report.

Frontier filed for bankruptcy protection in April 2008 after its credit-card processor moved to hold back a big chunk of the proceeds from ticket sales, raising the prospect of a cash crunch. According to court documents, a consultant hired by the airline began contacting potential buyers in January, and some met with the airline's management over the next two months.

Some prospective investors backed out, however, because of lack of available credit and the downturn in the airline industry.


 
 
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

  4. Marijuana is the safest natural drug grown. Addiction is never physical. Marijuana health benefits are far more reaching then synthesized drugs. Abbott, Lilly, and the thousands of others create poisons and label them as medication. There is no current manufactured drug on the market that does not pose immediate and long term threat to the human anatomy. Certainly the potency of marijuana has increased by hybrids and growing techniques. However, Alcohol has been proven to destroy more families, relationships, cause more deaths and injuries in addition to the damage done to the body. Many confrontations such as domestic violence and other crimes can be attributed to alcohol. The criminal activities and injustices that surround marijuana exists because it is illegal in much of the world. If legalized throughout the world you would see a dramatic decrease in such activities and a savings to many countries for legal prosecutions, incarceration etc in regards to marijuana. It indeed can create wealth for the government by collecting taxes, creating jobs, etc.... I personally do not partake. I do hope it is legalized throughout the world.

  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.

ADVERTISEMENT