Another Airline May Enter the Ultra Low-Cost Game

Republic Airways may be close to selling Frontier Airlines

   

Another Airline May Enter the Ultra Low-Cost Game

FrontierAirlines Another Airline May Enter the Ultra Low Cost GameFrontier Airlines, which may soon be acquired by a private equity firm controlled by Spirit Airlines (SAVE) former chairman, could become the nation’s newest super-discount carrier.

If Indigo Partners succeeds in purchasing the airline from Republic Airways (RJET), William Franke is likely to transform the Denver-based carrier into a new version of Spirit, which contends with Allegiant Travel (ALGT) to provide the lowest-priced air service in the nation. Republic, which acquired Frontier in 2009, has been trying to sell the carrier for more than a year, BusinessWeek notes.

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Republic recently said that it has entered into a non-binding agreement with an unnamed party to sell Frontier. It has postponed its annual shareholder meeting until September, suggesting that a sale could be finalized by August.

Earlier this week, Franke stepped down as Spirit’s chairman and Indigo announced that it would sell the 16% of Spirit shares held by the firm.

Shares of Spirit climbed modestly in Thursday morning trading while Republic shares slipped.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/another-airline-may-enter-the-ultra-low-cost-game/.

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