Frontier Airlines Holdings Inc. said today it has agreed to buy 10 turboprop planes from Bombardier Inc. for about $260 million as part of a plan to launch a low-cost service in the Rocky Mountains.
The new service will start next year, serving up to 18 destinations in Colorado and the Rockies and creating as many as 400 jobs, Frontier Chief Executive Officer Jeff Potter said.
Under terms of the agreement with Montreal-based Bombardier, Frontier will take delivery of the 74-seat Q400 aircraft between May and December of next year and has an option to purchase an additional 10 planes beginning in May 2008. Each aircraft will cost about $26 million, according to a Securities and Exchange Commission filing.
“This aircraft purchase will enable our service to grow by giving Frontier access to regional leisure and business travel destinations that were previously inaccessible to us but are ideally suited for the economics of the Q400,” Potter said in a statement.
The new service will carry the Frontier brand name and the airline’s trademark animals on each aircraft’s tail.
Frontier’s stock dipped 15 cents, or 2.1 percent, to $6.91 a share in early trading on the Nasdaq Stock Market.
Based in Denver, Frontier is a low-cost carrier that operates a hub at Denver International Airport serving 55 destinations in the United States, Mexico and Canada.
