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Southwest Ends Bid for FrontierAugust 14, 2009 By: George Dooley
Southwest Airlines withdrew its $170 million bid to purchase bankrupt Frontier Airlines with Republic Airways winning the court supervised auction for Denver-based Frontier for $108.million. Indianapolis-based Republic is an airline holding company that owns Midwest Airlines, Republic Airlines, Chautauqua Airlines, Mokulele Airlines and Shuttle America.
"We said all along that we would only move forward on this deal if it proved to be the right decision for our employees and financially prudent for our company," said Gary Kelly, Southwest's chairman, president and CEO. "We have a mission to preserve and protect our culture and the best interests of our employees, customers, and shareholders. We chose not to amend our bid to remove the labor requirement, a key reason our bid was not selected. Our congratulations to Republic Airways and Frontier Airlines."
Southwest said it was not willing to remove the need for the two pilot unions to reach agreement and that, despite a good faith effort by all involved, including the top leadership of the Southwest Airlines Pilots Association (SWAPA) and the Frontier Airlines Pilots Association (FAPA), the two unions were not able to come to an agreement before the auction deadline. As a result, Southwest's bid was deemed unacceptable.
"Southwest remains committed to serving the Denver market with our low fares and excellent customer Service," Kelly said. "We began serving Denver in 2006 with just 13 flights and have grown to offer 112 nonstop daily flights today. We are very pleased with the response we have seen to our service and growth in Denver, and we will continue to compete vigorously in the market."
Frontier filed for bankruptcy court protection in April 2008. Southwest submitted its initial indication of interest to acquire Frontier Airlines on July 30, 2009, which gave the carrier an opportunity to engage with Frontier in the due diligence required to determine the scope of a binding proposal.