Republic Airways Holdings Inc. won a bankruptcy court auction to buy Frontier Airlines Holdings Inc., bidding $108.8 million to beat Southwest Airlines Co.
Republic also agreed to waive distributions on its $150 million pre-petition unsecured claim, Frontier said today in a separate statement. U.S. Bankruptcy Judge Robert Drain in New York and regulators have yet to review the sale. Southwest bid $170 million Aug. 10, before the auction officially began.
“I look forward to welcoming Frontier to our Republic family,” Bryan Bedford, Republic’s chief executive officer, said today in that airline’s statement.
Indianapolis-based Republic was the 11th-largest U.S. carrier last year based on passenger traffic, while Denver-based Frontier was 13th and Dallas-based Southwest was fifth, according to data compiled by Bloomberg.
Republic operates commuter flights for larger carriers including Delta Air Lines Inc. and UAL Corp.’s United Airlines and has said it would operate Frontier as a subsidiary. Republic owns regional carriers Chautauqua Airlines, Shuttle America and Midwest Airlines, which it acquired on July 31.
Southwest, the world’s biggest discount carrier, made a $113.6 million preliminary offer on July 30. It then increased its offer by about 50 percent Aug. 10 to hold off Republic in a bidding war.
Frontier filed for bankruptcy in April 2008 and agreed on June 22 to be acquired by Republic for $108.8 million, before Southwest’s higher offer.
The case is In Frontier Airline Holdings Inc., 08-11298, U.S. Bankruptcy Court, Southern District of New York (Manhattan).