Frontier’s future under Republic bodes well for Aspen market
August 15, 2009
ASPEN – Resort officials in Aspen/Snowmass likely breathed a sigh of relief this week when Republic Airways prevailed over Southwest Airlines in its bid for Frontier Airlines, a carrier that serves the Aspen market.
Republic Airways won the bankruptcy court action Thursday, purchasing Denver-based Frontier for nearly $108.8 million after Southwest’s $170 million bid was rejected because pilots for the two airlines couldn’t work out their integration before the deal would close.
With a Southwest takeover and subsequent merger, the future of Frontier’s existing service routes was uncertain, though Southwest had announced this week it would acquire the aircraft used by Frontier subsidiary Lynx Aviation, which operates the Denver-Aspen connection.
As a stand-alone subsidiary of Republic, Frontier said plans call for it and Lynx to “maintain normal operations.”
“It’s very, very welcome news to anyone who loves Frontier Airlines … Frontier is going to survive,” said Bill Tomcich, president of reservation agency Stay Aspen Snowmass and the resort’s liaison to the airline industry.
While the Southwest takeover bid presented interesting possibilities, assuming the Lynx service survived in the long run, it also presented “a great deal of uncertainty,” he said.
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Business as usual for Frontier and Lynx will presumably mean continued service between Denver and Aspen on the airline, which is currently flying five daily flights between Aspen and Denver and will offer four daily flights for the winter season, according to Tomcich.
Frontier began serving Aspen through its Lynx startup in April 2008, giving United Airlines some head-to-head competition on the route and bringing down fares as a result. Though Frontier subsequently pulled its Lynx service out of various mountain resort markets, the Aspen route has continued to be profitable for the airline, according to Tomcich.
About a month before Frontier launched its Aspen service, it filed for bankruptcy protection. Republic loaned money to Frontier during its Chapter 11 reorganization and subsequently offered to buy Frontier out of bankruptcy.
Southwest’s surprise bid, which eventually reached $170 million including repayment of Republic’s loan, looked likely to win. Southwest had enough cash to simply write a check for Frontier, and it had the motive. Southwest has turned Denver into one of its key airports, but it faced strong competition both from Frontier and UAL Corp.’s United, which has a hub there. Buying Frontier would have eliminated one of those competitors outright.
In a written statement, 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.”
But in making its bid, Southwest insisted that pilots agree first on how they would integrate their so-called seniority list, the ranking that determines pilot scheduling and layoff order. The issue tripped up the deal.
The Associated Press contributed to this report.