Republic purchase of Frontier, Midwest could create entirely new U.S. major airline

The somewhat surprising victory of Republic Airways over Southwest Airlines in its bid for bankrupt Frontier Airlines may be the emergence of a new airline that is part major carrier and part regional carrier, Republic President and CEO Bryan Bedford said recently.

Having made the acquisition of Denver-based Frontier final, Bedford spoke last week on the Indianapolis public broadcasting station WFYI's news program "Inside Indiana Business." He said that despite the likely need to make changes in job types in Milwaukee, where Midwest Airlines is based, and Denver, Bedford maintained that there would still be a "significant employment presence" in both cities for the time being, suggesting that Republic would try to keep most of the two jet airlines' operations intact for now.

Republic submitted what it described as "the highest and best bid" for Frontier, which included "substantial improvements from its original investment proposal," such as waiving a $150 million pre-bankruptcy claim against Frontier. Contrary to competing bidder Southwest Airlines, Republic also claimed antitrust clearance from the U.S. Department of Justice and made no special requirements such as union clearance from its pilots union -- exactly what made Southwest's bid untenable in the end. Its Southwest Airlines Pilots Association union couldn't get an agreement with the Frontier pilots union in order to allow the Southwest proposal to remain viable.

"We said all along that we would only move forward on this deal if it proved to be the right decision for our Employees and financially prudent for our Company," said Gary Kelly, Southwest's Chairman of the Board, President, and CEO. "We have a mission to preserve and protect our Culture and the best interests of our Employees, Customers, and Shareholders. This was a great opportunity that required us to act fast. A lot of people worked very hard with every intention of making this work. We were fortunate to be in a position to examine the acquisition to see if it was the right decision for Southwest Airlines. We chose not to amend our bid to remove the labor requirement, a key reason our bid was not selected. Our congratulations to Republic Airways and Frontier Airlines."
 

- by Jim Brown , Reporter for HelloFlight.com  (Click to leave a message)