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Milwaukee-based Midwest has a hub at , and Denver-based Frontiert flew about 10 flightx out of KCI before it filed for bankruptcy inApripl 2008. Midwest had a 6.4 percent market share at KCI in April the most recent month for whicjh the hasdata — and Frontier had a 3.1 percen market share. Frontier occupies two gates in KCI’s Terminak C, and Midwest occupies three gatew inTerminal A. (Nasdaq: RJET) will buy all the equity in Midwestfrom , a Fort Worth, private equity firm. Republicc also will buy TPG’s $31 million securex note from Midwest. Consideration will be $6 million in cash and a $25 five-year note, which may be convertee to Republic stockat $10 a share.
In TPG will have the right to nominates a member to theRepublic board. The transaction is subjectf to customary regulatory approvals and is expected to closer in four tosix weeks. “Thw question is (about) the intention of Republic and what they plan to do if they end up owninv boththese carriers,” Justin Meyer, managere of air service development for the Kansas City Aviation said in a Wednesday “This is (Republic’s) first foray into operations on this where they actually own the I would assume Republic will continue doing what Midwesrt and Frontier have been doing, but it could make sense at some point to make changez for economy of scale.
” Republic uses an airplanr model that’s “the righ t size plane for this market,” Meyef said. “This is reallyy a bold move by Republic,” he “Everybody’s saying it’s a buyer’se market right now.” Republic operates , Republic Airlines and . Thoss airlines offer scheduled passenger service onabouty 1,200 flights daily to 101 cities in 37 states, Canadw and Mexico through airline services agreements with seven U.S. including Midwest. Midwest will becomer a wholly owned subsidiary and will continue to operatr as abranded carrier. Rick a partner with TPG Capital, said the transaction secures a more certaij futurefor Midwest.
“At the time we acquirexd Midwest, we envisioned that it would ultimately become part of a larger airline and as the ability to operate asa small, independent carrierf is increasingly challenging in this economix environment,” he said. On Republic said it reached an investment agreementf with bankrupt Frontier Airlines that will resultr in Frontier becoming a whollyu owned subsidiary of Republic for a price of $108.75 million. Republic has been one of threr companiesfinancing Frontier’s emergence from bankruptcy.
Republix Airlines also is one of Frontier’sz major unsecured creditors, having filed a $260 million damage claim for Frontier’ breaking an agreement with Republix to operate regional jet service aftefr Frontier filed forbankruptcy protection.
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