Republic Airways Holdings Inc. has closed on the sale of Frontier Airlines to an investment fund affiliated with Indigo Partners LLC., Phoenix.
Under Siegel, who was in New Castle recently to announce the expansion of service from the airport in the spring, Frontier has undertaken a strategy of using New Castle (Wilmington-Philadelphia ILG) and Mercer County (Trenton) to serve the Philadelphia market with flights that go to a number of cities a few times a week. Service from New Castle was launched in July.
The strategy primarily targets leisure travelers who will not charge planes. However, Frontier does offer regular flights from New Castle to Denver that can connect to points throughout the West Coast and into Alaska.
Frontier will remain based in Denver, although industry observers will be watching to see if it continues to trim service from the Colorado capital.
Frontier has faced stiff competition from Southwest Airlines, which moved into Denver while trimming its schedule from Philadelphia.
Frontier did not fit into Indianapolis-based Republic’s strategy of providing short-haul flights that feed major carriers. Frontier competes with those carriers.
Frontier had settled into a low-fare strategy championed by Indigo, which sold its stake in deep-discounter Spirit Airlines so it could acquire in a deal that was largely comprised of taking on its debt load.
Frontier has added fees for soft drinks and coffee, but has not been as aggressive at Spirit in levying baggage charges or adding seats to aircraft to squeeze out more revenue. Changes are expected as Frontier’s operating costs are still higher than those of Spirit.
Indigo did profit handsomely from the investment in Spirit and has vowed to invest in expansion for Frontier, which has been cutting the size of its fleet.
