US Regional carrier, Republic Airways, has won a takeover bid for the bankrupt Frontier Airlines on Thursday, for $108 million after Southwest Airline’s bid was rejected.
Southwest made a bid of $170 million but was deemed unacceptable as the carrier refused to back down from a requirement that its pilots and Frontier’s work out their integration before the deal.
Frontier said that Republic had made several alterations to its original bid and already received a go-ahead from the government for the deal to take place.
The airline said the plan allows for it and it’s regional airline, Lynx, to ‘maintain normal operations’ as a subsidiary of Republic, which will mean travellers will see little change.
So far, Republic has been a regional carrier, and the move will bring Republic to the likes of the major players in the US air travel market like United, American, Delta and Southwest.
“Frontier has made impressive strides in returning to sustained profitability in a challenging and uncertain economic environment,” Republic Chairman, President and CEO Bryan Bedford said in a written statement.
The surprise bid by Southwest, which eventually reached $170 million included some repayments of Republic’s loan appeared likely to win, and purchasing Frontier would have eliminated a serious competitor in the Denver market, a major hub for both airlines.
Southwest Chairman, President and CEO Gary Kelly called the potential Frontier deal “a great opportunity that required us to act fast. A lot of people worked very hard with every intention of making this work.”
Frontier Airline Pilots Association President John Stemmler said that the pilot’s are pleased that the process worked, and that the deal allowed for the entire pilot group to remain employed.
Thanks to Associated Press for the above quotes. For more information please visit their website.
