Frontier’s Franke Sees Consolidation in Futur
08-25-2015, 08:30 AM
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Frontier’s Franke Sees Consolidation in Futur
Frontier’s Franke Sees Consolidation in the Future of Low-Cost Carriers
The carrier and Spirit Airlines were almost on the same team
By
Jack Nicas
Aug. 24, 2015 7:46 p.m. ET
Frontier Airlines Inc. and Spirit Airlines Inc. are fighting to be the top ultradiscount airline in the U.S. But they were almost on the same team.
When Frontier was for sale in early 2013, then Spirit Chairman Bill Franke pitched fellow Spirit directors on buying the carrier, he said in an interview earlier this month. The board considered investing in Frontier, he said, but ultimately declined.
“That left me with a choice: not doing the Frontier transaction, or doing it and not being a participant in the Spirit process,” Mr. Franke, 78 years old, said in an interview from Bigfork, Mont., where he was hosting executives of aviation firms he invests in. “So we made the decision: I resigned as [Spirit] chairman, and over the next several months we sold our position” in Spirit.
Indigo Partners LLC, Mr. Franke’s private-equity firm, purchased Frontier from Republic Airways Holdings Inc. in December 2013 for $36 million in cash and roughly $1.3 billion in assumed debt and aircraft leases. Republic had been shopping Frontier for nearly two years and the carrier was near liquidation at the time, current and former Frontier executives said.
Mr. Franke and former Spirit executive Barry Biffle, 43, are now transforming Frontier into an ultralow-cost carrier, one of the fastest-growing and most profitable sectors of the industry, designed around cutting costs and fares by selling a more basic flying experience.
Indigo has invested in such airlines before, including Spirit and carriers in Singapore, Hungary and Mexico.
Many industry observers have speculated that Frontier and Spirit would make good merger partners because of their similar business models, complementary networks and friendly management teams. Mr. Franke stoked speculation in January when he said at an aviation conference that there is room for consolidation among U.S. low-cost carriers.
He reiterated that point earlier this month. “I do believe there will be additional consolidation” among a group of airlines that includes Frontier, Spirit, JetBlue Airways Corp. , Alaska Air Group Inc. and Virgin America Inc., he said.
Spirit said in a statement: “We are focused on native growth and we have no plans for merging with any other airline.”
Mr. Franke agreed that a Spirit-Frontier merger isn’t imminent. “Right now they both have a fairly aggressive independent position,” he said. “While we obviously know Spirit management well…there hasn’t really been any formal discussion about the combination of the two airlines.”
Mr. Biffle, Frontier’s president, was blunter: “We have spent zero effort” on consolidation.
The carrier and Spirit Airlines were almost on the same team
By
Jack Nicas
Aug. 24, 2015 7:46 p.m. ET
Frontier Airlines Inc. and Spirit Airlines Inc. are fighting to be the top ultradiscount airline in the U.S. But they were almost on the same team.
When Frontier was for sale in early 2013, then Spirit Chairman Bill Franke pitched fellow Spirit directors on buying the carrier, he said in an interview earlier this month. The board considered investing in Frontier, he said, but ultimately declined.
“That left me with a choice: not doing the Frontier transaction, or doing it and not being a participant in the Spirit process,” Mr. Franke, 78 years old, said in an interview from Bigfork, Mont., where he was hosting executives of aviation firms he invests in. “So we made the decision: I resigned as [Spirit] chairman, and over the next several months we sold our position” in Spirit.
Indigo Partners LLC, Mr. Franke’s private-equity firm, purchased Frontier from Republic Airways Holdings Inc. in December 2013 for $36 million in cash and roughly $1.3 billion in assumed debt and aircraft leases. Republic had been shopping Frontier for nearly two years and the carrier was near liquidation at the time, current and former Frontier executives said.
Mr. Franke and former Spirit executive Barry Biffle, 43, are now transforming Frontier into an ultralow-cost carrier, one of the fastest-growing and most profitable sectors of the industry, designed around cutting costs and fares by selling a more basic flying experience.
Indigo has invested in such airlines before, including Spirit and carriers in Singapore, Hungary and Mexico.
Many industry observers have speculated that Frontier and Spirit would make good merger partners because of their similar business models, complementary networks and friendly management teams. Mr. Franke stoked speculation in January when he said at an aviation conference that there is room for consolidation among U.S. low-cost carriers.
He reiterated that point earlier this month. “I do believe there will be additional consolidation” among a group of airlines that includes Frontier, Spirit, JetBlue Airways Corp. , Alaska Air Group Inc. and Virgin America Inc., he said.
Spirit said in a statement: “We are focused on native growth and we have no plans for merging with any other airline.”
Mr. Franke agreed that a Spirit-Frontier merger isn’t imminent. “Right now they both have a fairly aggressive independent position,” he said. “While we obviously know Spirit management well…there hasn’t really been any formal discussion about the combination of the two airlines.”
Mr. Biffle, Frontier’s president, was blunter: “We have spent zero effort” on consolidation.
08-25-2015, 08:31 AM
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Link is a WSJ article which needs a subscription. But to see the article, the work-around that is go to google, then copy/paste the article into the search and hit enter.
"Frontier’s Franke Sees Consolidation in the Future of Low-Cost Carriers"
The WSJ article is the first link that comes up and you can see the whole article this way.
"Frontier’s Franke Sees Consolidation in the Future of Low-Cost Carriers"
The WSJ article is the first link that comes up and you can see the whole article this way.
08-25-2015, 10:06 AM
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Posts: 6,929
Originally Posted by ShyGuy
Frontier’s Franke Sees Consolidation in the Future of Low-Cost Carriers
The carrier and Spirit Airlines were almost on the same team
By
Jack Nicas
Aug. 24, 2015 7:46 p.m. ET
Frontier Airlines Inc. and Spirit Airlines Inc. are fighting to be the top ultradiscount airline in the U.S. But they were almost on the same team.
When Frontier was for sale in early 2013, then Spirit Chairman Bill Franke pitched fellow Spirit directors on buying the carrier, he said in an interview earlier this month. The board considered investing in Frontier, he said, but ultimately declined.
“That left me with a choice: not doing the Frontier transaction, or doing it and not being a participant in the Spirit process,” Mr. Franke, 78 years old, said in an interview from Bigfork, Mont., where he was hosting executives of aviation firms he invests in. “So we made the decision: I resigned as [Spirit] chairman, and over the next several months we sold our position” in Spirit.
Indigo Partners LLC, Mr. Franke’s private-equity firm, purchased Frontier from Republic Airways Holdings Inc. in December 2013 for $36 million in cash and roughly $1.3 billion in assumed debt and aircraft leases. Republic had been shopping Frontier for nearly two years and the carrier was near liquidation at the time, current and former Frontier executives said.
Mr. Franke and former Spirit executive Barry Biffle, 43, are now transforming Frontier into an ultralow-cost carrier, one of the fastest-growing and most profitable sectors of the industry, designed around cutting costs and fares by selling a more basic flying experience.
Indigo has invested in such airlines before, including Spirit and carriers in Singapore, Hungary and Mexico.
Many industry observers have speculated that Frontier and Spirit would make good merger partners because of their similar business models, complementary networks and [b]friendly management teams[/b]. Mr. Franke stoked speculation in January when he said at an aviation conference that there is room for consolidation among U.S. low-cost carriers.
He reiterated that point earlier this month. “I do believe there will be additional consolidation” among a group of airlines that includes Frontier, Spirit, JetBlue Airways Corp. , Alaska Air Group Inc. and Virgin America Inc., he said.
Spirit said in a statement: “We are focused on native growth and we have no plans for merging with any other airline.”
Mr. Franke agreed that a Spirit-Frontier merger isn’t imminent. “Right now they both have a fairly aggressive independent position,” he said. “While we obviously know Spirit management well…there hasn’t really been any formal discussion about the combination of the two airlines.”
Mr. Biffle, Frontier’s president, was blunter: “We have spent zero effort” on consolidation.
The carrier and Spirit Airlines were almost on the same team
By
Jack Nicas
Aug. 24, 2015 7:46 p.m. ET
Frontier Airlines Inc. and Spirit Airlines Inc. are fighting to be the top ultradiscount airline in the U.S. But they were almost on the same team.
When Frontier was for sale in early 2013, then Spirit Chairman Bill Franke pitched fellow Spirit directors on buying the carrier, he said in an interview earlier this month. The board considered investing in Frontier, he said, but ultimately declined.
“That left me with a choice: not doing the Frontier transaction, or doing it and not being a participant in the Spirit process,” Mr. Franke, 78 years old, said in an interview from Bigfork, Mont., where he was hosting executives of aviation firms he invests in. “So we made the decision: I resigned as [Spirit] chairman, and over the next several months we sold our position” in Spirit.
Indigo Partners LLC, Mr. Franke’s private-equity firm, purchased Frontier from Republic Airways Holdings Inc. in December 2013 for $36 million in cash and roughly $1.3 billion in assumed debt and aircraft leases. Republic had been shopping Frontier for nearly two years and the carrier was near liquidation at the time, current and former Frontier executives said.
Mr. Franke and former Spirit executive Barry Biffle, 43, are now transforming Frontier into an ultralow-cost carrier, one of the fastest-growing and most profitable sectors of the industry, designed around cutting costs and fares by selling a more basic flying experience.
Indigo has invested in such airlines before, including Spirit and carriers in Singapore, Hungary and Mexico.
Many industry observers have speculated that Frontier and Spirit would make good merger partners because of their similar business models, complementary networks and [b]friendly management teams[/b]. Mr. Franke stoked speculation in January when he said at an aviation conference that there is room for consolidation among U.S. low-cost carriers.
He reiterated that point earlier this month. “I do believe there will be additional consolidation” among a group of airlines that includes Frontier, Spirit, JetBlue Airways Corp. , Alaska Air Group Inc. and Virgin America Inc., he said.
Spirit said in a statement: “We are focused on native growth and we have no plans for merging with any other airline.”
Mr. Franke agreed that a Spirit-Frontier merger isn’t imminent. “Right now they both have a fairly aggressive independent position,” he said. “While we obviously know Spirit management well…there hasn’t really been any formal discussion about the combination of the two airlines.”
Mr. Biffle, Frontier’s president, was blunter: “We have spent zero effort” on consolidation.
08-25-2015, 10:11 AM
#4
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Joined APC: Mar 2010
Posts: 387
Originally Posted by JoeyMeatballs
bwhahahahahahahahahahahahahahahahahahahahahahahahh ahahahahahahahahahahhaha
FAPA leadership was interviewed for this article, but obviously labor didn't make the final copy... It is the WSJ after all.
08-25-2015, 10:53 AM
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Joined APC: Oct 2008
Posts: 551
Originally Posted by ShyGuy
If I was a bettin' man in Vegas, my money is on Spirit/Frontier merger and a jetBlue/Virgin merger.
08-25-2015, 11:33 AM
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Joined APC: Mar 2006
Position: 320 CA
Posts: 5,588
Originally Posted by iceman49
Why would DOJ allow when they are already concerned about what consolidation may have allowed de facto price fixing.
Precedent has been set allowing mega-carriers to form, so unless they can find some other grounds there is nothing stopping a Alaska/Blue/Virgin/Hawaiian merger or Frontier/Spirit/Allegiant
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