Republic to own 100% of Frontier, Midwest

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Republic to own 100% of Frontier, Midwest

Post by crj200dispatcher » 22 Jun 2009, 23:48

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Re: Republic to own 100% of Frontier

Post by Northwestdc9 » 23 Jun 2009, 02:01

Wow... First F9 and rumors are YX is next. Republic is quickly becoming a MAJOR powerhouse in the domestic airline industry.
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Re: Republic to own 100% of Frontier

Post by crj200dispatcher » 23 Jun 2009, 02:26

I know alot of people are unhappy, but alot of people jobs are being saved

Now we are just waiting until Wednesday when we are having a town hall meeting and see what this means, and the plans for F9
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Re: Republic to own 100% of Frontier

Post by NWADC9 » 23 Jun 2009, 03:46

So I'm assuming the only thing Republic will have in this is $$$ and not operations, right? So that a passenger won't know anything happened in terms of the Frontier experience?
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Re: Republic to own 100% of Frontier

Post by Aaron Robinson » 23 Jun 2009, 04:45

I would expect the E-170s to return at some point. I believe the original contract was through 2017.

A 100% ownership stake is pretty big to not change the operations...
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Re: Republic to own 100% of Frontier

Post by caps1237 » 23 Jun 2009, 05:30

I have to say, if Republic ended up acquiring Midwest as well, and focused on the DEN and MKE, while keeping the general underpinnings of the two airline's cultures...it could be a very nice airline :)
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Republic Airways buys Midwest

Post by crj200dispatcher » 23 Jun 2009, 21:25

Republic Airways to Acquire Midwest Airlines

INDIANAPOLIS--(BUSINESS WIRE)--Jun. 23, 2009-- Republic Airways Holdings (NASDAQ: RJET) today announced that it is acquiring Milwaukee-based Midwest Airlines from TPG Capital, a Fort Worth, Texas-based private equity firm. The transaction is subject to customary regulatory approvals and is expected to close in four to six weeks.

Republic will acquire 100% of the equity of Midwest and TPG’s $31 million secured note from Midwest. Consideration will be $6 million in cash and a $25 million, five-year note, which may be converted to RJET stock at $10 per share. In addition, TPG will have the right to nominate a member to the Republic Board of Directors.

“This acquisition will enhance the strategic positioning of Republic Airways,” said Bryan Bedford, chairman, president and CEO of Republic Airways. “Midwest has built a strong brand, a loyal base of customers and dedicated team of employees. We look forward to welcoming them to the Republic family and continuing the Midwest tradition of excellent customer care.”

Bedford added: “As Midwest celebrates its 25th anniversary, I want to make sure I recognize what the employees of Midwest – past and present – have built and sustained through both good and difficult times. This is a great brand built on superior customer service that will continue under new ownership.”

Under the agreement, Midwest will become a wholly owned subsidiary of Republic Airways, with the Midwest brand continuing. Midwest’s Boeing 717s will be replaced with Embraer 190 aircraft, enhancing Midwest’s ability to offer nonstop service to key destinations important to its frequent flyers.

Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on approximately 1,200 flights daily to 101 cities in 37 states, Canada and Mexico through airline services agreements with seven U.S. airlines. All of the airlines’ flights are operated under their airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, United Express, Midwest Connect, Mokulele Airlines and US Airways Express. The airlines currently employ approximately 4,500 aviation professionals and operate 212 regional jets.

In addition to historical information, this release contains forward-looking statements. Republic Airways may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Republic Airways’ beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date. Republic Airways assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risk factors disclosed in the Company’s most recent filing with the Securities and Exchange Commission.



Source: Republic Airways Holdings

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Re: Republic to own 100% of Frontier

Post by crj200dispatcher » 23 Jun 2009, 21:27

All I know at this time it will be a wholly owned subsidiary like CHQ/RAH and TCF, operations plans are unknown at this time

And we just did buy Midwest
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Re: Republic Airways buys Midwest

Post by Dennis » 23 Jun 2009, 21:39

May this mean a possible merger of operations between Republic, Midwest, and Frontier?
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Re: Republic to own 100% of Frontier

Post by Aaron Robinson » 23 Jun 2009, 21:55

Topics merged.
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Re: Republic to own 100% of Frontier, Midwest

Post by Aaron Robinson » 24 Jun 2009, 01:18

Something to consider: if Republic ends up significantly playing with these airlines and trying to control them in-house or merging them, they should beware of history. There are good reasons that regionals (ACA/Independence Air, ExpressJet) had trouble growing to sell independent operations--they don't have experience on the marketing, sales, revenue management, reservations, etc. side of the business. Regional airlines are good at controlling costs, but they do not have the native expertise to sell their own brand.
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Re: Republic to own 100% of Frontier, Midwest

Post by crj200dispatcher » 24 Jun 2009, 01:45

Before everyone jumps to conclusions

Has I have stated, we are having a Town Hall meeting tomorrow and I am sure this will be the hot topic.

All we know at this time is that Republic Airways Holdings will operate these 2 airlines under their own certificates and has a subsidiary of the company just like CHQ/TCF and RAH are
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Re: Republic to own 100% of Frontier, Midwest

Post by Northwestdc9 » 24 Jun 2009, 03:53

While I think Aaron has a point and Republic will need to be very careful, I see this as an extremely smart company, they've quietly built up a very large business. With a fleet size of about 285 (including all divisions) they have about the same number of aircraft as mainline Air France!
Now with a nationwide network, they look to me like they're positioning themselves for something...

Buying two airlines within 48 hours, that might even top Richard Branson!
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Re: Republic to own 100% of Frontier, Midwest

Post by Aaron Robinson » 24 Jun 2009, 04:20

Northwestdc9 wrote:Buying two airlines within 48 hours, that might even top Richard Branson!

Frank Lorenzo sadly tops them all...
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Re: Republic to own 100% of Frontier, Midwest

Post by crj200dispatcher » 24 Jun 2009, 06:33

XJET has over 200 aircraft all dedicated to one carrier, CO could screw them over in a heartbeat and find another carrier to fly these EMB for them. They almost did this with CHQ, until XJT decided to fly their own branded. CHQ was originally to fly 60 aircraft for CO, and these planes were the EMB's XJT did not want to pay the leases on

Skywest has well over 200 aircraft and flies for 3 airlines now. Realizing if UA went under right now, 40% of Skywest's flying is gone.

Just because it states Republic is buying Midwest and Frontier, people are assuming it is Republic Airlines. It is Republic Airways Holdings, who now just happens to own 4 airlines, each different form the other. And people are making it like Midwest and Frontier will be part of one of the 3 already owned.

Let me state...Midwest will remain Midwest, and continue to fly has they are. Now people are assuming, that since they are now getting rid of the 717's and going to EMB 190's, which are more fuel efficient and cost effective for the type of flying planned, that RAH is going to turn them into a regional, or merge them into F9.
All that is happening they are getting a new aircraft type, which happens everyday in the airline industry.
Majority of Midwest employees will retain their jobs, with the exception of jobs already carried out here in corporate, such has HR and payroll.

Let me repeat...Midwest will remain the way they always have been, with the exception of being under new ownership.

I am sitting here in our corporate office I get the news, but apparently 15 and 20 year olds from Airliners.Net have all the answers and know all that is happening

And you know what is really irritating, I break the news here on this site, for I was sitting at working Coordinating our AA/US flights, and the news came on our employee website, I cannot post a link due to it be restricted site, so I copy and paste the story, and I get an email saying per the rules, I have to post a link. Oh for Christ sakes, this is big news in the airline industry and a first in the history of US Commercial aviation,a nd thought I would share the info has fast has it became available. So I will wait until it is public from now on, and post a link and everyone is happy if I share it all has the news breaks over the next few weeks of what is happening at Republic.

And Aaron you wonder why you have not heard from me about the procedures manager position
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Re: Republic to own 100% of Frontier, Midwest

Post by Dennis » 24 Jun 2009, 11:15

Just because it states Republic is buying Midwest and Frontier, people are assuming it is Republic Airlines. It is Republic Airways Holdings, who now just happens to own 4 airlines, each different form the other. And people are making it like Midwest and Frontier will be part of one of the 3 already owned.


History has shown that when an airline is under new administration, it's either:
1. Merged into operations of that holding company
2. Disbanded
3. Kept as it is (I have not yet seen this case)

With the economy still trying to recover, and the airline industry still in the red, whose to say that Republic isn't trying to build an airline to challenge LCC and legacy carriers, instead of being a regional airline?
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Re: Republic to own 100% of Frontier, Midwest

Post by Aaron Robinson » 24 Jun 2009, 12:53

Dennis wrote:History has shown that when an airline is under new administration, it's either:
1. Merged into operations of that holding company
2. Disbanded
3. Kept as it is (I have not yet seen this case)

3. Very possible--these airlines are cheap to buy. It could be that they are simply sold off in better times, or sadly, broken apart for their assets. Remember that Republic also bought Mokulele earlier this year.

KLM-Northwest
SAS-Continental
Air Canada-Continental
Northwest-Continental
Mesa-US Airways
etc.

All of the above were bankruptcy or near-bankruptcy cases. But--the first option is always the one that makes people salivate the most.
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Re: Republic to own 100% of Frontier, Midwest

Post by Aaron Robinson » 24 Jun 2009, 15:46

Part of Aviation Daily's take (by Andrew Coupart, might not be public access): http://www.aviationweek.com/aw/generic/ ... ationdaily
Republic Airways officials could not be reached for comment beyond the airlines’ joint press release. But,
regarding Republic, the deal raises some interesting questions — and speculation. Republic has been aggressive in investing in and lending money to carriers for which it flies, and to Frontier, for which it does not (although it did fly for Frontier for part of 2007 and 2008).

But providing financial support to a carrier with mainline service (US Airways, Midwest, Frontier) is different than owning one. Republic Airways Holdings currently has only regional carriers as wholly owned subsidiaries: Republic, Chautauqua and Shuttle America. Republic recently acquired a 50% stake in and took control of Hawaiian carrier Mokulele. But that doesn’t compare to taking over a carrier the size and nature of Frontier, which would become another wholly owned subsidiary of the holding company.

The purchase would create a tangled web of sorts. For example, Republic Airways Holdings subsidiaries do some flying for United Express out of Denver. Also, Republic has been increasing its financial support of Milwaukee-based Midwest; AirTran, which is making a big move against Midwest in Milwaukee, has a partnership with Frontier. The Frontier purchase raised speculation on aviation forums that it could be part of a grander Republic strategy, perhaps involving Midwest, fleet movements or some network linkage.

Adding to the intrigue is the fact that subsidiary Republic Airlines sought and received U.S. Transportation Dept. approval in 2007 to operate as an independent carrier if it wants to, as did its Shuttle America subsidiary earlier this year (DAILY, March 26), so they could have “the flexibility to react to new business opportunities that may arise in the future.”

Of course, especially given previous failed attempts by regional carriers to start self-branded operations, it could just be that Republic sees a money-making opportunity in the Frontier acquisition. Frontier appears to have turned itself around in bankruptcy, having reported its sixth straight month of operating profit (DAILY, May 29). One option for Republic is to make a public offering at some point postemergence, possibly recouping its investment, and then some.

Now, if Republic's intent is to run all of these as standalone businesses long-term to ensure their main assets continue to be used, they would also be wise to look at Swissair's history.
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Re: Republic to own 100% of Frontier, Midwest

Post by RatherBFlyin » 24 Jun 2009, 21:41

It is not unheard of for an airline to be purchased by another entity and have the status quo remain virtually unchanged. A good example of this is with Swiss, when Lufthansa bought them. I would venture to say that most passengers carried by Swiss do not realize that the airline is owned by Lufthansa.

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Re: Republic to own 100% of Frontier, Midwest

Post by Aaron Robinson » 24 Jun 2009, 22:07

RatherBFlyin wrote:It is not unheard of for an airline to be purchased by another entity and have the status quo remain virtually unchanged. A good example of this is with Swiss, when Lufthansa bought them. I would venture to say that most passengers carried by Swiss do not realize that the airline is owned by Lufthansa.
This is a new paradigm and has not yet been seen in North America--prior to 2003, this was unheard of.
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