Wed, Jun 24, 2009
Creditor To Help Struggling Airline Out Of Chapter 11
Frontier Airlines Holdings, Inc.
announced Monday it has entered into an investment agreement with
Republic Airways Holdings, Inc., by which Republic will serve as
equity sponsor for Frontier's plan of reorganization and purchase
100% of the equity in the reorganized company for $108.75 million.
The plan sponsorship agreement is subject to bankruptcy court
approval and various conditions.
If the plan of reorganization is approved and implemented as
proposed, upon its emergence from Chapter 11, Frontier Airlines
Holdings would become a wholly owned subsidiary of Republic, an
airline holding company that owns Chautauqua Airlines, Republic
Airlines and Shuttle America. Frontier Airlines and Lynx Aviation
would maintain their current names and continue to operate as
usual. Republic is currently one of Frontier's creditors.
"This agreement represents a major milestone in our ongoing
efforts to position Frontier to emerge from bankruptcy as a
competitive, sustainable airline," said Sean Menke, Frontier
President and Chief Executive Officer. "Through our reorganization
process, we have transformed Frontier Airlines and Lynx Aviation
into two of the most efficient operating carriers in North America.
Additionally, we diversified our revenue generation through the
introduction of ancillary charges and our branded 'AirFairs'
product. The culmination of all this extraordinary work is that,
even in the worst economic environment in the last 50 years, the
company has posted an operating profit for each of the past six
months and a net profit for the past two quarters."
Menke continued, "I would be absolutely remiss not to thank the
thousands of Frontier and Lynx employees, and their families, for
their sacrifice and dedication during these extraordinary times.
They are truly the heart and soul of the company. We are pleased
that this agreement allows our customers and communities to
continue to receive the outstanding service for which Frontier is
known, while preserving the jobs of most Frontier employees."
"We commend Frontier and its employees for their hard work and
accomplishments during this difficult restructuring period," said
Bryan Bedford, chairman, president and CEO of Republic Airways. "We
believe this agreement represents a new beginning for Frontier,
positioning it to build on its recent successes and strengthen the
Frontier brand for the benefit of employees and the customers and
communities it serves."
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