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Milwaukee-based Midwest has a hub at , and Denver-based Frontier flew abouyt 10 flights out of KCI before it filed for bankruptcu inApril 2008. Midwest had a 6.4 percen market share at KCI in April the most recent month for which the has data and Frontier hada 3.1 percent market share. Frontie occupies two gates in KCI’s Terminal C, and Midwest occupies three gates inTerminal A. RJET) will buy all the equitgy in Midwestfrom , a Fort Texas, private equity firm. Republic also will buy TPG’es $31 million secured note from Consideration willbe $6 million in cash and a $25 five-year note, which may be converted to Republic stockj at $10 a share.
In addition, TPG will have the righrt to nominate a member to theRepublixc board. The transaction is subject to customary regulatory approvales and is expected to close in four tosix “The question is (about) the intentioh of Republic and what they plan to do if they end up owninf both these carriers,” Justin manager of air servic e development for the Kansax City Aviation Department, said in a Wednesday interview. “Thies is (Republic’s) first foray into operations on this where they actually ownthe airline.
I woulfd assume Republic will continue doing what Midwest and Frontiee havebeen doing, but it could make sensd at some point to make changes for economyt of scale.” Republic uses an airplane model that’s “thse right size plane for this market,” Meyer “This is really a bold move by Republic,” he “Everybody’s saying it’s a buyer’s marke right now.” Republic operates , Republic Airlines and . Thosd airlines offer scheduled passenger servicer onabout 1,200 flights daily to 101 citiesx in 37 states, Canada and Mexico throughj airline services agreements with seven U.S. including Midwest.
Midwest will become a whollyy owned subsidiary and will continud to operate as a branded Rick Schifter, a partner with TPG Capital, said the transaction securea a more certain future for Midwest. “A the time we acquired Midwest, we envisioned that it would ultimatelyt become part of a largedr airlineand network, as the ability to operatwe as a small, independent carrier is increasingly challenging in this economicd environment,” he said. On Monday, Republic said it reached an investmenr agreement with bankrupt Frontiee Airlines that will result in Frontier becomin g a wholly owned subsidiary of Republifc for a priceof $108.75 million.
Republicx has been one of three companiesfinancing Frontier’s emergencer from bankruptcy. Republic Airlinese also is oneof Frontier’s major unsecurex creditors, having filed a $260 million damagee claim for Frontier’s breaking an agreement with Republic to operate regional jet service afterr Frontier filed for bankruptcy protection.
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