RAH trying to spin off F9
 

Not really a surprise but Bedford announced it today...

Republic Airways looking into split with Frontier

In a story just crossing the newswires, The Associated Press writes:

Frontier Airlines could soon be up for sale.

Its current owner, Republic Airways, says it's hiring advisers to look at selling Frontier, or spinning it off to current Republic shareholders. In any case, it expects to separate Frontier from its other business.

Frontier has been losing money. Republic has been turning around the airline's finances by getting rid of smaller planes and cutting unprofitable flights, especially in Milwaukee.

Bryan Bedford, the chairman and CEO of Republic Airways Holdings Inc., says Frontier should be profitable next year so the time has come to look for a way to split it from Republic. He says Republic will return to its roots feeding passengers to major airlines such as Delta and US Airways.

Republic bought Denver-based Frontier out of bankruptcy protection in 2009.

Thank god...

Independence Air, ExpressJet and now Republic. For some reason, the regionals are unable to break through and compete on their own. While I'm not a business expert and have no idea why this is, I have no doubt that others will attempt the jump and again fall short.

Running a real airline in the real world is a far cry from playing with airplanes in a FFD guaranteed profit scope gutting fantasy land.

They weren't the first and they won't be the last.

Apparently Republic only desires to own money losing airlines. haha. Profit? Thats not allowed!

Will it be spun off with the original pilots? Any inside info...

Yep, just what I thought. It's a tough business Bedford, why did you think you'd "have all the answers"

If I were Jetblue, I'd buy Frontier in a heartbeat. Same fleets, same enthusiasm by the employees, nice western hub, good routes to Mexico.

I could see B6 or VX for a quick way to expand their market share without adding any additional real capacity. We are a lot closer to shedding capacity then adding it, so I don't think they are in the cards for us.

The fun starts when Jerry Atkin's hand (and ego) is forced by the evolving regional sector. My bet is unless SWA caves on scope or USAir/AA is broken up somehow in SKYW's favor, he will try an IndyAir as by then he will have close to a billion in the bank. They will bleed out eventually and fade away, but it will be a rough few years for the industry to fend off yet another fare/yield trashing start up with several times more cash on day one than any start up in history.

I personally think it would be a bad move to compete with SWA and The worlds largest airline in DEN, and gain a MKE hub with a major AirTran/SWA entrenchment.

but...


JetBlue is pushing the pilots to sign away 10% of the ASM's. It would be interesting if JetBlue purchased frontier with a guaranteed FFD contract with republic to operate the 170/190's.(I hope this isnt the case.)

I guess they changed the airbus order today as well. (Republic Airways Confirms Order for 80 Airbus A320neo Family Aircraft - MarketWatch) it was 40- A320 40-A319 now 60-A320 20-A319 Whoever buys them will gain access to 80 Airbus NEO orders too.

These circumstances have never happened before, but there is a fence for another 6.5 years, so one would have to assume that the pilots go with the airplanes. IBT will likely argue differently.

Problem is they are also selling the F9 DCA slots. That is where the value is. The 318 is not a good jet for many of the current 320 series operators. The CASM is to high.

BB is trying to raise capital and failing to do so. Time to start selling off the limbs.

I could see an asset sale back to a lease company, but that is about it.

In my opinion if they can or do bundle the slots, B6 has the most to gain.

Oh please, please, please let us get rid of the excess baggage so we can finally start making money again!

And by "we" you mean the company, right?

I don't think the pilots at Republic ever made money.

RAH isn't selling the F9 DCA slots. The UsAir slots that UsAir sold to RAH during their bankruptcy are being sold back to them. F9 is actually trying to buy more slots.

There are only six 318s left. Two get returned in 2012 and the remaining four go back in 2013.

Not to mention Apple Vacation charter contracts to Mexico and the Dominican Republic.

It's looking very promising at this point. As for what has transpired up to now, things haven't changed, whereas with SWA, at least 1/3 of our pilots would have been furloughed, and the remainder would have been behind over 1/2 of the Air Tran list. I'm making about 30% more per year than before the bankruptcy, so from where I'm sitting, I have no huge complaints.

It is the network.

There is a reason why the airline business has become a struggle to grow SkyTeam, One World and Star Alliance, that is where the action is for higher yielding traffic. The other model is pseudo charter.

Unfortunately the best point to point airline in the World does not work as well from O&D market to O&D, whether it be Frontier, or Virgin Atlantic.

What about Virgin America and an F9 combo?

Do you think Richard Branson could afford to purchase unsold tickets on both VA and F9?

You mean like to get around the foreign investment/ownership laws? You should tell the feds about that. Interresting that a Delta line pilot would be privy to something like that, though. Or is this just some wild, unsubstantiated romour?

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Not only that, he can roll them into his little fake "US investor" guaranteed and bonded by foreign money 10% annual return scheme for more "US" funds.

However savvy a businessman he is, this is just beer money to him. He knows he can't take it with him and playing with airplanes and spaceships in the US is his number one fantasy.

As with anything, it all comes down to "interpretation". Screw the spirit of the law and all that. He found a loophole that we refuse to close that allows personal funding basically by pseudo-corporate charity. This is his baby and he will waste billions on it. Mere tens of millions is petty cash to him.

Wild unsubstantiated romours are something new to me. :D

BTW, it is interesting but not unreasonable, remember Delta line pilots are pretty damn smart. ;)

Sir Richard has stated in public he regrets not being involved in the original JetBlue deal. But, B6 is already 20% owned by Lufthansa and they are not exactly best pals with Virgin Atlantic, although the BMI deal may change the relationship. Lufthansa has a seat at the Board of Directors table, so not sure I see them approving a VA acquisition, besides Sir Richard likes to be in control and he would not have a vote in the new B6 company after a VA purchase.

As far as Frontier, I agree it would be a good acquisition for JetBlue, however, there is a reason they lost 100+ million recently, the premium revenue just does not exist in their markets that JetBlue desires. Why go up against UCal and WN when they have a dominant position in the region.

The real Tie-Up that would make sense for JetBlue growth and dominance in the NewYork, Caribbean and Latin American expansion would be for B6 to buy Spirit. Upgrade Spirits product and gain a dominant position in East Coast business market as well as International Growth, that is where the revenue is.

Thats funny. Could it be that youre just jealous of VX and the fact that "this Delta pilot" will be pulling gear for the next 18 years?? Seriously just get over yourself my friend. Branson couldnt give a donkey terd less about a busted down, out of touch F9 operation..... or buying a failing US airline. All he has to do is watch inept airline CEO'S run their prospective operations into BK and exiting from the business. And it costs him zero.

Mark my words, this will not happen. Just because other idiot CEO’s have attempted the move doesn’t mean one of our industry’s smartest regional strategist will.

Also SkyWest less than $500M COH not $1B since we've purchased XJT who’s bleeding money, invested millions in Asia for a startup operating CR9's with ASA pilots, millions more in Brazil with Trip Airlines and lent United something like $129M. Jerry and friends are too smart to attempt a move on Frontier; they'd rather play overseas where the money's better with less competition and maintain their FFD contracts domestically.

As I posted on another thread, this is not a "sale" of Frontier Airlines.

Bedford and the RAH BoD are looking for an initial investor to put down $100 million or so as the majority owner of the airline. The other minority owners will be RAH and the Frontier Pilots.

They will then IPO Frontier just like Spirit IPO'd last year.

After the IPO, all bets are off. The potential multiple here for PE is huge. Look at the Luftansa/JB deal. Luftansa plunked down more than $300 million in exchange for 20% ownership. At Frontier the price of admission will be $100 million in exchange for 50+% ownership.

In the grand scheme of things, $100 million is NOTHING in the PE world. When you look at the potential return on investment, you will see a few of the familiar faces lining up for this opportunity.

I'm a VX pilot. That was my attempt at sarcasm. So, no, I am not jealous of VX. Nor do I care if Forgot To Bid "pulls gear" now or ever. He's relatively well paid and works for a good company. Good for him.

A smart investor does not invest in the airline industry. Or an airline that is competing against SWA and barely treading water. Or an airline that is about 7 years behind in technology. Or an airline that has been hemorrhaging cash.

F9 is better off right where it is. Bedford's ego is WAY too big to ever let his little experiment fail. He will continue to dump money made off the FFD side into F9 until he retires or the BoD fires him.

Read the Q3 earnings report.

You are looking at this from the perspective of a traditional investor buying shares of common stock. You should be looking at this from an institutional investor's point of view.

$100 Million for a 50+% share of an IPO.

Oaktree has a 31% stake of Spirit. That 31% stake is currently worth $360,000,000.

The Spirit BoD Was granted 100,000's of stock options at around $12 a share. The stock is trading at $16. They all made big coin without risking a dime.

All of the Frontier pre-IPO participants are going to walk away happy.

Your second sentence in the last paragraph is the only thing you got right.

Bedford will not let this fail, there is way too much money to be made on the IPO.