USA TODAY: Southwest Beating Republic to Frontier

[Speedtape]

This might have been what BB wanted all along. SW buys F9, pays back the $150 million that is owed to RAH. USAIR is trying to get rid of 25 190's. How many 190's will BB be able to get for $150 million plus the $100 million he was going to use to buy F9. Things might actually work if BB can run the entire Midwest operation with no airplane payments. From what I have heard and read, the ACA operation would have worked if they didn't have huge lease payments and gas wasn't so expensive. Two things BB would have going for hime.

A fleet of paid for 190's and cheap labor flying the planes and the Midwest operation will most likely work. I understand there is a bit of competition in MKE and Kansis City, however with cost that low BB can do a lot of damage in a small niche market in the Midwest. The only real competition in those business markets would then be Airtran and RAH could easily compete with no plane payments and cheap azz labor. Just my $.02 of course.

Hmmm--Is there something in the paperwork that would require SWA to pay back RAH? Otherwise, RAH will just be financing the sale as an unwilling financier. In addtion, the Bankruptcy Judge could weigh in and alter either the debt or extend the payback schedule.

OPM--Other People's Money--is a preference for Entrepreneurs.

 

[nerjdriver]

Dont forget Frontier Airlines has a codeshare agreement with Midwest Airlines now. i wonder how this will effect the agreement with midwest/republic?

Who cares. That can be voided and the whip of a pen in an acquisition.

The good news is republic is out money and now they have to compete with not only WN in MKE but now DEN. ahhhhhhhh music to my ears!

 

[MACH-TUCK]

Bump!!!!! Whats the latest?

 

[Captain Morgan]

Who cares. That can be voided and the whip of a pen in an acquisition.

The good news is republic is out money and now they have to compete with not only WN in MKE but now DEN. ahhhhhhhh music to my ears!

uke: I just don't know how you ever became a professional pilot. There is nothing professional that ever comes out of you, just hate and jealousy. Good luck with you career, you better get thick thick skin.

 

[inflightboi175]

Frontier Airlines employees and supporters say they plan to hold a rally at the Denver City & County Building Thursday to support preservation of the airline.

Denver-based Frontier could disappear as a separate entity if competitor Southwest Airlines buys it.

Southwest said July 30 it intends to submit a $113.6 million bid to buy Frontier Airlines, which is trying to emerge from Chapter 11 bankruptcy protection.

The deal would combine the No. 2 and 3 carriers at Denver International Airport. Southwest officials said their intention is to eventually absorb Frontier into their airline.

Under a separate deal proposed by Republic Airways, Frontier would retain its identity as a separate airline, Republic officials have said.

More bidders for Frontier could emerge by the Aug. 10 deadline set by the U.S. Bankruptcy Court. An auction deciding the airline's fate will follow.

The “Save the Animals” rally — so-called because of the animals on the tails of Frontier jets — is slated for noon Thursday, according to a posting at savefrontier.org, a website established by airline supporters.

“We will not stand by and do nothing and watch our company disappear without a fight,” the post says. “Frontier provides a huge service to the people of and the visitors to Colorado. If we go, it’s their problem, too.”

 

[Speedtape]

Frontier Airlines employees and supporters say they plan to hold a rally at the Denver City & County Building Thursday to support preservation of the airline.

Denver-based Frontier could disappear as a separate entity if competitor Southwest Airlines buys it.

Southwest said July 30 it intends to submit a $113.6 million bid to buy Frontier Airlines, which is trying to emerge from Chapter 11 bankruptcy protection.

The deal would combine the No. 2 and 3 carriers at Denver International Airport. Southwest officials said their intention is to eventually absorb Frontier into their airline.

Under a separate deal proposed by Republic Airways, Frontier would retain its identity as a separate airline, Republic officials have said.

More bidders for Frontier could emerge by the Aug. 10 deadline set by the U.S. Bankruptcy Court. An auction deciding the airline's fate will follow.

The “Save the Animals” rally — so-called because of the animals on the tails of Frontier jets — is slated for noon Thursday, according to a posting at savefrontier.org, a website established by airline supporters.

“We will not stand by and do nothing and watch our company disappear without a fight,” the post says. “Frontier provides a huge service to the people of and the visitors to Colorado. If we go, it’s their problem, too.”

I know of NO community that has ever complained that Southwest served their community. If fact, there are many communities that are begging Southwest for service. As far as animals on the tail, Frontier does not have a monopoly on that. In fact, Southwest had a beautiful animal painted on the fuselage, Bar Refaeli. Better than any animal I've seen on an Airbus.

 

[SpauldingSmails]

Part of me wonders if Republic's bid for Frontier was just a bluff, a shill bid.

Set a floor for the price, anticipating that SWA would want to acquire Frontier if they go up for auction, BB gets his loans repaid plus interest and RP walks away with the cash and no further obligation.

 

[Speedtape]

Part of me wonders if Republic's bid for Frontier was just a bluff, a shill bid.

Set a floor for the price, anticipating that SWA would want to acquire Frontier if they go up for auction, BB gets his loans repaid plus interest and RP walks away with the cash and no further obligation.

What did he bid, $10M? That would have been a steal! I guess we will see how serious he is. Just to keep it interesting, I hope he antys-up because within some margin, Southwest will surely counter. What were the terms of the loan?

 

[inflightboi175]

She puts her money with analyst Gary Chase of Barclays Capital. Hegeman quotes one of Chase's research notes on the subjects. It says*****"our analysis suggests that Southwest is losing a significant amount of money in Denver while Frontier has been profitable year to date. Frontier has made substantial cost progress during its bankruptcy proceedings and currently enjoys a significant revenue advantage to Southwest in Denver markets.”*****

But Chase isn’t the only Wall Street analyst taking that view this week. TheStreet.com quotes Avondale Partners analyst Bob McAdoo as saying Southwest has "overscheduled Denver, resulting in weak margins and high breakeven load factors." He estimates Southwest lost $38 million in the Mile High City in the first quarter of this year, adding that his data suggests*****about $7.2 million of that came on just the carrier’s nonstop routes to San Francisco and Denver. “If you look at the 15 worst markets in the entire Southwest system, six of them are in Denver," McAdoo says.
*****
Joining the argument is Bill Swelbar, a research engineer at the MIT International Center for Air Transportation. In Swelblog aviation blog, Swelbar*****makes what*****is perhaps one of the most-comprehensive cases supporting the idea that Southwest may be on the defensive in Denver.

He offers a detailed interpretation on how he thinks Southwest’s cost-structure stacks up in relation to its rivals, and about the role he sees that playing in Southwest’s bid for Frontier. (Swelblog: Pondering Southwest’s Potential Play on Frontier) One of Swelbar's key points is that "if Republic is successful in gaining control of Frontier, it would produce, overnight, a new and potentially threatening competitor to Southwest's domestic dominance. … Frontier would provide Republic a tremendous opportunity to transform not only itself but the U.S. domestic market. For Southwest, the Frontier play is not so much transformative as it is defensive" for three primary reasons, according to Swelbar.

One of those reasons, Swelbar writes, is that he thinks Southwest's move is – in part –***** to "(thwart) future competition by ensuring that Republic (currently a regional carrier flying for bigger partners) remains a capacity provider to the nations’ legacy carriers – at least in the near term."

http://www.usatoday.com/travel/flights/blog.aspx

 

[firstthird]

that's how you do it. Now, I think it is an over reaction to the mainly positive stories last week and that the truth is somewhere in between. SWA is doing okay but DEN is not one of our better markets, much like PHL, it was predicated on someone going away or getting smaller, which hasn't really happened.