From USA Today:
Republic Airways says it has entered into a nonbinding preliminary agreement with a third party that it hopes will buy its Frontier Airlines subsidiary.
Reuters writes Republic CEO "Bryan Bedford said the terms require certain conditions to be met to reach a binding agreement and complete the potential sale. Republic did not identify the buyer but referred to it as a third party."
"If a binding sales agreement is reached ... we currently would expect such a closing to occur late in the third quarter," Bedford said during Republic's earnings conference call, according to Reuters.
ARCHIVES: Republic wins bid for Frontier, beats Southwest (August 2009)
ARCHIVES: Midwest Airlines name dropped in favor of Frontier (April 2010)
ARCHIVES: Frontier Airlines' retreat from Midwest hubs nearly complete (May 2012)
Indianapolis-based Republic had been operating primarily as a regional feeder partner for major airlines when it acquired Frontier out of bankruptcy protection in 2009. Republic eventually merged Frontier with another of its acquisitions – Midwest Airlines.
Republic continued to operate feeder service for partners such as Delta and US Airways, but also began to compete with those same companies via its Frontier unit.
However, the experiment did not meet expectations at Republic, which soon dropped the Milwaukee and Kansas City hubs it had inherited with its Midwest acquisition and began shopping Frontier for a buyer in 2011.
ARCHIVES: Frontier Airlines: No more free chocolate chip cookies (April 2012)
ARCHIVES: Route shakeup will leave Frontier a different animal (March 2012)
ARCHIVES: Frontier tries Orlando as it looks for growth opportunities (March 2012)
ARCHIVES: Frontier Airlines wants to look more like Spirit (Feb. 2012)
Since then, Frontier has aggressively attempted to remake itself as an "ultra-low-cost carrier." The carrier has added a slew of new fees and aggressive pricing strategies, The Denver Postreports. It also has been quick to add and drop destinations as it seeks a route map that works.
The carrier recently has added new focus cities at small airports near Trenton, N.J., and Wilmington, Del. However, those airports followed a failed attempt to do the same at Colorado Springs.
The route shuffling comes as Frontier finds itself squeezed at its main hub at Denver, where it counts both the USA's biggest carrier – United – and the USA's biggest low-cost carrier – Southwest – as its top rivals.
ARCHIVES: Frontier Airlines to penalize fliers who book elsewhere (Sept. 2012)
ARCHIVES: Can Frontier become an ultra-low-cost airline worth buying? (March 2012)
ARCHIVES : Frontier struggles to find a route map that works (Feb. 2013)
ARCHIVES: Frontier Airlines puts Delaware back on USA's flight map (July 2013)
Back to news of a potential buyer, the Denver Business Journal says Beford said he was not focused on closing the deal when asked if he had a back-up plan in case the sale fell through.
"Plan A is to sell the business, because that's essentially what the shareholders have told us they want," Bedford is quoted as saying by the Business Jounal. "Frontier is not consuming capital for Republic. Republic has decided it's not going to make those next investments in Frontier to take it to the next level of ultra-low-cost carrier. That will be for the next owner to do."
Stay tuned ...