Dallas-based Southwest Airlines develops bid proposal to buy bankrupt Frontier Airlines

by PegNews wire

DALLAS — Southwest Airlines (NYSE:LUV) confirmed today that the carrier is preparing a bid to acquire Denver-based Frontier Airlines, which will be sold at auction in bankruptcy court next month. The carrier has submitted a nonbinding proposal in accordance with the bidding procedures established in the U.S. Bankruptcy Court for the Southern District of New York. The bid is worth a minimum of $113.6 million, which is in excess of the bid currently filed by Republic Airways.

Submission of a nonbinding proposal gives Southwest an opportunity to engage with Frontier in the due diligence required to determine the scope of a binding proposal to be submitted by the court's Aug. 10, 2009, deadline.

"We are excited about the opportunity to submit a bid," said Gary Kelly, Southwest's chairman of the board, president, and CEO. "We see a strong fit between our company cultures, a mutual commitment to high quality customer service, and similar entrepreneurial roots."

A successful acquisition of Frontier Airlines will allow Southwest to expand its network with its legendary low fares, add jobs into Southwest, and boost competition in Denver and other cities. Southwest is a qualified investor and is still preparing its proposal; therefore, it is premature to comment on the specifics at this point.

To view a Q&A with a Southwest Airlines' Executive Vice President Corporate Services and Corporate Secretary Ron Ricks, please visit: http://www.blogsouthwest.com/blog/southwest-bids-frontier-airlines.

Frontier filed for bankruptcy court protection in April 2008. On June 22, 2009, Republic Airways submitted a bid to purchase Frontier for $108.8 million.

Southwest Airlines currently serves 66 cities in 33 states, and announced service to Boston Logan, which begins Aug. 16, 2009, and to Milwaukee, which begins Nov. 1, 2009. Southwest currently operates more than 3,300 flights a day and has more than 35,000 Employees systemwide.

Source: Southwest Airlines

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