Southwest Airlines developing bid proposal in Frontier Airlines bankruptcy court proceeding
Southwest Airlines confirmed that the carrier is preparing a bid to acquire Denver-based Frontier Airlines, which will be sold at auction in bankruptcy court next month.
The carrier has submitted a nonbinding proposal in accordance with the bidding procedures established in the U.S. Bankruptcy Court for the Southern District of New York. The bid is worth a minimum of $113.6 million, which is in excess of the bid currently filed by Republic Airways.
Submission of a nonbinding proposal gives Southwest an opportunity to engage with Frontier in the due diligence required to determine the scope of a binding proposal to be submitted by the court's Aug. 10, 2009, deadline.
"We are excited about the opportunity to submit a bid," said Gary Kelly, Southwest's Chairman of the Board, President, and CEO. "We see a strong fit between our Company cultures, a mutual commitment to high quality Customer Service, and similar entrepreneurial roots."
A successful acquisition of Frontier Airlines will allow Southwest to expand its network with its legendary low fares, add jobs into Southwest, and boost competition in Denver and other cities. Southwest is a qualified investor and is still preparing its proposal; therefore, it is premature to comment on the specifics at this point.
Frontier filed for bankruptcy court protection in April 2008. On June 22, 2009, Republic Airways submitted a bid to purchase Frontier for $108.8 million.
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