Southwest boosts Frontier bid by 50 per cent to $170 million
11 Aug 2009
One of the world's largest low-cost carriers, Southwest Airlines Co. (Southwest) has raised its offer for acquiring the bankrupt Frontier Airline Holdings Inc. (Frontier) to $170 million, up by 50 per cent from its earlier offer, aiming for a stronger foothold in the Denver market and spread its wings to Mexico.
Southwest confirmed yesterday that the company has submitted its binding cash offer of more than $170 million to Frontier in accordance with the procedures established in the US Bankruptcy Court. Yesterday was the deadline fixed for the final bids for the proposed takeover of Frontier, which was filed for bankruptcy protection on 10 April 2008.
The sweetened offer includes the Lynx Aviation, the short haul subsidiary of Frontier.
A fortnight ago, Southwest presented an initial non-binding offer of $113.6 million for the acquisition of Frontier, countering the bid from Republic Airways Holdings Inc.(Republic) which offered $108.8 million for the ailing airline operator that was approved by both Frontier and the Court. (See: Southwest offers $113.6 million for Frontier)
Southwest's chairman of the Board, president, and CEO, Gary Kelly said: "We believe our bid ultimately should be seen as the strongest offer by all interested parties, including Frontier, its creditors, employees, and customers. Southwest is a financially stable company, and through this acquisition, will continue to provide Denver its historically low fares into the future.''
Southwest contemplates to acquire approximately 80 per cent of Frontier's Airbus fleet which is about 40 aircraft and all of Lynx which include 10 Bombardier Q400 turboprop aircraft.
