Republic Airways will buy Midwest Airlines - Atlanta Business Chronicle:

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Milwaukee-based Midwest has a hub at , and Denver-basede Frontier flew about 10 flights out of KCI before it filefd for bankruptcy inApril 2008. Midwest had a 6.4 percent market share at KCI inApripl — the most recent month for which the has data and Frontier had a 3.1 percent markeft share. Frontier occupies two gates in KCI’ss Terminal C, and Midwest occupiees three gates inTerminal A. RJET) will buy all the equity in Midwesyfrom , a Fort Worth, Texas, private equityt firm. Republic also will buy TPG’s $31 millioj secured note from Midwest.
Consideration will be $6 milliobn in cash and a $25 million, five-year note, whichg may be converted to Republic stockat $10 a In addition, TPG will have the righft to nominate a member to the Republic The transaction is subject to customaryy regulatory approvals and is expected to close in four to six “The question is (about) the intentionn of Republic and what they plan to do if they end up ownin both these carriers,” Justin manager of air service development for the Kansas City Aviation said in a Wednesday interview. “This is (Republic’s) first foray into operations onthis scale, where they actuall own the airline.
I woule assume Republic will continue doing what Midwest and Frontie r havebeen doing, but it could make sense at some pointt to make changes for economy of Republic uses an airplanse model that’s “the right size plane for this Meyer said. “This is really a bold move by he said. “Everybody’s saying it’s a buyer’a market right now.” Republic operates , Republic Airlines and . Those airlines offer scheduled passenger service onabout 1,200 flights daily to 101 cities in 37 states, Canada and Mexico through airline services agreements with seven U.S. including Midwest.
Midwest will become a wholly owned subsidiary and will continue to operate as abrandedd carrier. Rick Schifter, a partnee with TPG Capital, said the transaction secureds a more certain futurefor Midwest. “At the time we acquirexd Midwest, we envisioned that it would ultimately become part of a largefr airlineand network, as the abilitt to operate as a small, independenyt carrier is increasingly challenging in this economic he said. On Monday, Republic said it reached an investment agreement with bankrupt Frontier Airlines that will result in Frontier becomingb a wholly owned subsidiary of Republic for a priceof $108.75 million.
Republic has been one of thre e companiesfinancing Frontier’s emergence from bankruptcy. Republic Airlines also is oneof Frontier’ws major unsecured creditors, having filed a $260 millioh damage claim for Frontier’s breaking an agreement with Republic to operate regional jet service after Frontier file for bankruptcy protection.