Southwest Airlines is gearing up to make a bid for bankrupt low-cost Frontier Airlines when it emerges from bankruptcy protection later this year.
The Dallas-based low-cost carrier confirmed it is preparing an offer worth a minimum of $113.6 million, beating the $108.8 million bid by commuter operator Republic Airways. The take-over would give Southwest a bigger foothold on routes out of Denver.
Southwest, the largest U.S. carrier by passengers, has been growing rapidly in Denver since re-entering the market in 2006 but is still No. 3 in market share.
Denver-based Frontier has 5,000 employees, 51 aircraft and serves 50 destinations in the United States, Mexico and Costa Rica.
United has a major hub in Denver and carries 36 percent of the airport’s passengers, followed by Frontier at 21 percent and Southwest at 12 percent, according to the U.S. Bureau of Transportation Statistics.
Southwest officials said they have been studying a bid for “some time” and expect to prevail.
“What motivated our thinking was simply an opportunity to get back into growth mode, following a very difficult economic period,” Ron Ricks, Southwest’s executive vice-president of corporate services, said.
Southwest officials said they would operate Frontier independently for an unspecified period of time until the carrier could be combined into Southwest.