Republic Airways Holdings has finally offloaded Frontier Airlines to a new owner, and right at the deadline. Earlier this week, Indigo Partners agreed to purchase Frontier and continue the push towards making them an ultra-low-cost carrier (ULCC). Indigo and its head, William Franke, know a thing or two about ULCCs; up until recently they were responsible for Spirit Airlines’ growth to become a leader in the segment.
Frontier’s acquisition by a new owner obviously raises questions about their future, particularly as it relates to their home base of Denver International Airport. Since 2006, when Southwest Airlines started ramping up its presence, Denver has been a three-carrier hub (with United Airlines being the third). Many have doubted the stability and longevity of such an arrangement; as a Denver-based flyer, I can attest to the fact that the three carriers have managed to keep airfares extremely low.
Frontier has a significant presence in Denver, with a majority of its nearly 4,000 employees based here. Long-considered Denver’s “hometown airline,” Frontier seemed to lose its way when first acquired by Republic, moving the headquarters to Indianapolis and merging the carrier with Midwest, eliminating the Midwest brand (although there are still a few planes painted in their livery) as well as the popular warm chocolate chip cookies. Since moving the HQ back to Denver in 2012, Frontier has been making a concerted effort to reestablish themselves as the hometown carrier of Denver (and Colorado) through local advertising, sponsorship, and involvement.
As part of the purchase agreement, Republic is giving Indigo their 80 Airbus A319neo and A320neo slots for $32 million in cash (to reimburse for deposits made with Airbus). Indigo will also inherit a fleet of over 50 A319 and A320 jets (Frontier recently retired their last A318). This fleet looks very similar to the fleet that Spirit has been operating, another benefit for Indigo. That being said, this acquisition will come down to whether or not labor approves, a hurdle that Indigo needs to figure out how to clear.
Ultimately, it will be interesting to see how Frontier moves forward. Business travelers (who often pay higher fares) have all but fled Frontier as it has devalued their product and focused more flying to leisure destinations (a la Allegiant Air). The big winner with business travelers from Denver will likely be United, whom I’ve moved nearly all my travel to. I really hope Frontier can successfully find a market niche that allows them to continue to serve Denver and coexist with Southwest and United.