Southwest Airlines today said it was preparing a bid to acquire bankrupt Frontier Airlines that would exceed a competing bid by Republic Airways Holdings. Denver-based Frontier, bankrupt since April 2008, will be sold next month through the U.S. Bankruptcy Court for the Southern District of New York.
Southwest today said its bid for Frontier would be worth a minimum of $113.6 million, more than the $108.75 million bid Republic submitted in June, which the bankruptcy court approved this month. Southwest must submit its bid by Aug. 3 and make a binding offer for Frontier by Aug. 10.
In a blog post on the carrier's Web site, Southwest executive vice president of corporate services and corporate secretary Ron Ricks called the move "an opportunity to expand our network with legendary low fares, add jobs into Southwest and boost competition in Denver as well as other cities with our low fares and high-quality customer service."
Frontier flies to more than 50 destinations from its Denver International Airport hub and held 22.6 percent of 2008 passenger marketshare there, according to the airport, second only to the 36.9 percent held by United Airlines, a figure that grows to 47.8 percent when including regional carriers that serve as United Express. Southwest held 9.3 percent.
Southwest began Denver operations in January 2006, after a 20-year absence, and has continually increased service there even while eliminating service to other destinations (BTNonline, Jan. 22, 2008)
Indianapolis-based Republic operates three regional carriers—Chautauqua Airlines, Republic Airlines and Shuttle America—and is in the process of acquiring Midwest Airlines from private equity firm TPG Capital for $6 million in cash and a $25 million, five-year note (BTNonline, June 24)
. Frontier would serve as a wholly owned subsidiary alongside its other carriers, Republic said when announcing its bid in June.
Southwest last year went through bankruptcy court to purchase the assets of bankrupt ATA Airlines, which paved the way for its first operations in New York's LaGuardia Airport (BTNonline, Nov. 19, 2008)
. Frontier filed for Chapter 11 bankruptcy protection last year after claiming its primary credit card processor increased the share of customer receipts it would hold (BTNonline, April 11, 2008)