Thu, Feb 09, 2012
Holding Company Looks To Burnish The Regional Carrier's Image
... Prior To Sale
Republic Airways Holdings is working to put a new gloss on its
financially-struggling regional carrier Frontier Airlines, which it
acquired in bankruptcy court just three years ago. Chairman and CEO
Bryan Bedford said that it is close to naming a financial advisor
which will assist in the sale of the airline.
The Wall Street Journal reports that the job of the
financial advisor will be to bolster the bottom line to the
greatest extent possible. New management at the Denver-based
carrier has already found $120 million in annual expense
reductions. Bedford said the airline will likely be spun off to
Republic's shareholders, or sold to a private equity firm.
The holding company bought the airline for $1.1 billion in a
diversification move, but high fuel prices and competition from
airlines like Southwest pushed it to number 3 in Denver. It
reportedly has lost some $16.5 million for RAH over the past three
years.
Frontier is "aggressively" analyzing routes, according to the
paper, to see which are the most profitable. It has sought new
revenue streams, such as charter flights for a private vacation
firm.
Republic is in the process of parking some of its smaller,
50-seat regional jets across its holdings, and it remains
profitable. It is eyeing AMR Corp's restructuring, as the parent of
American Airlines could be looking to entering more codeshare
agreements with regional carriers, saving the mainline carriers
money.
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