This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Republic Inks Deal to Sell Frontier Airlines

NEW YORK ( The Deal) -- Republic Airways Holdings (RJET - Get Report) on Tuesday, Oct. 1, said it has a deal in place to sell its Frontier Airlines unit to Indigo Partners LLC for $145 million in cash and assumed debt, but the parties still have significant issues to resolve before Frontier is free to fly solo.

Terms of the deal call for Phoenix-based Indigo to acquire Frontier for $36 million in cash, with the newly independent company retaining about $109 million in debt. Indigo said it will also invest an unspecified amount directly into Frontier after closing, and Frontier will assume Republic's Airbus new jet order.

Republic has had Frontier on the block since November 2011, and has been in talks with Indigo since the summer. The company had hoped to announce a transaction by its mid-September annual meeting, but the deadline to sign an agreement was extended to Sept. 30 to allow Indigo time to resolve outstanding issues.

There is still work to be done. Indigo was unable to resolve thorny equity rights issues with Frontier's flight attendants and pilots. As part of the deal, the private-equity fund has until Oct. 31 to secure necessary agreements with labor.

The work groups were granted equity rights in Frontier as part of a 2011 restructuring of the airline, but Indigo according to sources has been seeking to alter the terms of those equity agreements as part of the deal. Indigo also must deal with ongoing disputes between Frontier's former pilot union and the Teamsters, who represent Republic pilots.

Deal sources say that Indigo was stymied in efforts to resolve issues with the Association of Flight Attendants (AFA) and FAPAInvest LLC, the fiduciary for the pilot equity interest, but decided to sign an agreement before the Sept. 30 deadline instead of walking away. The private-equity firm has reason to hope the issues can be worked out in the weeks to come: The Teamsters last Friday filed a request to expedite litigation over the concessions for equity agreement between Frontier and the pilots and to clarify representation at Frontier.

The AFA told members last week it was not meeting with Frontier again until Oct. 9 to allow time for the airline to negotiate with pilots.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RJET $4.29 1.18%
AAPL $117.34 -0.81%
FB $107.12 2.76%
GOOG $767.04 3.29%
TSLA $237.19 3.01%


Chart of I:DJI
DOW 17,888.35 +168.43 0.95%
S&P 500 2,102.63 +22.22 1.07%
NASDAQ 5,156.3060 +47.64 0.93%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs