Indigo Partners agreed to acquire Frontier Airlines from Republic Airways Holdings Inc. Frontier would be bought for USD 36 million cash. However, the total deal would be worth USD 145 million because Indigo would also be taking on Frontier's debts.
Indiana-based Republic Airways decided to exit Frontier after purchasing it in October 2009. That acquisition allowed Frontier to avoid bankruptcy. According to a Bloomberg report, Frontier became profitable again under the helm of Republic Airways Chief Executive Officer Bryan Bedford. The turnaround came about after Bedford reduced the airline's yearly operating by over USD 120 million. Bedford cut jobs, dropped markets and altered leases, contracts and labor agreements.
Bedford said, "This transaction is a direct result of Frontier's successful restructuring, continued cost reduction efforts and laser focus on revenue generation." Veteran airline executive William Franke of Indigo Partners would be leading the acquisition. The deal would be expected to be finalized this December.
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