In an announcement made Tuesday December 3, 2013, private investor group Indigo Partners, LLC agreed to purchase Frontier Airlines from Republic Airways Holdings, Inc. for $36 million is cash. Indigo Partners will also assume $109 million in debt currently owed by Frontier. Frontier was previously purchased by Republic Airways Holdings, Inc. in 2009.
Indigo Partners has a history of investment in low cost carriers as in 2006, it made a large investment in Florida-based Spirit Airlines. Subsequently, Indigo has begun divesting itself from Spirit Airlines. Indigo also has investments in Hungary-based Wizz Air Holdings and Mexican carrier Volaris Airlines.
Frontier is expected to continue implementing an Ultra Low Cost Carrier (ULCC) business plan that, similar to Spirit, will charge ultra low fares, but supplement its income with a larger number of additional fees. Frontier had begun adopting the ULCC model last year and it is expected that the Indigo leadership will continue to streamline costs while infusing capital to allow the airline to expand quickly.
Indigo Management Partner William A. Franke commented “Today is an exciting day for Frontier Airlines and Indigo Partners, as we can now embark on a new chapter in Frontier’s history of providing safe, reliable and fairly priced air service”. Franke also noted “As air travel costs have moved higher, demand has grown for more affordable option and more choices. One key element of Frontier’s future success will be operating as an ultra low cost carrier that offers low fares”.
Denver-based Frontier Airlines operates a fleet of Airbus A319 and A320 aircraft, employs 4,000 staff and flies to more than 75 destinations. The purchase is not expected to affect the airline’s order for the new Airbus A320neo aircraft placed in 2011.
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