Another Airline May Enter the Ultra Low-Cost Game

by Christopher Freeburn | August 1, 2013 12:19 pm

Another Airline May Enter the Ultra Low-Cost Game

FrontierAirlines Another Airline May Enter the Ultra Low Cost Game[1]Frontier Airlines, which may soon be acquired by a private equity firm controlled by Spirit Airlines (SAVE[2]) former chairman, could become the nation’s newest super-discount carrier[3].

If Indigo Partners succeeds in purchasing the airline from Republic Airways (RJET[4]), William Franke is likely to transform the Denver-based carrier into a new version of Spirit, which contends with Allegiant Travel (ALGT[5]) 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[6] 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.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/02/FrontierAirlines.jpg
  2. SAVE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SAVE
  3. could become the nation’s newest super-discount carrier: http://www.businessweek.com/articles/2013-07-31/a-new-airline-for-americas-cheapest-travelers
  4. RJET: http://studio-5.financialcontent.com/investplace/quote?Symbol=RJET
  5. ALGT: http://studio-5.financialcontent.com/investplace/quote?Symbol=ALGT
  6. stepped down as Spirit’s chairman: http://investorplace.com/2013/07/spirit-airlines-chairman-to-sell-stake-resign/

Source URL: http://investorplace.com/2013/08/another-airline-may-enter-the-ultra-low-cost-game/
Short URL: http://invstplc.com/1nw6MJE