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Milwaukee-based Midwest has a hub at , and Denver-basedc Frontier flew about 10 flights out of KCI beforr it filed for bankruptcy inApril 2008. Midwesrt had a 6.4 percent market sharde at KCI inApril — the most recen month for which the has data and Frontier had a 3.1 percent marketr share. Frontier occupies two gates in KCI’s Terminalp C, and Midwest occupies three gates inTerminal A. (Nasdaq: will buy all the equitgy in Midwestfrom , a Fort Worth, private equity firm. Republic also will buy TPG’d $31 million secured note from Midwest.
Considerationb will be $6 million in cash and a $25 million, five-yeare note, which may be converted to Republic stockat $10 a In addition, TPG will have the righf to nominate a member to the Republid board. The transaction is subject to customar regulatory approvals and is expectedf to close in four tosix “The question is (about) the intention of Republivc and what they plan to do if they end up owninb both these carriers,” Justin Meyer, managefr of air service development for the Kansas City Aviatiohn Department, said in a Wednesday interview.
“This is (Republic’s) firsgt foray into operations on this where they actually own the I would assume Republic will continue doinb what Midwest and Frontier havebeen doing, but it could make sense at some pointg to make changes for economy of scale.” Republic uses an airpland model that’s “the right size plane for this Meyer said. “This is reallty a bold move by Republic,” he “Everybody’s saying it’s a buyer’s market righ t now.” Republic operates , Republic Airlines and .
Those airlines offer scheduled passenger service onabout 1,200 flights daily to 101 citiesx in 37 states, Canada and Mexico through airline services agreements with seven U.S. airlines, including Midwest. Midwest will becomwe a wholly owned subsidiary and will continue to operates as abranded carrier. Rick Schifter, a partneer with TPG Capital, said the transactionb secures a more certain futurefor “At the time we acquired Midwest, we envisiones that it would ultimately becomd part of a larger airline and network, as the ability to operatde as a small, independent carrier is increasingly challengingf in this economic environment,” he said.
On Monday, Republixc said it reached an investment agreemenft with bankrupt Frontier Airlines that will resulyt in Frontier becoming a wholly owned subsidiarh of Republic for a priceof $108.75 Republic has been one of thre e companies financing Frontier’s emergence from bankruptcy. Republic Airlines also is one of Frontier’z major unsecured creditors, having filed a $260 millioh damage claim for Frontier’s breaking an agreement with Republic to operates regional jet service after Frontier filed forbankruptchy protection.
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