IBJNews

Southwest bids $170M for Frontier Airlines

Back to TopCommentsE-mailPrintBookmark and Share

Southwest Airlines Co. said today it's bidding $170 million to buy Frontier Airlines Holdings Inc. out of bankruptcy protection, surpassing an earlier bid of $108.8 million by Indianapolis-based Republic Airways Holdings Inc.

The bid sets up an auction for Frontier. The auction, originally slated for tomorrow, is expected to begin on Thursday.

A bankruptcy judge had already approved the sale of Frontier Airlines Holdings Inc. to Republic. But the process left the door open for other bidders. On July 30 Southwest put in a nonbinding bid of $113.6 million.

Denver-based Frontier has been operating under Chapter 11 protection since April 2008.

Republic said it would keep Frontier mostly intact and operate it under its own name.

Southwest has said it would operate Frontier as a separate, wholly-owned subsidiary for a couple of years until its operations can be combined with Southwest.

Southwest is interested in Frontier because it wants to strengthen its position in Denver and speed the low-cost carrier's expansion into new markets, such as Atlanta and resort areas in Mexico.

Southwest recently began operating in Denver, where it also competes against UAL Corp.'s United Airlines.

Mike Boyd, an airline consultant in the Denver area, said that explains Southwest's interest in Frontier.

"This is about a tactical need by Southwest to take out their major competitor in Denver," Boyd said in late July. "They've got to make Denver profitable, and if they're going to do that, they need to take out Frontier."

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.

Republic submitted its bid in May. It has extended Frontier a $40 million debtor-in-possession loan and holds a $150 million unsecured claim.

Republic Airways owns Chautauqua Airlines, Republic Airlines and Shuttle America.
Southwest Airlines Co. said today it's bidding $170 million to buy Frontier Airlines Holdings Inc. out of bankruptcy protection, surpassing an earlier bid of $108.8 million by Indianapolis-based Republic Airways Holdings Inc.

The bid sets up an auction for Frontier. The auction, originally slated for tomorrow, is expected to begin on Thursday.

A bankruptcy judge had already approved the sale of Frontier Airlines Holdings Inc. to Republic. But the process left the door open for other bidders. On July 30 Southwest put in a nonbinding bid of $113.6 million.

Denver-based Frontier has been operating under Chapter 11 protection since April 2008.

Republic said it would keep Frontier mostly intact and operate it under its own name.

Southwest has said it would operate Frontier as a separate, wholly-owned subsidiary for a couple of years until its operations can be combined with Southwest.

Southwest is interested in Frontier because it wants to strengthen its position in Denver and speed the low-cost carrier's expansion into new markets, such as Atlanta and resort areas in Mexico.

Southwest recently began operating in Denver, where it also competes against UAL Corp.'s United Airlines.

Mike Boyd, an airline consultant in the Denver area, said that explains Southwest's interest in Frontier.

"This is about a tactical need by Southwest to take out their major competitor in Denver," Boyd said in late July. "They've got to make Denver profitable, and if they're going to do that, they need to take out Frontier."

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.

Republic submitted its bid in May. It has extended Frontier a $40 million debtor-in-possession loan and holds a $150 million unsecured claim.

Republic Airways owns Chautauqua Airlines, Republic Airlines and Shuttle America.
 

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. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

ADVERTISEMENT