A press release was issued today announcing that Southwest Airlines has submitted a proposal to acquire Frontier Airlines, which will be sold at auction in bankruptcy court this month. The following memo was sent to all Southwest Airlines Employees from our CEO, Gary Kelly.
This morning Southwest Airlines submitted a bid of more than $170 million to acquire Frontier Airlines, which has been in bankruptcy since April 2008. We understand an auction will commence later this week in New York. Once the auction is concluded, the bankruptcy court must approve the selection of the winning bidder. So really, we just don’t know when it will be that we’ll hear about these results, but I commit that we’ll keep you informed as we go.
We believe Southwest’s bid represents the best possible longterm scenario for Frontier, its Employees, and the Denver traveling public. Southwest brings to the table the most consistently profitable airline in commercial aviation history, the best Customer Service record in the industry (as repeatedly determined by the Department of Transportation), an Employee-centric Culture, and low fares. If we are successful in our bid, Southwest will offer a financially stable, Customer friendly, low fare alternative to the dominant carrier in Denver into the future.
I have seen and read speculation and reports as to why Southwest would be interested in acquiring Frontier. Simply enough, Frontier is for sale, and purchasing them would allow us to increase our Customer base in a city where we want to grow. Frontier also is a stellar airline with a great reputation known for quality Customer Service, passionate Employees, and low fares. Sound familiar? Those are the three main ingredients that Southwest Airlines was founded on more than 38 years ago, and those three values remain at the core of our DNA today. While there are obviously some differences in our companies, we also see a lot of similarities.
I have also seen some speculation as to why this move makes sense for Southwest Airlines. Southwest is a growth company. Who would have ever thought 38 years ago that we would grow from offering service between three Texas cities to carrying more passengers than any other carrier in the United States? Pretty remarkable, and even more remarkable is the fact that we have grown while being profitable for 36 consecutive years – a feat unmatched and unheard of the airline industry!
We began serving Denver in January 2006 with just 40 Employees and 13 daily nonstop flights. Today, we have nearly 400 Denver Employees and operate 113 daily nonstop flights to 34 destinations from the Mile High city, making Denver the fastest growing city in our history, and already among our top 10 airports (out of 66 and growing) that we serve in terms of daily departures. It’s clear Colorado Customers appreciate our low fares, great service, and convenient schedule to places they want to go.
If our bid is successful, we will return to growth mode in the midst of a deep recession, expand our network in Denver to include many attractive destinations that we don’t currently serve today, and offer Denver travelers a stable, low fare airline with legendary Customer Service to compete against the dominant carrier at DIA.
Through this acquisition, Southwest will continue to provide Denver a financially stable source of its historically low fares well into the future. There should be no doubt; the bankruptcy process will require some change to Frontier in any scenario. Given Southwest's history and track record of running a successful airline, we believe that our bid is the best option on the table for Frontier, Southwest, and the traveling public. A successful acquisition of Frontier Airlines by Southwest will expand our network of legendary low fares to additional cities, add jobs into Southwest through growth, and strengthen low-fare competitive pressure in Denver and other cities.
To listen to a conference call held today to discuss Southwest’s bid proposal with Ron Ricks, Executive Vice President Corporate Services and Corporate Secretary, and Bob Jordan, Executive Vice President, Strategy and Planning, please click HERE. To read a transcript from the call, please click HERE.
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Comments
Will Southwest continue to operate the Mexican destinations if this plan works out?
Great job Gary. Keep up the good work!
What will happen with all of those Frontier employees?
Ok so thats what everyone expected but did you notice there was no REAL mention of F9 employees in his statement? Other than passionate employees. Well thats great, hopefully he will not be sending that passion to the unemployment lines.
We don't want some of those "passionate" employees over here at Southwest who have been constantly bashing us in the blogs over the past two weeks. That would just ruin the culture over here. We want people who actually want to become Southwest employees rather than considering themselves as Former Frontier employees.
in regards to the F9 employees i would like to reply to the comment stated up they have every right to feel the way they do lets just say what if the shoe was on the other foot how would you feel? so they do have every right to worry about losing there jobs and so what if they came to southwest with the attitude of i was an ex frontier employee the important issue here is to grow the airline in denver and to try to save there jobs!
I'm all for Southwest and their growth, I only hope that all employees are treated fairly and those Frontier employees who have a problem with SWA then quit and I challenge you to find another job in this highly unstable economy!!!! I truly dont wont angry and disgruntled frontier employees coming over to SWA and bringing the bad influences in!!!
"We don't want some of those "passionate" employees over here at Southwest who have been constantly bashing us in the blogs over the past two weeks."
They were upset and you guys did some pretty good bashing yourselves. Maybe you need to put yourself in their shoes and try and understand what I knee jerk reaction is. They are great people with families to feed just like you. Thin skin is not good in this industry.
I think this is BS, Southwest can't compete, so lets buy the competition. This is so bad for the Frontier employees it isn't funny. Southwest has become the cancer of the airline industry!
@Joey H....Frontier was in bankruptcy...for the SECOND TIME. That is a failed airline! SWA is not!!!
RAH probably would have messed up F9 the same way that they are currently messing up Midwest Airlines. At least with SWA there will most likely be a DEN base and the employees will have a chance at a job with a company with a stellar reputation and has never been in bankruptcy. If you can't see that, you're blinded by pride.
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