From Market Watch
Earlier this week, Republic Airways Inc. /quotes/comstock/15*!rjet/quotes/nls/rjet (
RJET 6.58, +0.58, +9.67%) said it would acquire Frontier Airlines Holdings Inc. and Midwest Airlines in separate transactions for about $140 million.
In a Wednesday research note, investment firm Raymond James said the deals provide some protection if one of its legacy-carrier customers declare bankruptcy and with new revenue generation.
Furthermore, it will put Republic Airways in direct competition with low-cost providers Southwest Airlines /quotes/comstock/13*!luv/quotes/nls/luv (
LUV 6.31, +0.06, +0.96%) and AirTran /quotes/comstock/13*!aai/quotes/nls/aai (
AAI 5.41, +0.12, +2.27%) , as well as existing customers that utilizes its regional jets, such as United, the firm said.
"In summary, we like the team on the field, but given the difficult operating environment and liquidity standpoint, this play call equates to a Hail Mary pass in the midst of a blizzard," Raymond James said in a statement.