As you’ve probably all heard, Republic ended up getting Frontier in the end, and to be honest, that’s not the result I expected. I did write about this topic last evening, but I posted about 15 minutes after the press releases came out. Now, I’ve had some time to formulate some more thoughts, and here they are, in no particular order:
Why did Southwest wait so long?
Southwest submitted its nonbinding bid very close to the deadline. Why? I can understand the strategy behind waiting for the last minute to evaluate the playing field, surprise a competitor, give that competitor less time to respond, etc. But why wait until the last minute, especially when Southwest said they were looking at Frontier for awhile? If Southwest submitted its nonbinding bid a couple of weeks earlier, and the pilot unions had more time to talk to one another, could they have found a suitable agreement?
What is Republic’s long-term plan?
Republic already made an interesting move when they went mainline by acquiring Midwest, but Frontier is a whole different animal. (Get it? OK, sorry, moving on…) First, Frontier has a much larger fleet with 51 Airbus aircraft, a mix of A318s, A319s, and A320s. Second, Republic will now be competing head-to-head with United in many markets. Republic does flying for United with its Shuttle America and Chautauqua subsidiaries – what does this mean for their relationship going forward? Will Republic order more A320-family aircraft for Frontier? How aggressive will Republic be with Frontier? Could the carrier be expanded out of a city other than Denver in the future?
Frontier and Midwest?
Frontier and Midwest have already becoming codeshare partners. According to Aviation Week, a Republic executive “squashed the notion that Republic’s deals to acquire both Frontier and Midwest are part of some grand plan,” I’m still wondering. What does “Now, we have to turn our attention to the important work of integrating two great brands: Frontier and Midwest Airlines,” really mean? (That is a comment from Republic CEO Bryan Bedford.) Is it something as benign as “welcome to Republic,” or could something more be happening? Or maybe I’m just reading into that statement too much.
How does Southwest deal with Frontier now?
It’s been reported many times that Frontier has held up against Southwest, and perhaps has been even more financially successful in Denver. How will Southwest try to compete now? I think that answer is probably determined at least in part by Republic’s plans.
What does United think?
Despite what Southwest was trying to say how their move would increase competition, I have to think that United’s kind of bummed about this one – now they’re stuck with two major competitors.
A hint of future (domestic) markets for Southwest?
When they were going to buy Frontier, Southwest was interested in maintaining service to both ATL and DCA. Are they still interested in both? Are they willing to buy DCA slots from another carrier?
Does Southwest want a regional operation?
When Southwest submitted its nonbinding bid, they didn’t have a whole lot to say about Frontier’s Lynx subsidiary, but that changed on Monday, when Southwest was pretty excited about it and even seemed open to the idea of expanding it. Is Southwest still interested in some kind of a regional carrier?
What puts Southwest back in growth mode now?
It was said that this move would put Southwest back into growth mode, in fact I think the phrase that was used was “rapid growth mode.” What now? Southwest has been adding cities to the route map this year (MSP, LGA, BOS, MKE), but that growth has occurred without expanding the fleet. Southwest has more 737s on order next year – what will they do with them? This year’s new cities all have a relatively low number of flights – will Southwest want to expand those? (Though expanding LGA would require finding more slots.)
Is there potential for Southwest doing its own international service?
Southwest sounded interested in maintaining Frontier’s Mexico flights, which would have Southwest flying internationally for the first time. Having WestJet and Volaris potentially doing all transborder flying has been a contentious issue with Southwest pilots, and the codeshare has been listed as one reason their TA was voted down. What’s Southwest’s international strategy now?
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