Frontier Airlines, fresh off a move to sell $92 million in debt, is poised to cherry-pick pieces of its struggling competitors if the right opportunities arise, the carrier's chief financial officer said Thursday."There are a lot of assets coming up for sale in our business," Paul Tate, Frontier's senior vice president and CFO, said at an airline conference in New York City that linked to a live audio broadcast. "If we see something of interest . . . we'll have a little bit more flexibility to execute on that."
Denver-based Frontier, the city's second-largest carrier, did not say what assets it might be interested in, although analysts speculated the carrier might seek airport gates, ground equipment or planes.
Frontier stressed that it is not interested in buying whole companies and that it could use the money for a variety of purposes. The carrier might, for instance, retire other debt or bolster its cash reserves as it prepares to compete with low-cost king Southwest Airlines, which will start service from DIA on Jan. 3.
"This is not earmarked for anything in particular," said Frontier spokesman Joe Hodas. "Given the shake-ups that are occurring and will be for another year or two in our industry, this helps protects us on both sides, whether there's a downturn for us or an opportunity."
There certainly could be opportunities.
Several airlines, struggling to make money in an industry hammered by rising oil prices and overcapacity, are seeking to pare their assets.
Low-fare carrier Independence Air, for example, filed for Chapter 11 bankruptcy protection last month and is going through a court-supervised auction process.
Speculation that Frontier could be interested in some of the airline's assets has heated up in recent weeks.
The director of Yeager Airport in Charleston, W.Va., recently said he heard from industry sources that Frontier could be a potential buyer, according to the Charleston Gazette.
And on Monday, Independence Air, which primarily serves cities in the Midwest and Eastern parts of the country, announced that numerous parties have shown interest in acquiring the company, buying some of its assets or investing in the airline.
It declined to release the names of interested parties.
"The entire process is being conducted in total confidence" said Rick DeLisi, an Independence Air spokesman. DeLisi said the auction process could be wrapped up soon, possibly by early next year.
Frontier declined to say whether it is one of the potential bidders, stressing that it doesn't comment on rumors or speculation.
Some analysts say it might make sense for Frontier to buy some or all of the carrier's assets, including Airbus planes, which Frontier flies as well.
"At a time when airlines in bankruptcy are removing frequencies and service on a lot of routes, there's an increasing opportunity to gain market share because of a decline in competition," said Frontier analyst Mike Shonstrom. "This could be an opportunity to acquire planes, gates and spare parts."
Others, though, say such an acquisition could be a disaster for Frontier.
"Independence Air as an entity is a dog," said Evergreen-based aviation consultant Mike Boyd. "It doesn't make money. They do have (Airbus) planes, but I would think that picking up parts of the airline would be a real difficult thing to pull off."
In addition to talking about potential acquisitions, Frontier's Tate reiterated Thursday the airline's interest in adding nonstop routes to cities in Canada and cementing code-share agreements with domestic and international carriers.
Not high on airline
• Mike Boyd, Evergreen-based aviation consultant: "Independence Air as an entity is a dog. It doesn't make money. They do have (Airbus) planes, but I would think that picking up parts of the airline would be a real difficult thing to pull off."
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