an airline holding company for regional carriers Chautauqua Airlines, Republic Airlines, and Shuttle America made a splash in the aviation world this week after purchasing two struggling airlines in just two days. Denver-based Frontier Airlines was purchased for $108 million on June 22, while teetering Milwaukee-based Midwest Airlines was acquired for $31 million on June 23.
Seventeen months ago, Midwest Airlines was bought out by Northwest Airlines for a whopping $452 million, but high fuel costs and reduced passenger demand had lowered the airline's value quite significantly, as evidenced by this recent acquisition. The Indianapolis-based Republic had previously loaned the gimpy Midwest $15 million to prevent it from filing bankruptcy.
Meanwhile, Frontier Airlines was operating under Chapter 11 bankruptcy protection, and owes Republic $40 million for a debtor-in-possession loan on top of $140 million in damages related to various operating agreements.
As wholly-owned subsidiaries of Republic Airways Holdings, Frontier and Midwest will continue to operate under their respective brands and will keep their route networks intact for now.