Southwest Prepares $113.6M Bid For Frontier AirlinesLast update: 7/30/2009 1:35:17 PM
DOW JONES NEWSWIRES
Southwest Airlines Co. (LUV) is preparing a bid of at least $113.6 million for carrier Frontier Airlines Holdings Inc. (FRNTQ), which will be sold at auction by a bankruptcy court next month. The bid is higher than that from regional carrier Republic Airways Holdings Inc. (RJET), which had offered to buy 100% of Frontier's stock upon Frontier's exit from bankruptcy protection for $108.75 million. Struggling Frontier, which has been operating under bankruptcy protection since last April, confirmed that Southwest had submitted an initial proposal to acquire it. The bid for Frontier comes at a time when U.S. airlines are downsizing to match falling passenger traffic. Southwest, which carriers more domestic passengers than any U.S. airline, has expanded low cost service to most major U.S. markets. But this year, for the first time in its history, Southwest doesn't expect to grow. However, the airline said acquiring other airline assets - such as it did with ATA airlines - wasn't out of the question. Southwest became a direct competitor to Frontier more than two years ago when it added service to Denver, where Frontier is based. Southwest Chairman and Chief Executive Gary Kelly said Southwest sees a strong fit between the two companies' cultures and commitment to customer services. The move would allow Southwest to expand its network and boost its presence in Denver, where Frontier is based. Frontier said it currently expects to emerge from Chapter 11 this fall. Interested bidders for the company must submit iniital proposals by Monday. Southwest's shares were recently up 18 cents at $7.85. -By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com (Ann Keaton contributed to this story) (END) Dow Jones NewswiresJuly 30, 2009 13:35 ET (17:35 GMT)Copyright © 2009 MarketWatch, Inc. All rights reserved. Please see our Terms of Use.
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