Frontier's Reorg Plan is Approved But What Is Their Business Plan?

Last Updated Sep 11, 2009 10:05 AM EDT

Frontier has passed yet another hurdle down the long road that is known as Chapter 11 bankruptcy. Yesterday, the bankruptcy court approved the plan of reorganization. Exit is now scheduled to be around October 1, but what's next?

As noted in the release, Frontier "successfully resolved the few objections to its Plan of Reorganization prior to today, resulting in an uncontested confirmation hearing." That's always good to hear, but now we're just mopping up. Now it's time for the real fun to begin.

On October 1 (give or take), Frontier will emerge as a wholly owned subsidiary of Republic. What will they do? I imagine that with the plan or reorganization cleared, they can start putting out their business plans that they must have been working on for months now.

When Republic's bid for Frontier was chosen as the winner, I said:

Republic is a pro at flying airplanes under all different kinds of brands. So it wouldn't surprise me to see them merge the operational side of the house along with back office functions [of Midwest] while still keeping separate brands. Why bother? Well, Midwest still has some fleeting value in Milwaukee while we know Frontier has value in Denver.
Since that time, I've refined my thinking a bit more here. For Republic, their brands are nothing but operational groupings. For example, Chautauqua is a regional jet operator while Shuttle America is a larger Embraer operator. So why wouldn't Frontier be their Airbus operator? Yes, Frontier will keep its own public brand as well, but CEO Bryan Bedford has already said that we'll see Frontier airplanes in Milwaukee. I bet those will be operated by Frontier under a Midwest brand name.

See, Republic is the master of operating under a bunch of different brands. So if there's brand equity with Frontier in Denver and Midwest in Milwaukee, they'll keep them. But, I bet they'll have a mix of aircraft operated by a mix of carriers in each market. So we might see regional jets operated under the Frontier name by Chautauqua. Heck, I bet that if Bedford could find a way, we'd see Frontier operating Airbus aircraft under a legacy carrier name as well. (Good luck.)

Of course, this is all just random speculation in my head, but there is the potential for doing things differently here. With the plan of reorganization approved, we should start see things happening. Hopefully we'll know more about their future strategy as things begin to unfold.