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Thread: Southwest Preparing a Bid for Frontier Airlines

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    Moderator Matt Molnar's Avatar
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    Southwest Preparing a Bid for Frontier Airlines

    Southwest Airlines Developing Bid Proposal in Frontier Airlines Bankruptcy Court Proceeding

    Low-Fare Carrier Seeks to Acquire Frontier Airlines

    DALLAS, July 30 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV) confirmed today that the carrier is preparing a bid to acquire Denver-based Frontier Airlines, which will be sold at auction in bankruptcy court next month. The carrier has submitted a nonbinding proposal in accordance with the bidding procedures established in the U.S. Bankruptcy Court for the Southern District of New York. The bid is worth a minimum of $113.6 million, which is in excess of the bid currently filed by Republic Airways.

    Submission of a nonbinding proposal gives Southwest an opportunity to engage with Frontier in the due diligence required to determine the scope of a binding proposal to be submitted by the court's Aug. 10, 2009, deadline.

    "We are excited about the opportunity to submit a bid," said Gary Kelly, Southwest's Chairman of the Board, President, and CEO. "We see a strong fit between our Company cultures, a mutual commitment to high quality Customer Service, and similar entrepreneurial roots."

    A successful acquisition of Frontier Airlines will allow Southwest to expand its network with its legendary low fares, add jobs into Southwest, and boost competition in Denver and other cities. Southwest is a qualified investor and is still preparing its proposal; therefore, it is premature to comment on the specifics at this point.

    To view a Q&A with a Southwest Airlines Executive Vice President Corporate Services and Corporate Secretary Ron Ricks, please visit: http://www.blogsouthwest.com/blog/south ... r-airlines.

    Frontier filed for bankruptcy court protection in April 2008. On June 22, 2009, Republic Airways submitted a bid to purchase Frontier for $108.8 million.

    After 38 years of service, Southwest Airlines offers a reliable product with exemplary Customer Service. Southwest Airlines is the most productive airline in the sky and offers Customers a comfortable traveling experience with all premium leather seats and plenty of legroom. Southwest recently updated its gate areas and improved its boarding procedure to make flying Southwest Airlines even more convenient and simple. Southwest Airlines currently serves 66 cities in 33 states, and announced service to Boston Logan, which begins Aug. 16, 2009, and to Milwaukee, which begins Nov. 1, 2009. Southwest currently operates more than 3,300 flights a day and has more than 35,000 Employees systemwide.

    This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements relate to the Company's interest in acquiring Frontier Airlines. These forward-looking statements are based on the Company's current information, intent, expectations, and projections and are not guarantees of future actions or performance. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the Company's ability to receive all necessary approvals, including any necessary governmental or regulatory approvals and the approval of the Company's Board of Directors; (ii) results of the Company's due diligence; (iii) changes to the Company's business plan and strategies; (iv) the Company's being named the winning bidder in the auction process in Frontier's bankruptcy proceeding and the Company's ability to obtain all necessary approvals for the acquisition in Frontier's bankruptcy proceeding, including approval by Frontier's creditors and the bankruptcy court of Frontier's plan of reorganization, (v) the Company's ability to timely and effectively prioritize its revenue and cost reduction initiatives; and (vi) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Therefore, the Company can give no assurance that any bid it submits to acquire Frontier will be successful or that any subsequent acquisition will be completed.
    Ladies and gentlemen, this is your captain speaking. We have a small problem.
    All four engines have stopped. We are doing our damnedest to get them under control.
    I trust you are not in too much distress. —Captain Eric Moody, British Airways Flight 9

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    Re: Southwest Preparing a Bid for Frontier Airlines

    All this is, is WN's attempt at removing a competitor in Denver. How they come out and say it will increase competition is beyond me. WN knows Republic has the foundation to build a strong airline out of Frontier and that will be a threat to WN at Denver. WN did the same thing with ATA, they out bid Airtran and look at where ATA is today?

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    Moderator Matt Molnar's Avatar
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    Re: Southwest Preparing a Bid for Frontier Airlines

    They'd also get 4 extra slots at LGA. W00t.
    Ladies and gentlemen, this is your captain speaking. We have a small problem.
    All four engines have stopped. We are doing our damnedest to get them under control.
    I trust you are not in too much distress. —Captain Eric Moody, British Airways Flight 9

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    Re: Southwest Preparing a Bid for Frontier Airlines

    What did WN do to ATA? I didn't think ATA's demise had anything to do with Southwest.
    Email me anytime at [email protected].

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    Re: Southwest Preparing a Bid for Frontier Airlines

    Quote Originally Posted by GothamSpotter
    They'd also get 4 extra slots at LGA. W00t.
    i'd definately rather see bright blue boeings than whimpy white 'busses.
    it is mathematically impossible for either hummingbirds, or helicopters to fly. fortunately, neither are aware of this.

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    Administrator PhilDernerJr's Avatar
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    Re: Southwest Preparing a Bid for Frontier Airlines

    The animal tails are cool, but I definitely would rather see WN birds at LGA and their special schemes.
    Email me anytime at [email protected].

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    Re: Southwest Preparing a Bid for Frontier Airlines

    Quote Originally Posted by Phil D.
    The animal tails are cool, but I definitely would rather see WN birds at LGA and their special schemes.
    Phil, F9 has two flights a day at LGA, and I see the two animal tails almost everyday.

    WN has 8 flights a day, I usually see at least 5 of them 5 or 6 days a week. You know what I have seen so far, Shamu once and today for the first time a gold classic scheme. That's it. Very dissapointed.

    If WN succeeds they will not want a fleet of A-318/319/320's. They I believe only want to remove a competitor and withone year of their takeover if successful all you will see is a much larger WN operation at DEN, and hopefully some former F9 folks employed with WN and keeping their F9 senority. Nothing more.

    Regards

    LGA777

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    Re: Southwest Preparing a Bid for Frontier Airlines

    Quote Originally Posted by Phil D.
    What did WN do to ATA? I didn't think ATA's demise had anything to do with Southwest.
    Phil when ATA when into Chap 11 AirTran and ATA came to an agreement on AirTran buying out ATA in total. This would have given AirTran all the gates ATA had at MDW allowing them to create the Midwest hub they desired to have. WN stepped in outbid ATA, got ATA's gate ensuring AirTran could not expand. ATA was then sold to your company allowing ATA to pay back WN. In one fell swoop WN secured all of ATA's gates at MDW and let a compeititor run themselves out of biz. ATA's business plan would have never worked and with rising fuel prices and dwindling demand they went under. However if AirTran took them over the operations would have been moved into AirTran. The result would have been far less jobs being lost and some being added.

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    Administrator PhilDernerJr's Avatar
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    Re: Southwest Preparing a Bid for Frontier Airlines

    ATA actually was not sold to my company. They bought us and World.

    But you're referring to 2004, and what I understand of that is more of an AirTran vs. Southwest dispute rather than a negative effect on ATA. It sounds as though you're blaming something on Southwest, but I think AirTran would have done the same thing, as they wanted to keep Southwest out of the mix. Both airlines had the same motivations for MDW.

    ATA was a charter airline that ran some scheduled ops for diversity. They failed because they ran poor numbers on their military charters and was yanked from the program. They still stand as my favorite airline of all time, but their demise was their own fault. Other "rescue" airlines would have chopped them up or made them something they didn't want to be.
    Email me anytime at [email protected].

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    Re: Southwest Preparing a Bid for Frontier Airlines

    Quote Originally Posted by Phil D.
    ATA actually was not sold to my company. They bought us and World.

    But you're referring to 2004, and what I understand of that is more of an AirTran vs. Southwest dispute rather than a negative effect on ATA. It sounds as though you're blaming something on Southwest, but I think AirTran would have done the same thing, as they wanted to keep Southwest out of the mix. Both airlines had the same motivations for MDW.

    ATA was a charter airline that ran some scheduled ops for diversity. They failed because they ran poor numbers on their military charters and was yanked from the program. They still stand as my favorite airline of all time, but their demise was their own fault. Other "rescue" airlines would have chopped them up or made them something they didn't want to be.
    Phil the situation is the same...WN doesn't want Republic coming in and buying Frontier much like WN didn't want AirTran buying ATA. Yes ATA still would have gone by the way side but jobs would have been saved and added since AirTran would have expanded MDW. Much like they would have done in MKE with Midwest, now look at Midwest. WN gave ATA a life line that was tied around their necks from day one, ATA's business plan was doomed from the start. WN wasn't looking out for the best interests of employees, customer's or regions it served, it was the starting point of why ATA failed after Chapter 11.

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    Re: Southwest Preparing a Bid for Frontier Airlines

    lets look at some points from WN's blog...if you can't read between the lines with their language then you need to go back to school. These statements WREAK of falsehood...OH btw remember WN's other merger back in the 80s? Muse Air? What's left of them now?

    We believe our bid proposal will allow Frontier to emerge from bankruptcy. Frontier would continue to operate independently and separately for a period of time with its Airbus aircraft and personnel.
    Meaning WN will dump the Airbus fleet in time.

    Over time, Frontier Employees would be hired into Southwest as needed to support our fleet growth and expanded operations.
    They won't be guaranteed a job and will have to apply just like the guy off the street, and if you’re not needed you’re going to lose your job.

    We believe the acquisition will boost low-fare competition across the country and certainly in the Denver market. And, again, we believes our bid will be seen as the strongest bid by all interested parties, including Frontier Employees, management, and its creditors.
    Basic math tells us this...right now DEN has three major carriers that have a hub or focus on DEN, UAL, Frontier and Southwest...take away Frontier and replace it with an expanded Southwest seems to me we now only have two carriers with a large presence at DEN, not sure how anyone can call that more competition.

    A. As part of our overall due diligence, Southwest Airlines will study Lynx. Until a bid is finalized, it’s too early to say.
    Much like the Airbuses Lynx will go away as well...along with service to cities that will never see the light of day from WN.

    If anyone believes a word of what WN is saying there's a bridge I can sell you in Brooklyn.

    WN had no intent of looking at Frontier until Republic decided to bid on them, they want Frontier gone plain and simple.

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    Re: Southwest Preparing a Bid for Frontier Airlines

    WN had absolutely nothing to do with ATA's demise.

    WN did not own any employees, aircrafts, assets or anything. ATA was its own airline at the time of the shut down simply having a codeshare operation with WN.

    As for everything else, yep that is true. What is left of Morris air is quite a few employees, and SEA, GEG, PDX, BOI couple of northwest pacific stations.

    WN is a vicious airline, and will do what they can to win and grow big. I do think F9 employees should be given the chance to work with WN but alas, I can't have a say in it.

    This is very exciting and interesting to see as an airline employee, as I went through this as a fan of TWA too.

    Alex
    www.southwest.com Bags Fly Free. Anytime, Anywhere on Southwest Airlines. Share the LUV!

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    Re: Southwest Preparing a Bid for Frontier Airlines

    AA/TWA all over again. F9 employees are screwed

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    Re: Southwest Preparing a Bid for Frontier Airlines

    Quote Originally Posted by crj200dispatcher
    AA/TWA all over again. F9 employees are screwed
    As much as I disliked that AA drew down most of what they purchased from TWA the alternative would have been worse. TWA was out of money plain and simple...they weren't able to make their next payroll and if it wasn't for AA buying them they would have went under all together. This is a different situation, WN is aggressively going after Frontier to shut down a competitor.

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    Administrator PhilDernerJr's Avatar
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    Re: Southwest Preparing a Bid for Frontier Airlines

    Quote Originally Posted by T-Bird76
    This is a different situation, WN is aggressively going after Frontier to shut down a competitor.
    I'm not saying it's a GOOD thing, because I'm not happy to see anyone lose their jobs, but this is the nature of the airline industry, more so than other industries. It's capitalism, and Frontier has been struggling as it is for a bit now.
    Email me anytime at phi[email protected].

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