Southwest Bidding For Frontier

Southwest Airlines announced today that it is preparing to bid for Frontier Airlines in a bankruptcy auction next month, the Associated Press reports.

Frontier has been in bankruptcy since April 2008, and Republic Airways has already bid $108.8 million for it. That sale was approved by a bankruptcy judge but can be overturned if a better offer comes along. Southwest says its bid will be “worth a minimum of $113.6 million.”

Denver-based Frontier has a fleet of 51 Airbus A319s, A318s and A320s. Dallas-based Southwest, with a fleet of 544 Boeing 737s, says it would operate Frontier as a separate subsidiary at first, and gradually combine operations. Southwest managers confirmed in a conference call this afternoon that the Airbus jets would be phased out as Southwest gradually expands its fleet onto the Frontier routes.

Republic Airways, with its subsidiaries Chautauqua Airlines and Shuttle America, operates regional jet service for several major airlines. It proposes operating Frontier as a separate subsidiary. Republic has the same plans for Midwest Air, which it also plans to operate as a subsidiary. And it has a major stake in Mokulele Airlines, an interisland carrier in Hawaii.

The bottom line here for consumers is hard to parse, at this point. Southwest may want not only a way to expand its network but to block Republic from becoming something that looks a lot more like Southwest.

A successful bid would put Southwest in several cities it does not serve now, including Atlanta and Reagan National in Washington. Frontier also has flights to several destinations in Mexico, as well as to San Jose, Costa Rica. Southwest currently has no international flights.

The question of what Southwest would do with Frontier subsidiary Lynx Aviation remains open.

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