Southwest Airlines confirmed (10-Aug-09) it has submitted a binding cash offer of more than USD170 million for Frontier Airlines. The offer is well above Republic Airways’ USD108.8 million bid. Frontier will be sold at auction on 13-Aug-09, as part of Frontier's bankruptcy case (AP, 10-Aug-09). Southwest reportedly plans to acquire approximately 80% of Frontier's existing Airbus fleet (or approximately 40 aircraft), plus all of Lynx. Initially, Frontier would operate its Airbus aircraft as it does today, with a planned retirement of the Airbus fleet and transition to Southwest's B737s over a period of approximately 24 months. Southwest intends to maintain all existing markets, as well as add new non-stop routes from Denver that are not currently served by either carrier. [more at AmericaAviation.aero]
Southwest Airlines submits binding cash offer for Frontier
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US airlines and the Cuba route awards Part 2: Cuba's smaller airports face a major influx
Now that US regulators have made their decisions on service awards for Cuba, the airlines must now prepare to serve a country with unique challenges – ranging from airport infrastructure to hotel room availability. The significant hurdles have not quelled excitement over the re-establishment of scheduled airline services to Cuba, which will resume later in 2016.
Aside from the closely watched contest to win service to Havana, the US DoT also awarded service rights to nine other secondary Cuban cities and, not surprisingly, South Florida features prominently in those route assignments. Gauging accurate levels of demand in those markets could take some time to determine. With a 50-plus year absence of scheduled airline flights between the US and Cuba, there is no up-to-date data from which to measure demand patterns.
Although Cuba holds much promise, an ample level of guesswork will be necessary as airlines navigate dealing with the Cuban government in order to ensure a smooth service launch. Some level of passenger education is also necessary in order to create the right set of customer expectations for travel to Cuba.
(This is Part 2 in a series of reports examining route awards between the US and Cuba. Part 1 focused on awards rights from the US to Havana.)
US airlines and the Cuba route awards Part 1: The US DoT slices up many pieces of the Havana pie
US regulators have decided to spread Havana award rights among eight operators – a mix of global full service airlines, medium frills low cost carriers and ULCCs. Unsurprisingly, given the concentration of Cuban Americans residing in the region, South Florida features prominently in the tentative award approvals.
In theory, the DoT’s proposed route structure ensures that customers travelling to Havana have access to a wider range of fare prices and product offerings. In many respects the agency had little choice but to accommodate as many airlines as possible for service to Havana – in order to ensure that consumers had an array of service providers as scheduled air service resumes between the US and Cuba.
There may be some quibbles regarding the tentative route awards to Havana, but the route composition proposed by the DoT is not likely to change drastically. The agency’s route dispersal reflects certain expectations that the agency would institute a certain level of competitive diversity on new services to Havana.
(This is Part 1 in a series examining US-Cuba route awards. Part 2 will examine markets other than Havana)