by Christopher Freeburn | August 1, 2013 12:19 pm
Frontier 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.
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.
Source URL: http://investorplace.com/2013/08/another-airline-may-enter-the-ultra-low-cost-game/
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