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Southwest may fly high with Frontier

Marketplace Staff Aug 13, 2009
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Southwest may fly high with Frontier

Marketplace Staff Aug 13, 2009
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TEXT OF STORY

Steve Chiotakis: The bankrupt Frontier Airlines goes up for auction in a few hours. The Denver-based low-cost carrier was expected to be bought by the regional airline, Republic. But Southwest Airlines is now likely to be Frontier’s owner. A move that would raise eyebrows across the airline industry. Here’s Marketplace’s Jeremy Hobson.


Jeremy Hobson: First and foremost, the acquisition would set up a big contest in Denver. The mile-high city is one of United’s main hubs. And according to S, H and E aviation consultant Webster O’Brien…

WEBSTER O’BRIEN: In Denver, Southwest will pull to parity with United.

Southwest will also get its first international routes — to Mexico and Costa Rica — if its bid for Frontier is successful. And it’ll get access to Frontier’s other U.S. markets, including Atlanta, home to the busiest airport in the world.

O’BRIEN: What it means is that you’re picking up the expertise and you’re picking up the ground presence and you’re picking up the sales distribution. Many of the things that take time and expense to build up on your own.

Seth Kaplan of Airline Weekly says anyone who still thinks of Southwest as a little brother to the Uniteds and Americans of the world should think again.

SETH KAPLAN: You know Southwest is an airline that adapts very well to a changing marketplace. A lot of the things that they’ve done right over the years have put them in a position to do this.

And knocking off a low-cost competitor may be a particularly good idea right now. Southwest’s CEO told a industry conference yesterday that ticket prices are going to have to go up soon — to cover costs.

In New York, I’m Jeremy Hobson for Marketplace.

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