Southwest Airlines Co. has submitted a bid worth at least $113.6 million to acquire Frontier Airlines Holdings Inc under a bankruptcy auction, the companies said today.
Southwest said it has made a nonbinding proposal in accordance with procedures set up by U.S. Bankruptcy Court for the Southern District of New York.
The bid is greater than Republic Airways’ $108.75 million bid announced on June 22. Frontier field a petition in April to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
With the submission, Southwest now has the opportunity to engage Frontier in the due diligence required to make a binding proposal ahead of the August 10 court deadline. Frontier and its advisors will conduct an auction on August 11 if necessary to consider all qualified proposals to determine the best one.
Southwest’s Chairman, President and Chief Executive Officer Gary Kelly said in a statement that the company saw “a strong fit” in Frontier.
“[W]e are interested in a substantial investment in Frontier and to operate Frontier as a wholly-owned subsidiary, independently and separately from SouthWest Airlines, for a period of time until the carrier could be combined into SouthWest,” Kelly said in a posting to the airline’s blog.
He said the company made it was considering a bid independently of Republic’s bid and approached Frontier in the last month about SouthWest’s interest.
Southwest said it was premature to comment on the specifics of the proposal. However the company said acquisition would allow the airline to expand its network and boost competition in Denver and other cities.