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Southwest bids more than $170 million for Frontier
Tuesday August 11, 2009
Southwest Airlines yesterday confirmed its submission of a binding cash offer worth more than $170 million to acquire Denver rival Frontier Airlines, which now will be sold at auction because Republic Airways Holdings also has placed a bid.
When announcing its nonbinding interest in late July, SWA said its offer would be worth at least $113.6 million, eclipsing Republic's US Bankruptcy Court-approved proposal of $108.8 million (ATWOnline, July 31).
Explaining the difference in value, SWA Executive VP Strategy and Planning Bob Jordan said, "Our submission about 10 days ago really wasn't a bid. It was just a placeholder to get us into the process. . .This is our bid." He made his comments during a conference call with reporters. The auction is expected to begin Aug. 13, Southwest said, and the winning bid remains subject to approval by both the court and the US Dept. of Justice.
SWA said its offer includes acquisition of "approximately" 80% of Frontier's 51 A320 family fleet--around 40 aircraft, according to Jordan--and the entirety of its Lynx Aviation subsidiary, which flies Q400s. SWA will transition out of the A320 family aircraft into 737s over a period of approximately 24 months.
