Southwest offers $113.6 million for Frontier
31 July 2009
One of the world's largest low-cost carriers, Southwest Airlines Co. (Southwest) has submitted a rival bid over Republic Airways Holdings Inc (Republic) for acquiring the bankrupt Frontier Airline Holdings Inc. (Frontier) for a minimum of $113.6 million, aiming to firm up its Denver market and expand its wings to Mexico.
Frontier confirmed yesterday that it received an initial non-binding proposal from Southwest to acquire the company under the procedures approved by the US bankruptcy court.
Earlier this month, Frontier entered into an investment agreement with Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America by which Republic agreed to purchase 100 per cent of the stock of Frontier upon its emergence from bankruptcy for $108.8 million, which was approved by the court.
However, as per the agreement, Frontier holds the right to seek better competing bids from interested parties keeping a deadline of 10 August for the final proposal. Subsequently, the best one will be determined through and auction on 11 August.
The company filed for reorganisation under Chapter 11 of the US Bankruptcy Code on 10 April 2008 and expects to come out from bankruptcy this autumn.
Frontier Airlines Holdings Inc. is the parent company of Denver-based Frontier Airlines which is the second largest airline operator at Denver international airport employing 5,000 people and owning 51 aircraft with one of the youngest Airbus fleets in North America. It flies to over 50 destinations in the US, Mexico and Costa Rica.