26 July 2008

Sold - One Airline - Cheap. Frontier gets funding

Frontier managed to find a savior at the last minute. For $79 million DIP financing - Perseus basically picked up the ailing Denver based carrier. They will end up with the option to purchase just under 80% of the airline for $100 million.


I think they got a good deal. Whether it is a wise deal will remain to be seen.

I have high hopes for the chaps at F9. They will need all the luck they can get with UA squeezing them from the top and WN from below. However consider the situation. WN is not going to grow that much (however given their size "not much" is actually quite a lot since they are now the world's #1 passenger mover). UAL is dropping 25% of its fleet. So F9 may just be able to dodge the bullet if they can price their product right and get the mix right. I think they will unless they are incredibly stupid. Well this is the airline industry so you know what that means.



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