Frontier to become part of Republic Airways

NEW YORK – Republic Airways Holdings’ offer to buy Frontier Airlines out of bankruptcy was selected by Frontier’s creditors Thursday as the better of the two on the table.

To win the bidding war, Republic improved its initial $108.75 million offer, removing pre-closing conditions and receiving antitrust clearance. It also agreed to waive distributions on a $150 million claim, which is expected to result in a 94 percent increase in the distribution to Frontier’s general unsecured creditors.

Southwest Airlines’ refusal to remove a labor condition from its proposal was seen as key in the rejection of its $170 million bid.

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Southwest officials had previously said they wanted to fold Frontier into their system and dispose of Frontier’s Airbus fleet within two years, in the process eliminating a competitor in the Denver market.

Frontier spokesman Steve Snyder said after the decision was announced that Republic’s plan calls for operating Frontier and its subsidiary, Lynx Aviation, as wholly owned subsidiaries of Republic, with the airlines’ brands remaining intact.

Don Marostica, director of the Colorado Office of Economic Development and International Trade, said retaining Frontier in Denver has been a top priority for the state.

“We will be on the phone and talking to Republic and seeing what they expect out of us,” he added.