Republic Airways scouting for investors

Victoria
By Victoria February 7, 2012 17:14

Republic Airways scouting for investors

Republic Airways Holdings is gearing up to make the pitch that its loss making Frontier Airlines unit is a good investment. Chairman and Chief Executive Bryan Bedford said the regional carrier is close to hiring financial advisers to help sell Frontier, which Republic purchased in bankruptcy court in October 2009 and decided to sell two years later. The Indianapolis-based carrier appointed new management to steer Frontier through the sale and recently achieved $120 million in annual cost savings to make the Denver-based unit more attractive to potential buyers. Frontier is talking to three financial advisers and could have a decision soon. The two most likely routes that Republic may take are selling Frontier, entirely or in part to a private-equity firm, or spinning it off to Republic shareholders.

Bedford stated to press that the chances another airline will acquire Frontier are “very, very low.” Frontier doesn’t fit well with many US airlines. “JetBlue Airways Corp., Spirit Airlines Inc. and Allegiant Air could each fit well with Frontier, but have shown little interest,” he added.

Frontier may not be able to take delivery of scheduled aircraft unless some sort of capital injection is made before long. It has 80 aircraft on order with deliveries due from 2016.

Victoria
By Victoria February 7, 2012 17:14
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