Southwest submits proposal to acquire Frontier Airlines

[StaySeated]

This has to be approved by the UCC and the BK court. With RAH on the UCC, any bid will have to be considerably higher for the court to approve the deal.

To correct earlier post, this is an acquisition. The RLA details how acquisitions are handled. This is also nothing like ATA, as they had already filed Ch. 7.

The only good news so far is that RAH, or SWA, or any other bidder can no longer state that "we were your only salvation, without us you would have liquidated".

If this offer does qualify and SWA prevails in the auction, the law requires several steps towards SLI.

 

[Colonel Savage]

UAL might as well close DEN hub today....if this goes through they have no chance making it in DEN with their cost structure. It will be BWI all over again...

UAL was IAD hub, not BWI.

BWI was USAir, which deserted said hub when SWA showed up.


For Frontier:

Being bought by RAH = Death

Being bought by SWA = Life

 

[Quiet Flight]

I have a few friends at F9 and I'd love to see them at SWA. This could be a win-win all the way around.

My 3rd year pay at WN is about equal to 14 yr F/O pay at F9 according to APC. That could be a big gain for the F9 gang.

Anyone from the Morris deal now at SWA care to chime in on how that was all worked out?

 

[Donald]

According to the press release, sounds like an eventual merger. Both operate independently for a period of time, then an eventual merge. I would like to know what the feelings are at F9. Do most prefer Republic or SWA? Personally I'm very optimistic about this. I commute on F9 and have always been very impressed with the people. I also have a few buds that work at F9. As with all mergers, hopefully it will turn out amicalble on both sides. If we win the bid, welcome aboard guys. I look forward to working with you.

 

[RedDogC130]

lets not turn this into USAIR

 

[BlackPilot628]

I see ATA written all over the wall. SWA knows that they are doing. Good Luck to all parties!

 

[Empennage]

Not from the infomation being put forth. They are buying a functioning airline, not "some" assets. . . . . re-read the quote about how they " . . intend to operate it as a an airline".

The real question is will AirTran management come forth at the last minute and make a bid . . . or will we continue to be outplayed again?

Ty

True. Just like AA and TWA.

 

[FIREMAN]

"Over time, Frontier Employees would be hired into Southwest as needed to support our fleet growth and expanded operations."

Notice it says "Hired into Southwest" not merged. How did pref hiring work out for the ATA pilots.

 

[Nevets]

I hope that SWAPA helps to make sure a fair seniority list integration rather than just letting F9 pilots get preferential interviews and end up at the bottom of the seniority list.

By the way, there was no mention of Lynx Aviation pilots.

 

[Vegaspilot99]

While I want to know where Lynx fits into this, I'm just happy to see SWA try to bump RAH out of the picture. I'm guessing they sell Lynx...Skywest maybe. Who knows.

 

[gt1900]

Well I guess you won't be seeing an offer from AAI like was rumored! AAI won't be getting into a bidding war with SWA. HOWEVER, I wouldn't be suprised to see this start a few more mergers. SWA is just getting too big for other airlines to sit on the sidelines. I'm thinking this will get AAI and ALA talking a little more! SWA is just getting too strong on the east coast, and now the west coast for airlines like AAI and ALA to sit and watch SWA's market share grow. Who knows, maybe AAI and ALA will throw in a joint bid for F9. Together they could take on SWA. Imagine an airline with a route structure with hubs in ATL, DEN, SEA, LAX, and ANC. Pretty good route structure in my mind! Mabye the best laid out route structure of any airline.

 

[Megalops]

I will gladly take a staple at SWA instead of the Repub deal any day.

 

[Muskycat]

From SWALife me thinks.

Southwest Airlines Submits Nonbinding Proposal to Acquire Frontier Airlines

On Thursday, July 30, Southwest Airlines submitted a nonbinding proposal to acquire Frontier Airlines in accordance with the bidding procedures in the bankruptcy court. We view this as an exciting opportunity for the Employees and Customers of both Southwest and Frontier. It represents an opportunity for Southwest to grow our Denver Customers; grow our revenues; and grow our profits. We must caution, however, that this is merely a preliminary step in the bidding process.

We must submit a binding proposal by August 10. If there is more than one qualified investor, and at this time Republic Airways has also submitted a bid, an auction will be held beginning August 11. Frontier will determine, in consultation with the unsecured creditors committee, which bid to accept and present to the bankruptcy court for approval.

Although our plans may vary as we work our way through this process, we wanted to share with you our present plan as we envision it. Frontier would continue to operate independently and separately for a period of time with its Airbus aircraft and personnel. We do not intend to integrate the Airbus into our Boeing 737 fleet. As we are able to retire Airbus aircraft, we will add Boeing 737 aircraft. Over time, Frontier Employees would be hired into Southwest as needed to support our fleet growth and expanded operations. There are many details to be worked through, but we are confident that the effort will be worthwhile. We are also confident that our bid, if successful, will boost low-fare competition and benefit consumers in Denver and other cities our expanded network will serve.

Even if our bid is accepted and approved by the bankruptcy court, our closing on this transaction will be subject to several contingencies. These will include the negotiation of acceptable labor agreements dealing with the interim period of separate operation and seniority; and the appropriate regulatory review. Absent the negotiation of these labor agreements, we will not go forward with this transaction. However, we are confident that the benefits of such a transaction for Employees of both Southwest and Frontier will become self-evident and that we will be able to obtain such agreements.

We hope that you are as excited as we are about the possibilities inherent in this opportunity. Stay tuned!

Hired into position? Sounds worse than being stapled.

 

[StaySeated]

This is all very preliminary, but the law states very clearly that you can not acquire an airline, fire all of the employees, and the offer to re-hire them.

Had F9 failed to obtain exit financing, and subsequently liquidated, SWA or anyone else could sweep in and purchase individual assets just as they did at ATA.

If no one else had bid for F9, you can bet that SWA would have been waiting to pounce on the assets. Now that F9 has at least one offer, SWA is executing plan B. By acquiring F9, SWA is preventing RAH from coming in and expanding F9 market share with E190's. SWA wants denver, and this is the only way they can get it due to the fact that F9 is not going to completely disappear.

Still a long way before SWA or anyone else owns us.

 

[General Lee]

So, you buy Frontier and you instantly get Dash-8-400s (Lynx), and you will get INTL routes (Mexico, Costa Rica). Can you guys handle all of that? What if your management wants more of those Dash-8-400s, and wants to put them on thinner routes (all of the LBB routes?). What will you guys do? Also, I don't think you can just do an asset sale---and with that Bond Ammendment, I don't think you can staple. Also, Frontier has the largest airplane of the two airlines (they do have some A320s---not only A319s and A318s)---so are those specific planes considered "super premium?"


Bye Bye--General Lee