DealZone

The New Republic

August 14, 2009

Republic Airways won its bid to buy bankrupt Frontier Airlines for $108.75 million after a day-long auction in bankruptcy court after pilots from bigger bidder Southwest and those of Frontier couldn’t reach agreement over seniority.

Southwest waded into the mix in late July. Its last binding offer was worth $170 million. Republic, Frontier’s biggest unsecured creditor, improved its bid by agreeing to waive recovery rights on its $150 million general unsecured claim, a move expected to boost the distribution to Frontier’s unsecured creditors by 94 percent.

Frontier said the deal preserves more jobs than the bigger offer from no-frills airline Southwest would have. But Republic’s pilots, who are Teamsters, apparently have not yet discussed seniority terms with Frontier, so it’s possible that the seniority issue will linger.

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