Frontier Airlines emerged from bankruptcy protection on Thursday, under new ownership but still facing a tough competitive situation at its Denver base.
Frontier is now a subsidiary of Republic Airways Holdings Inc., which beat out a bid from Southwest Airlines Co.
Republic has said it will keep the Frontier name for its new subsidiary and there’s no change to its frequent-flier program, so passengers are unlikely to see any difference in the airline now that it’s out of Chapter 11 protection. Republic is looking for ways to make the operation more efficient, though, possibly including moving Frontier’s maintenance operation out of Denver.
“This is the end of a long, difficult journey and the beginning of a new, exciting one,” said Sean Menke, Frontier’s president and CEO, in a prepared statement. He’s staying as Frontier CEO as well as becoming a Republic executive vice president and its chief marketing officer.
Republic now owns all of Frontier Airways Holdings Inc. through its $108.8 million bid in bankruptcy court. The plan called for Frontier’s old shares to be canceled.
Nearly all of Frontier’s flights come or go from Denver. That’s a competitive market, where Frontier is up against much larger United Airlines as well as discounter Southwest Airlines Co. United plus its regional partners flew 44.3 percent of Denver’s domestic passengers in July, versus 24.8 percent for Frontier and 15.2 percent for Southwest, according to the airport.
But analysts have praised Frontier for holding its own in Denver. After filing for bankruptcy protection in April 2008, it pruned its network and eliminated most flights that didn’t have a Denver stop.
Frontier’s last pretax operating loss was in February. Not counting taxes and bankruptcy items it has posted a $23 million profit since filing for Chapter 11 protection.
Republic also took ownership of Frontier’s regional unit, Lynx Aviation.
Republic shares fell 33 cents, or 3.5 percent, to $9 in midday trading.
