inflightboi175
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The head of Republic Airways Holdings Inc. (RJET) said Tuesday it is committed to turning around its loss-making Frontier unit after securing deals to give staff equity in return for cost-saving concessions.
Republic bought two rivals to diversify from flying on behalf of network airlines, only for the move to turn sour under the weight of soaring fuel costs and intense competition in Denver.
The company beat off competition from Southwest Airlines Co. (LUV) to buy Denver-based Frontier Airlines out of bankruptcy protection, but now plans to cut its stake to a minority by 2014.
"I believe we are going to fix it," said Republic Chairman and Chief Executive Bryan Bedford when asked on a post-earnings' call whether it might allow Frontier to collapse.
Frontier's flight attendant union on Tuesday backed a new contact that would swap concessions for equity in the restructured airline, mirroring a pact reached last month with pilots.
Bedford didn't detail what equity stake employees might receive, with the outcome depending on the search for a third-party investor.
Republic is switching out of smaller aircraft in favor of larger jets in a bid to cut costs, and Bedford said it had received "significant assistance" from plane maker Airbus and CFM--an engine maker part-owned by General Electric Co. (GE)--to help its restructuring.
Bedford said talks had been held with AMR Corp. (AMR) about potential opportunities arising from plans to spin off the American Eagle commuter airline unit, an existing Republic partner.
However, he said he was not "deep in the weeds" over any potential acquisition of the AMR business.
Republic reported a loss of $14.9 million for the three months to June 30 compared with a profit of $2.6 million a year earlier.
http://online.wsj.com/article/BT-CO-20110802-712627.html
Republic bought two rivals to diversify from flying on behalf of network airlines, only for the move to turn sour under the weight of soaring fuel costs and intense competition in Denver.
The company beat off competition from Southwest Airlines Co. (LUV) to buy Denver-based Frontier Airlines out of bankruptcy protection, but now plans to cut its stake to a minority by 2014.
"I believe we are going to fix it," said Republic Chairman and Chief Executive Bryan Bedford when asked on a post-earnings' call whether it might allow Frontier to collapse.
Frontier's flight attendant union on Tuesday backed a new contact that would swap concessions for equity in the restructured airline, mirroring a pact reached last month with pilots.
Bedford didn't detail what equity stake employees might receive, with the outcome depending on the search for a third-party investor.
Republic is switching out of smaller aircraft in favor of larger jets in a bid to cut costs, and Bedford said it had received "significant assistance" from plane maker Airbus and CFM--an engine maker part-owned by General Electric Co. (GE)--to help its restructuring.
Bedford said talks had been held with AMR Corp. (AMR) about potential opportunities arising from plans to spin off the American Eagle commuter airline unit, an existing Republic partner.
However, he said he was not "deep in the weeds" over any potential acquisition of the AMR business.
Republic reported a loss of $14.9 million for the three months to June 30 compared with a profit of $2.6 million a year earlier.
http://online.wsj.com/article/BT-CO-20110802-712627.html
