Southwest to Make Bid for Frontier Airlines

By | July 31, 2009
FORT LAUDERDALE, FL - APRIL 11:  The tail of a...
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We previously reported that Republic Airways had put down a bid to buy out Frontier Airlines. Today, another airline put down a bid, Southwest Airlines. Southwest announced it was preparing a bid to compete with the Republic bid, which had been given tentative approval.

If it is successful, Southwest plans to make a “substantial investment” in Frontier and operate it as a separate subsidiary, until the airline can be folded into Southwest. Frontier operates Airbus aircraft, and Southwest exclusively operates the Boeing 737. Frontier has 5,000 employees and 51 aircraft, compared to the 35,000 employees and more than 500 aircraft. Southwest has admitted it would slowly eliminate the Airbus aircraft, replacing it with 737s to unify its fleet.

Frontier offers a single class of service, like Southwest. But unlike Southwest, it offers in-flight television service, which costs six dollars on all domestic flights, and in-seat movies for eight dollars. The service is complimentary on all international flights south of the border and on all flights to Anchorage.

Speaking of the south of the border…Frontier flies out of the continental United States to Costa Rica and Mexico. Southwest has been looking at expanding internationally into Canada and Mexico through partnerships.

Finally, by taking over Denver-based Frontier, Southwest can further solidify itself at Denver, where it has already become a big player. In only three and a half years, the airline has grown to 113 flights a day. It is already challenging entrenched United Airlines, which operates a hub there. The combination with Frontier will likely further erode United’s lead, as it did as LAX, where United’s presence is significantly lower than it once was.

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