Southwest Airlines bid $170 million for Frontier Airlines on Monday, setting the stage for an auction to determine who will take the Denver-based carrier out of bankruptcy protection.
Southwest's bid is well above a previous bid of $108.8 million by regional airline operator Republic Airways Holdings Inc. If Republic stays in the competition, an auction will be held to determine a winner. Southwest said the auction will begin on Thursday.
A Republic spokesman did not return a phone message seeking comment. Frontier spokesman Steve Snyder said the carrier wouldn't have any comment until it finishes reviewing Southwest's bid.
Southwest said its bid could change, but its offer assumes it acquires about 80 percent of Frontier's Airbus fleet, or about 40 airplanes, as well as Frontier's regional carrier, Lynx. Southwest said it expects that Frontier would operate its current aircraft while shifting to Southwest's Boeing 737s over the next two years.
Southwest said it would keep all of Frontier's markets.
"Given Southwest's history and track record of running a successful airline, we believe that our bid is the best option on the table for Frontier, Southwest and the traveling public," Gary Kelly, Southwest chairman, president, and CEO said in a prepared statement.
A bankruptcy judge had already approved Republic's bid, but the bankruptcy process allows other bidders to step forward. Southwest Airlines Co. did so July 30, initially offering a nonbinding bid of $113.6 million. That gave it the chance to look at Frontier's books and decide whether it wanted to submit a binding bid.
Denver-based Frontier has been operating under Chapter 11 protection since April 2008. Southwest has said its plan is to operate Frontier as a standalone carrier for a couple of years until its operations can be combined with Southwest's.
