Republic Wins the Right to Buy Frontier – Now What?

I certainly didn’t see this one coming. Thanks to a greatly increased bid and Southwest’s unwillingness to do a deal without labor’s buy-in (read BNET for more on this), Republic is the one walking away with Frontier. But Frontier Tails Happy to SurviveI don’t want to talk about the deal. Let’s talk about what this will mean for Frontier and Southwest.

First of all, it means the animals live. Frontier will keep flying under its own name for now. I suppose it’s possible at some point that Republic will decide to merge Midwest and Frontier under one name, but my guess is that won’t happen.

See, Republic is a pro at flying airplanes under all different kinds of brands. So it wouldn’t surprise me to see them merge the operational side of the house along with back office functions while still keeping separate brands. Why bother? Well, Midwest still has some fleeting value in Milwaukee while we know Frontier has value in Denver.

Republic’s chief Bryan Bedford has already signaled that airplanes will start moving around. At the very end of an article talking about job losses that will hit Midwest because of the merger (100 out of the 1,000 left in Milwaukee will go), there was this nugget.

Also, Republic on Thursday emerged as the winning bidder in a bankruptcy auction for Denver-based Frontier Airlines. Bedford said some of the 138-seat Airbus A319 jets used by Republic will likely be shifted into service for Midwest flights to West Coast destinations.

So, Chautauqua flies Embraer regional jets for Midwest, Republic flies larger Embraer jets for Midwest, Midwest still flies some 717s for itself but that’s ending, and now Frontier will be flying A319s for Midwest (which have 136, not 138 seats, by the way)? I guess so. There’s no reason to change certificates here – they can use Frontier as their Airbus operator and have it operate for anyone they feel like. So we’ll see if that’s the plan.

Meanwhile, what does this mean for Southwest? Well they have to be pretty bummed right now. They had a cheap and easy way to test out international flying and a regional operation. Plus they were going to make Denver a profitable place. Now none of that is likely to happen. I’m really interested to see what will happen with Denver. Now that Frontier doesn’t look to be going anywhere, it isn’t looking good for Southwest’s operation there. Even if United fails, I would bet that a legacy would step in to pick up the pieces. So Southwest has to make some hard decisions now. Will they want to keep flying a large unprofitable operation in Denver?

There are a lot of interesting questions to answer now that the bidding is done.

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