It's only been two years since Republic Airways Holdings bested Southwest in the Frontier Airlines sweepstakes -- but the Republic-Frontier pairing is already headed for Splitsville. This week, Republic CEO Bryan Bedford said the firm is looking at selling Frontier, prompting speculation that Southwest or JetBlue may become bidders. But airline consultant Michael Boyd says don't bet on it.
Another industry expert, Jay Sorensen, calls JetBlue a long-shot suitor, while Small Cap Network notes that Southwest could pick up Frontier for less than it offered back in 2009. But neither argument holds water for Boyd, whose Boyd Group International is based in Evergreen.
Regarding Southwest, Boyd says, "Not a chance. You don't buy what you already have, and Southwest has already taken what it wants in Denver.
"The reality is, Southwest, for the first time in its history, got a very bad bloody nose when it entered the Denver market. For the first three years, Frontier hammered it, which is why Southwest was interested. Buying it would have taken out a competitor. But now, Southwest is so big that Frontier isn't really a competitor anymore. So that situation doesn't exist.
"We used to have two hometown teams in Denver: the Broncos and Frontier. But Republic frittered that away, because it diluted the brand by combining it with Midwest," another of its properties. "To be fair, they got stuck with that. Through a series of events, they had no choice but to say, 'We'll take it.' But now, you're sometimes on a plane with an animal on the tail and sometimes it says Midwest, and that diluted the product."
Meanwhile, Southwest has boomed, "and since it's already the largest local carrier in Denver, there's nothing Frontier offers them," Boyd says.
As for JetBlue, Boyd asks, "Why would JetBlue come into a market dominated by Southwest? There isn't a lot of opportunity there. JetBlue has always tried not to pick a fight with anyone when it comes into a market, and there'd be a big fight if they came here."
That doesn't mean Frontier has no value. "It's a very good airline," Boyd stresses. "When you get onto a Frontier plane, it's like going back to the 1950s. The people in the cabin are the best in the industry, and there's huge value in that. There's just not huge value for another airline to buy it."
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His most likely scenario: "Probably some investor group will buy it. And Republic will sell it to anybody who will get them out of the deal. So they're going to take the first halfway decent offer that comes in."
Whichever investors make this move, Boyd advises them to "circle the wagons in Denver. They still have huge brand loyalty here -- and they've earned it. The situation is still salvageable."
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