MIAMI — Republic Airways ended its search to find a buyer for Denver-based Frontier Airlines with a sale to Phoenix-based Indigo Partners LLC on Tuesday. The sale marks another step in the transition of Frontier toward an ultra-low-cost carrier. The deal was listed at $145million. Frontier (F9) will go on to assume all of the outstanding Airbus A320neo orders, though the status of an order for Bombardier’s CSeries aircraft remains unclear. So too does the future of Frontier’s Denver (DIA) hub.
Republic had been looking to unload Frontier for the better part of two years. Originally bought in bankruptcy in 2009, the Indianapolis based Republic had overseen a transformation of the carrier ever since. As their former owners guided the airline toward the world of the ultra-low-cost-carrier (ULCC), F9 had begun to turn the corner on its previously terrible finances. Still, Republic was ready to unload, aiming to focus on their regional operations.
Enter Indigo Partners LLC, which is no stranger to aviation – especially the ULCC market. The company had bought well known Spirit Airlines back in 2006 and turned it into the ULCC demon it is today. If that weren’t enough, Indigo’s co-founder and managing partner William Franke was also Spirit’s chairman for several years. The move to take on Frontier amounts to the Spirit playbook relocating from Florida to Denver, Colorado.
That is, of course, if Frontier stays in Denver at all. As the carrier switches to full-fledged ULCC mode, Denver may prove to be too expensive to keep around. The carrier has moved to ditch traditional markets and has increasingly gravitated to new ones where competition is either nonexistent or less frequent (and operations costs are lower): an ULCC hallmark. They recently started service to Wilmington, DE, and traded service to Sacramento, CA for smaller Fresno, CA. Frontier’s second largest airport is second-tier city Trenton, NJ. That Frontier is one of only two airlines to serve leisure destination Branson, MO is also indicative of the shift.
Yet Republic had already attempted to ditch Denver once before, moving executive leadership to Indianapolis, only to wind up returning much – though not all – top management to the Mile High City. The move was not popular with locals in Colorado and served a setback to F9’s image as Denver’s hometown airline. The move, along with others, has contributed to the carrier’s current third place ranking at DIA behind United and Southwest.
Relocation would also likely mean the loss of lots of knowledgeable people already with F9: 75% of the airlines’ employees are based in Denver. It’s not likely that they’ll all pick up and move on a dime, but with lots of people out of work the carrier should not have a hard time finding new people in a new city to replace them.
If the new owners can find a better deal to re-hub and regroup elsewhere, the Mile High City might quickly find itself in the rear-view mirror of a bunch of Frontier moving vans.
Originally founded in 1994 in response to Continental pulling out of Denver Stapleton, Frontier was one of the first airlines to offer high-quality service at a low-cost-carrier price. The airline was the second airline, after JetBlue, to offer onboard LiveTV. Easily recognizable with its fleet of animal themed tails, the Frontier started out with a fleet of 737s before it switched to an Airbus fleet in 2005. After being acquired by Republic in 2009 it was later merged with Midwest Airlines in 2010, before being sold [today] to Indigo Partners LLC.