The two Colorado-based independent carriers, Western Pacific Airlines (Westpac) and Frontier Airlines, have announced plans to merge and form one of the largest low-fare operators in the USA after Southwest Airlines.
The two airlines lost $21 million between them in the first quarter of 1997 and hope to achieve profitability through reaching "critical mass", says Western Pacific president and chief executive, Robert Peiser.
Under the agreement signed on 30 June, the deal will involve an exchange of 0.75 shares of Westpac stock for every Frontier share. This will give Frontier shareholders a 31% stake in the new and, as yet, unnamed airline.
The merger process is due to start on 1 August when the two airlines start an interim code-sharing operation to 25 destinations from Denver, Colorado. The full merger is expected to be completed by October when the combined fleet of more than 30 Boeing 737s will be operated to 26 destinations, with 86 daily departures. Westpac, which began operations in 1995, now operates 19 Boeing 737-300s with further aircraft on order. Frontier, dating from 1994, has seven 737-200s and four 737-300s.
Peiser will be chief executive of the new airline, although his opposite number, Frontier president Sam Addoms, will be "retained" as a consultant.
Despite the overlap of some administrative and management functions, the merger is not expected to result in many layoffs among the combined workforce of around 2,100 people.
The new airline may require extra staff, says Westpac. Mountain Air Express, Westpac's commuter affiliate, will serve the enlarged airline with up to 25 daily flights from Denver with its fleet of four Fairchild Dornier 328s.
Source: Flight International
