NEW YORK – A federal judge approved a deal on Monday under which bankrupt Frontier Airlines Holdings Inc will sell itself to Republic Airways Holdings Inc if no other better bids emerge, paving the way for the airline’s exit from bankruptcy within months.
Under terms of the deal, Republic Airways will pay $108.8 million for a 100 percent stake in Denver-based Frontier, which would become a wholly owned subsidiary of Republic, Frontier said in a statement.
Frontier said it expects to emerge from Chapter 11 bankruptcy protection later this year.
But the deal could be scuttled if potential rivals make higher offers, leading to a bankruptcy auction scheduled to be held by Frontier on August 11.
If a better bid emerges, Frontier has the right to terminate its deal with Republic, which owns Chautauqua Airlines, Republic Airlines and Shuttle America, according to terms approved by Judge Robert Drain of federal bankruptcy court in Manhattan.
Frontier Airlines and its Lynx Aviation unit would continue to operate normally, Frontier said.
Frontier, one of the leading U.S. regional carriers, filed for bankruptcy protection in April 2008 as the price of fuel surged and its credit card processor said it would withhold more proceeds from ticket sales.
Frontier, founded in 1994, competes with Southwest Airlines Co and JetBlue Airways Corp. Republic is based in Indianapolis and runs regional flights with large airline partners under such names as Delta Connection and US Airways Express.