Frontier Airlines becomes Wholly Owned subsidary of Republic

Eagle757shark

Well-known member
Joined
Jul 31, 2006
Posts
575
Total Time
6000
Frontier Airlines Holdings, Inc. Reaches Investment Agreement With Republic Airways Holdings, Files Plan of Reorganization

  • Press Release
  • Source: Frontier Airlines Holdings, Inc.
  • On Monday June 22, 2009, 5:54 pm EDT
Republic Agrees to Serve as Equity Sponsor for Frontier's Emergence from Bankruptcy
Plan Provides for Frontier and Lynx to Maintain Normal Operations as Subsidiary of Republic
DENVER, June 22 /PRNewswire-FirstCall/ --Frontier Airlines Holdings, Inc. (Pink Sheets: FRNTQ - News) today announced it has entered into an investment agreement with Republic Airways Holdings, Inc. (Nasdaq: RJET - News) by which Republic will serve as equity sponsor for Frontier's plan of reorganization and purchase 100% of the equity in the reorganized company for $108.75 million. The plan sponsorship agreement is subject to bankruptcy court approval and various conditions.
If the plan of reorganization is approved and implemented as proposed, upon its emergence from Chapter 11, Frontier Airlines Holdings would become a wholly owned subsidiary of Republic, an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. Frontier Airlines and Lynx Aviation would maintain their current names and continue to operate as usual.
"This agreement represents a major milestone in our ongoing efforts to position Frontier to emerge from bankruptcy as a competitive, sustainable airline," said Sean Menke, Frontier President and Chief Executive Officer. "Through our reorganization process, we have transformed Frontier Airlines and Lynx Aviation into two of the most efficient operating carriers in North America. Additionally, we diversified our revenue generation through the introduction of ancillary charges and our branded 'AirFairs' product. The culmination of all this extraordinary work is that, even in the worst economic environment in the last 50 years, the company has posted an operating profit for each of the past six months and a net profit for the past two quarters."
Menke continued, "I would be absolutely remiss not to thank the thousands of Frontier and Lynx employees, and their families, for their sacrifice and dedication during these extraordinary times. They are truly the heart and soul of the company. We are pleased that this agreement allows our customers and communities to continue to receive the outstanding service for which Frontier is known, while preserving the jobs of most Frontier employees."
"We commend Frontier and its employees for their hard work and accomplishments during this difficult restructuring period," said Bryan Bedford, chairman, president and CEO of Republic Airways. "We believe this agreement represents a new beginning for Frontier, positioning it to build on its recent successes and strengthen the Frontier brand for the benefit of employees and the customers and communities it serves."
Frontier today filed its proposed plan of reorganization and a related disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York. Frontier also filed a motion to approve the investment agreement with Republic, subject to higher and better proposals under a court-supervised auction. Frontier will seek court approval of the investment agreement and proposed auction procedures at a hearing scheduled for July 13, 2009. Frontier currently expects to conclude the auction process and emerge from Chapter 11 by autumn 2009.
In March 2009, Frontier received a firm commitment for $40 million in post-petition debtor-in-possession (DIP) financing from Republic Airways Holdings to support Frontier's additional working capital needs and refinance its expiring DIP loan, increasing the available financing and preserving Frontier's financial stability. As a condition to the loan, Frontier agreed to allow Republic's damage claim in the amount of $150 million arising out of Frontier's rejection of its airline services agreement with Republic.
The proposed plan of reorganization provides for general unsecured creditors to receive $28.75 million in cash. An additional $40 million of the sale proceeds would be applied as repayment of the outstanding DIP loan. If the plan is implemented as proposed, the company's current equity would be extinguished and holders of that equity would not receive any recovery.
Frontier and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008. More information about Frontier's Chapter 11 proceedings is available at FrontierAirlines.com/restructure. Court filings and claims information are available at frontier-restructuring.com. Frontier's principal bankruptcy counsel is Davis Polk & Wardwell.
About Republic Airways Holdings
Republic Airways Holdings, based in Indianapolis, Indiana, is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on approximately 1,200 flights daily to 99 cities in 34 states, Canada, Mexico and Jamaica through airline services agreements with six U.S. airlines. All of the airlines' flights are operated under their airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, Midwest Connect, United Express and US Airways Express. The airlines currently employ approximately 4,400 aviation professionals and operate 235 regional jets.
About Frontier Airlines Holdings, Inc.
Frontier Airlines Holdings, Inc. is the parent company of Denver-based Frontier Airlines. Currently in its 15th year of operations, Frontier Airlines is the second-largest jet service carrier at Denver International Airport, employing approximately 5,000 aviation professionals. Frontier Airlines' mainline operation has 51 aircraft with one of the youngest Airbus fleets in North America. Frontier Airlines' mainline operations offer 24 channels of DIRECTV® service in every seatback along with a comfortable all-coach configuration. In conjunction with a fleet of ten Bombardier Q400 aircraft operated by Lynx Aviation (a subsidiary of Frontier Airlines Holdings, Inc.), Frontier offers routes to more than 50 destinations in the U.S., Mexico and Costa Rica. In November 2006, Frontier and AirTran announced a first-of-its-kind integrated marketing partnership that offers travelers the ability to reach more than 80 destinations across four countries with low fares aboard two of the youngest fleets in the industry. For more in-depth information on Frontier Airlines, please visit its Web site at FrontierAirlines.com.
 

flynryan15

Well-known member
Joined
Oct 27, 2003
Posts
637
Total Time
2000+
Nothing good can come of this!
 

samballs

Well-known member
Joined
Apr 26, 2005
Posts
1,511
Total Time
000000
So will those pilots have to become part of the RP list
 

labbats

Zulu who?
Joined
May 25, 2003
Posts
2,593
Total Time
9000
The Borg grows again.

Look what it did to Midwest. Midwest even had a scope clause!
 

i fly boxes

Well-known member
Joined
Jan 12, 2006
Posts
848
Total Time
4200
So now republic is basically competing against themselves in every aspect by having a subsidiary that competes against the carriers that their regional jets fly for? What the heck is going on? I am sure United is thrilled about this one.
 

Newf Dog

Well-known member
Joined
Jul 25, 2005
Posts
49
Total Time
6000+
Sadly for my friends at Frontier, if this deal goes through it's all over but the crying. Whatever agreement the F9 pilots reach with Republic will only preserve their jobs and pay for a few years. There could hardly be any worse news for the Frontier pilot group. Republic holds all the cards right now and the pilots have about zero leverage.

Even worse, this is a very bad omen for the industry as a whole. Good luck keeping those CBA rates and bennies after this.

Flame away folks but it's only a matter of time. Forget the nose, the whole dang camel is in the tent.

Good luck to you all. Better hope jetBlue or Southwest steps up and outbids Republic!!
 

Fubijaakr

Seniority is Forever
Joined
Dec 7, 2003
Posts
2,537
Total Time
Enough
Too bad for F9 guys. More good legacy paying jobs down the toilet.
 

pudnocker

Just Lookin
Joined
Jan 7, 2002
Posts
50
Total Time
+00010
The Borg is an understatement... It is more like a new Flu strain
 

samballs

Well-known member
Joined
Apr 26, 2005
Posts
1,511
Total Time
000000
I suppose a pilot from some airline is going to go postal on a RP pilot in the next year. Most likely a MW or a Frontier pilot.
 

samballs

Well-known member
Joined
Apr 26, 2005
Posts
1,511
Total Time
000000
All the frontier pilots that were on here saying vote this concession in, will be great in the future, are probably quiet now. They will be on a 145, or FO to a RP pilot. Have to say RP you are horrible. I would think RP is trying to get rid of the regional brand and become a mainline. A mainline that pays nothing.
 

Rekks Inbound

Well-known member
Joined
Sep 15, 2004
Posts
1,517
Total Time
Plenty
All the frontier pilots that were on here saying vote this concession in, will be great in the future, are probably quiet now. They will be on a 145, or FO to a RP pilot. Have to say RP you are horrible. I would think RP is trying to get rid of the regional brand and become a mainline. A mainline that pays nothing.
BINGO!:(

Peace.

Rekks
 
Last edited:

flynryan15

Well-known member
Joined
Oct 27, 2003
Posts
637
Total Time
2000+
I might be a conspiracy theory nut case, but what is to stop Republic from adding something like a A330? Then shifting all Ejets to their own airline, and almost overnight becoming a stand alone airline.
 

CitationLover

Aw, Nuts!
Joined
Feb 26, 2003
Posts
3,316
Total Time
1500+
I might be a conspiracy theory nut case, but what is to stop Republic from adding something like a A330? Then shifting all Ejets to their own airline, and almost overnight becoming a stand alone airline.
Where are they going to fly them to? Does Republic know anything about marketing an airline? What about selling tickets?
 

flynryan15

Well-known member
Joined
Oct 27, 2003
Posts
637
Total Time
2000+
Where are they going to fly them to? Does Republic know anything about marketing an airline? What about selling tickets?
I hope you are right, but as of right now they could be starting with 139 Ejets and 70 Airbus. The Republic MGT team has figured out how to take a small Saab operator to buying up major airlines in BK. So I don't think marketing and selling tickets would be to hard for them.
 

lookin4better

Well-known member
Joined
Apr 11, 2005
Posts
6,970
Total Time
Glory
You can bet that there are MANY RAH kiddies jumping for joy over this.
 

Noserider76

Teahupoo
Joined
Jul 9, 2004
Posts
789
Total Time
150+
This should give all the majors with RAH contracts the leverage to cancel them.
 

flynryan15

Well-known member
Joined
Oct 27, 2003
Posts
637
Total Time
2000+
This should give all the majors with RAH contracts the leverage to cancel them.
Well if the plan is to make a stand alone airline this is exactly what they want.
 
Top