Skip to main content

Southwest Airlines Community

Southwest Airlines CEO Gary Kelly on Bid for Frontier

Not applicable
A press release was issued today announcing that Southwest Airlines has submitted a proposal to acquire Frontier Airlines, which will be sold at auction in bankruptcy court this month.  The following memo was sent to all Southwest Airlines Employees from our CEO, Gary Kelly.

This morning Southwest Airlines submitted a bid of more than $170 million to acquire Frontier Airlines, which has been in bankruptcy since April 2008.  We understand an auction will commence later this week in New York.  Once the auction is concluded, the bankruptcy court must approve the selection of the winning bidder.  So really, we just don’t know when it will be that we’ll hear about these results, but I commit that we’ll keep you informed as we go.  

 

We believe Southwest’s bid represents the best possible longterm scenario for Frontier, its Employees, and the Denver traveling public.  Southwest brings to the table the most consistently profitable airline in commercial aviation history, the best Customer Service record in the industry (as repeatedly determined by the Department of Transportation), an Employee-centric Culture, and low fares.  If we are successful in our bid, Southwest will offer a financially stable, Customer friendly, low fare alternative to the dominant carrier in Denver into the future.    

 

I have seen and read speculation and reports as to why Southwest would be interested in acquiring Frontier.  Simply enough, Frontier is for sale, and purchasing them would allow us to increase our Customer base in a city where we want to grow.  Frontier also is a stellar airline with a great reputation known for quality Customer Service, passionate Employees, and low fares.  Sound familiar?  Those are the three main ingredients that Southwest Airlines was founded on more than 38 years ago, and those three values remain at the core of our DNA today.  While there are obviously some differences in our companies, we also see a lot of similarities.   

 

I have also seen some speculation as to why this move makes sense for Southwest Airlines.  Southwest is a growth company.  Who would have ever thought 38 years ago that we would grow from offering service between three Texas cities to carrying more passengers than any other carrier in the United States?  Pretty remarkable, and even more remarkable is the fact that we have grown while being profitable for 36 consecutive years – a feat unmatched and unheard of the airline industry!  

 

We began serving Denver in January 2006 with just 40 Employees and 13 daily nonstop flights.  Today, we have nearly 400 Denver Employees and operate 113 daily nonstop flights to 34 destinations from the Mile High city, making Denver the fastest growing city in our history, and already among our top 10 airports (out of 66 and growing) that we serve in terms of daily departures.  It’s clear Colorado Customers appreciate our low fares, great service, and convenient schedule to places they want to go.  

 

If our bid is successful, we will return to growth mode in the midst of a deep recession, expand our network in Denver to include many attractive destinations that we don’t currently serve today, and offer Denver travelers a stable, low fare airline with legendary Customer Service to compete against the dominant carrier at DIA.  

 

Through this acquisition, Southwest will continue to provide Denver a financially stable source of its historically low fares well into the future.  There should be no doubt; the bankruptcy process will require some change to Frontier in any scenario.  Given Southwest's history and track record of running a successful airline, we believe that our bid is the best option on the table for Frontier, Southwest, and the traveling public.  A successful acquisition of Frontier Airlines by Southwest will expand our network of legendary low fares to additional cities, add jobs into Southwest through growth, and strengthen low-fare competitive pressure in Denver and other cities.

To listen to a conference call held today to discuss Southwest’s bid proposal with Ron Ricks, Executive Vice President Corporate Services and Corporate Secretary, and Bob Jordan, Executive Vice President, Strategy and Planning, please click HERE.  To read a transcript from the call, please click HERE.

 

126 Comments
Not applicable
Will Southwest continue to operate the Mexican destinations if this plan works out?
Not applicable
Great job Gary. Keep up the good work!
Not applicable
What will happen with all of those Frontier employees?
Not applicable
Ok so thats what everyone expected but did you notice there was no REAL mention of F9 employees in his statement? Other than passionate employees. Well thats great, hopefully he will not be sending that passion to the unemployment lines.
Not applicable
We don't want some of those "passionate" employees over here at Southwest who have been constantly bashing us in the blogs over the past two weeks. That would just ruin the culture over here. We want people who actually want to become Southwest employees rather than considering themselves as Former Frontier employees.
Not applicable
in regards to the F9 employees i would like to reply to the comment stated up they have every right to feel the way they do lets just say what if the shoe was on the other foot how would you feel? so they do have every right to worry about losing there jobs and so what if they came to southwest with the attitude of i was an ex frontier employee the important issue here is to grow the airline in denver and to try to save there jobs!
Not applicable
I'm all for Southwest and their growth, I only hope that all employees are treated fairly and those Frontier employees who have a problem with SWA then quit and I challenge you to find another job in this highly unstable economy!!!! I truly dont wont angry and disgruntled frontier employees coming over to SWA and bringing the bad influences in!!!
Not applicable
"We don't want some of those "passionate" employees over here at Southwest who have been constantly bashing us in the blogs over the past two weeks." They were upset and you guys did some pretty good bashing yourselves. Maybe you need to put yourself in their shoes and try and understand what I knee jerk reaction is. They are great people with families to feed just like you. Thin skin is not good in this industry.
Not applicable
I think this is BS, Southwest can't compete, so lets buy the competition. This is so bad for the Frontier employees it isn't funny. Southwest has become the cancer of the airline industry!
Not applicable
@Joey H....Frontier was in bankruptcy...for the SECOND TIME. That is a failed airline! SWA is not!!! RAH probably would have messed up F9 the same way that they are currently messing up Midwest Airlines. At least with SWA there will most likely be a DEN base and the employees will have a chance at a job with a company with a stellar reputation and has never been in bankruptcy. If you can't see that, you're blinded by pride.
Not applicable
Sound's like It's On!
Not applicable
Not All F9 employee's are upset. Sure we have a great brand here in Denver and it is sad to see it go. But most just want to get on with our lives with jobs. Once this is all worked out, I think you will find a great team here in Denver.
Not applicable
I am a Frontier employee and yes I am concerned about losing my job. I am also concerned, that mos of us will not be given an offer. I do however; plan to come to work every day and perform my duties. If Southwest is the winning bidder, then I hope I will be offered a position with them. I will give them the same work ethic that I bring to Frontier, two years of perfect attendance and never late, and when I am at work I actually work.
Not applicable
Joey, Welcome to the airline business. I suggest you start reading some books about Airline Industry History. Hopefully all the Frontier employees can get a fair shake in all this. Good luck flying on United.
Not applicable
Really? Did someone just write, "southwest can't compete so they just buy the competition?" Guess what, if they have the money to, then they surely are competing against someone and winning. Personally, I'm not so sure about fully integrating Frontier into the the SWA model. Frontier serves some "leisure" destinations outside of the lower 48 that Southwest does not. Why not operate Frontier as an independent airline joining Southwest focus cities to the prime leisure destinations?
Not applicable
Say good-bye to Frontier Airlines and hello to the unemployment line. If you think SWA is going to keep anything except the gates they receive in the deal, your dreaming or smoking something or doing both. Republic is just financial help to get Frontier out of bankrupcy and the opportunity to keep the airline going. I see nothing negetive at Midwest Airlines to suggest Republic has anything except great intentions for both. SWA is a cancer and in the end, it will over take all. Then watch were your low fares go!
Not applicable
If you keep some Frontier employees they will have to pass a heavy duty interview and training to even get to hold a candle to the kind of people Southwest has. We will need a chisel and hammer to brake through their bad Customer Service habits to turn them to Southwest top notch. They will need the Over the Top Customer Service skills Southwest Employees currently have. Also, that seniority will fall under any Southwest Airline employee. I hope that is a prerequisite in buying Frontier Airlines. We did that with Muse Air & TranStar many moons ago. Otherwise, it's a good financial move for Southwest Airlines and it's growth. Go For It!!! Good luck Southwest I still love you even after retirement. I miss you and God bless!
Not applicable
"Republic is just financial help to get Frontier out of bankrupcy." I didn't realize that Republic was a non-profit philanthropic agency? Since when do companies just give out money to "help."
Not applicable
Personally I am excited at the possibility of Denver becoming our 9th crew base. That would definately provide jobs for former Frontier employees. Southwest really cares about people, and I am sure the people at Frontier should get a fair shake in this process.
Not applicable
"I see nothing negetive at Midwest Airlines to suggest Republic has anything except great intentions for both."---Ask the furloughed pilots at Midwest how they feel about this statement while Republic pilots are flying their routes in Midwest painted E170s...
Not applicable
One thing I must say after reading some of the comments. Why ANONYMOUS what are you afraid of. Southwest Airlines has always been fair with employees and employees they acquire through mergers. As a past trainer for Southwest Airlines they have always kept the very best intentions for the new employees they keep and always have given them more then their fair shake. That occured when Midway went under we were there to give them our full support and until this day we have those employees that did an outstanding job in Chicago. Some have moved up to greater things. Southwest is FAIR!
Not applicable
"Frontier was in bankruptcy...for the SECOND TIME" The fact is that this is F9's first time in bankruptcy. This is not the old Frontier that went out of business years ago, and Republic did not mess up Midwest they messed themselves up. Please get your facts straight. Joey your passion is appreciated on our end but I do have to say that WN is a good company with good employees. We are just as good regardless of what is posted here. This is just business no matter how much blood sweat and tears we have poured into it. We can all only sit back and wait and see what happens and hope for the best.
Not applicable
Tina, Comments like yours are one of the reasons the bashing continues on these blogs. I would be embarassed if I were a WN employee.
Not applicable
"If you keep some Frontier employees they will have to pass a heavy duty interview and training to even get to hold a candle to the kind of people Southwest has" LOL.....Like the WN employee who was texting on their phone and crashed a tug into the employee shuttle.....please teach me!!!!!! Your a Trainer right? "We will need a chisel and hammer to brake through their bad Customer Service habits to turn them to Southwest top notch" If were so bad ...why are we making Money in Denver while WN is losing money in Denver? and don't try saying that's not true because the info was posted in an article in USA Today...6 of your 15 most unprofitable routes are out of Denver...why...Cause Frontier has good people and run a good airline despite First Data forcing us to file bankruptcy.. If your retired..you obviously have no clue wtf your talking about so stfu and show some respect to 5,000 people who will soon be unemployed and think about what you say before you spout off about stuff that doesn't even affect you.
Not applicable
http://www.usatoday.com/travel/flights/item.aspx?type=blog&ak=68496411.blog I believe this is the article you speak of Mr Ramp
Not applicable
F9 Ramp, Do you have information that the rest of us are unaware of? Why are you stating that 5,000 Frontier employees will be looking for a new job? And if you could refrain from using condensed expletives, I'm sure all of the adults reading these posts would greatly appreciate it. We all understand the love that you have for your airline. Unfortunately it will be auctioned this Thursday. If SW is the winning bidder I wish all of those who will join SW welcome and to those who choose not to, best of luck in your endeavors.
Not applicable
The person who suggested that Environmentalist should be upset about Southwest obviously didn’t see the environmental study that came out last week from Green American, a nonprofit membership organization dedicated to creating a socially just and environmentally sustainable society. Southwest Airlines received the best environmental score with a B+. United was among the worst with an F. Frontier was not on the list.
Not applicable
As a family man, I wish all the employees at Frontier the best. I have heard very good things about your airline and hope that you will find a comfortable home with your new employer. I know what it is like to need that paycheck every two weeks. Today, change is the only certainty. Give either buyer a chance. As a loyal LUV customer, I am delighted that you are pursuing this opportunity. If successful, this paves the way toward a major expansion of your product offering and that simply has to be good for me.
Not applicable
Tina- I wish someone at SW management would read your recent blog posting; it was extremely condescending and insulting to the many fine employees who have worked tirelessly at Frontier for the last year, despite making personal and financial sacrifices, yet have managed to keep our planes full and our operations sound. Comments like those only further bad feelings between two possible employee groups; your comments were unkind, smug and unwelcoming. If you typify the kind of "stellar" employees SW apparently has, then we are certainly not impressed.
Not applicable
As a constant traveler and Denver resident I appreciate what both airlines do for the city. Frontier has a hometown feel with great service, clean airplanes, tv, and good pilots. Southwest has low fares to almost anywhere, great service and a no nonsense approach that has worked forever. That being said, let's call a spade a spade: Southwest is bidding for Frontier to eliminate the competition, not to help anyone. As tough as the job market is right now I find it evil that some posting on here really don't care about the employees that live and work here. I read some talking of a Denver base for flight crews if SW does indeed win the auction. That's all good and well, but there are a couple thousand employees that aren't flight crews that work at the headquarters here that stand to lose jobs. I'm already sensing the "too bad" attitude from the Southwesterners here. Think about it for a second if you were in that situation of uncertainty. There's a post I read from a Tina Lopez, who apparently is a retiree from Southwest. "If you keep some Frontier employees they will have to pass a heavy duty interview and training to even get to hold a candle to the kind of people Southwest has. We will need a chisel and hammer to brake through their bad Customer Service habits to turn them to Southwest top notch. They will need the Over the Top Customer Service skills Southwest Employees currently have." I'm sorry Tina but that is arrogrant, mean-spirited, and unbecoming of the folks I've encountered at Southwest. FYI from my experiences with Frontier their Customer Service, Gate Agents, Ticket Sales, Flight Attendants, heck even their Mechanics have been nothing but professional, courteous, and caring about myself and my family, and are just as good, if not better in taking care of their passengers. If your attitude represents Southwest behind closed doors, then I feel sorry for any Frontier employee who may consider making a switch there and they should look for someone else to speak for your airline.
Not applicable
@ Anonymous... Yes, this is the current Frontier's FIRST time in bankruptcy but it was started by ex 1st-Frontier employees. That's my point...this is the SECOND time Frontier has been in bankruptcy. It proves a second time that Frontier doesn't work as it is. If the employees that had started Frontier had learned any lessons from the first go-around with bankruptcy, they didn't put them into practive apparently well enough to ensure avoiding bankruptcy a second time.
Not applicable
I've always thought the world of Southwest as a company and its employees. The fact that some Southwest employees are actually hoping that certain Frontier employees are let go is truly disturbing and disheartening. I've always thought of the Southwest folks as a caring bunch, and the Frontier people as some of the nicest, kindest people I've ever come in contact with. In theory, the two are a great fit. However, it seems like the Southwest employees who have posted above have no compassion for the Frontier folks. As someone who works for an airline who recently got acquired, I can tell you, an acquisition is a very scary time. When the acquiring company's employees aren't helpful, it makes it just that much worse. I just ask that the Southwest employees take their Frontier colleagues under their wing, work with them, and take the best from two of the best airlines in the sky and create an amazing carrier. Thanks.
Not applicable
SkyGuy79- Frontier entered bankruptcy due to a credit card processor withholding half the cash from Frontier until flights were completed. They had cash on hand to continue operations but needed to reorganize, and have even become profitable. It really had nothing to do with the "1st time around" employees it had to do with the recession, out of control oil, and a panicky credit processor.
Not applicable
Anchorage, Alaska media is reporting you are coming to Alaska. Put all the 319s coming up to Anchorage!!! Southwest Effect . GREAAAAT
Not applicable
@xjflightattendant: This Southwest flight attendant hopes that all Frontier employees would get hired here at WN and we could be in a happy, perfect family. Unfortunately, the reality is that this will not happen. Southwest is very picky about who we hire. Its easier to get into an Ivy-league college than SWA. The Interview Team at the People Department is very good at weeding out people and the 4-week training class further weeds out people. That followed by a 6-month "evaluation period" continues with the selection of only the best to remain at Southwest. I was one of about 40 in my interview group. Three of us were selected to attend training. One was let go during training for inappropriate behavior and two of us graduated. The other graduate quit within the first week when she realized the job wasn't for her after all. Here I am, in my fifth year going strong. I am one of the lucky, the blessed, the proud to be here at Southwest Airlines. My wish? Everyone from F9 will be hired at SWA. Hey, I could definitely use the seniority! Reality?: Many won't make it due to poor attitude or they leave of their own accord. I know its not cool, but that's just the way it is. At least Southwest will give them a fair chance to try!
Not applicable
Hmm... "personal and financial sacrifices" Several questions: Has Frontier been making money because of the "personal and financial sacrifices" while in bankruptcy? Is it not true that Southwest has been competing with airlines that have had the benefit of operating under bankruptcy protection? If Southwest could operate under bankruptcy protection, I believe that they would be making money everywhere they fly? Has Southwest asked it's employees to take a cut in pay and benefits to make money or has it been able to operate without government help? So, let's even the playing field and have the Frontier Employees at full pay and see if they make money even with a 90% plus load factor? Which airline has to pay taxes? Has taken care of their employees? Will Republic do the same? Debtor in possession financing? That money was coming from outside Frontier - why ? Because Frontier wasn't making it on it's own. IF it is so profitable, then why all the help - bankruptcy, wage concessions, breaking agreement with Republic? The company is for sale? Better said Auction. That is what it has come down to. It's a very tough industry in a very tough economy. The truth is there... as for those willing to accept it that is another thing... I hope that Southwest does add the Frontier Animals to it's tails. I wish all involved well.
Not applicable
The Frontier employees are going to be SOL.. WN is not going to keep us longer then they have to.
Not applicable
Profiitable?- Yes, employees have been making personal and financial sacrifices. As far as reaping some big benefit, that you imply, i would argue that is not the case, as Frontier continues to pay taxes and bills, as well as incur additional costs due to bankruptcy such as legal, consulting fees etc., which one could argue may offset some wage concessions, so it's not like Frontier has some big advantage. Perhaps the truth you are unwilling to accept is that another airline could compete so well with Southwest. After all, Frontier's planes are pretty full . . . .
Not applicable
Profitable? Ask yourself this question: who had a fuel price hedge that shielded them from millions in losses due to oil speculation? I think you are misguided in your analysis. Frontier is profiting now because of the slimming they did under bankruptcy reorganization. That is the whole point of reorganizing. It's not rocket science really, you cut expenses and try to drive up revenue and hope the judge buys it. I think Frontier has done very well in spite of the presence of Southwest in Denver and being in Chapter 7. Locally it's known that the workforce has made sacrifices to keep the airline running, and considering the potential for a complete loss in employee morale, I am surprised they have managed to still be friendly and professional unlike some other big guys who have dealt with the same, and it's a tribute to the character of the people they hire.
Not applicable
We don't want some of those "passionate" employees over here at Southwest who have been constantly bashing us in the blogs over the past two weeks. That would just ruin the culture over here. We want people who actually want to become Southwest employees rather than considering themselves as Former Frontier employees. Anonymous — Mon, 08/10/2009 - 14:00 ------------------------------------------------------------ People like you ruin your culture. You folks have had some major two year old tantrums of your own on here by the way. Exhibit A: CODESHARING. Don't even start with that that holier than thou attitude because you don't live up.
Not applicable
Paula and Gary Kelly- When will we hear answers to things like what will happen to F9 employees, Lynx, and the In-flight entertainment and dining?? All the big questions still remain unanswered even though you've submitted your bid. Did the bid not address it? Do you guys still not know yourselves or are you just not telling us? Also, the audio on the clip, not through your own fault I'm sure, is really choppy so I just thought I'd let you know. I'd also like to know why people from F9 are receiving such high reprimand on here while nobody is acknowledging the fact that there is a fair amount of rudeness that keeps popping up from your people as well. I'm sure you know what I'm talking about. Anyway, lets hear what is in it for the human beings that work at and travel on Frontier everyday right now, the other cities SW serves outside Denver, and not just what's in it for SW and your current local Denver SW passengers. That'd be really nice and shouldn't be hard if the overall bid is really as great and fantastic as you keep saying it is. Thanks and best regards.
Not applicable
Why does the audio file white out so often so you can only hear bits and pieces?
Not applicable
Fuel hedge. Here we go. Southwest management had the fuel hedge. They protected the company and employees with that hedge and sound planning. They did not need to nor have had to slim down on the backs of their employees. Reap benefits with wage concessions? The costs do go down and look better on paper, but at the expense of the employees. If the planes are so full, then you should be raking in the money and even more with all the fees! But you are still in bankruptcy and up for auction? Not a long term way to compete. Southwest has not done that. It has taken care of it's employees. Could Southwest have laid off employees, asked wage concessions, charging passengers all type of fees? Yeah, it could have, but it didn't. I am not knocking the Frontier employees at all. I respect what they have been able to accomplish despite all the odds. Sometimes, things just don't work out. The airline business isn't a charity. It's a tough industry. You have had a good fight, but have lost. If Southwest wins the bid for Frontier, it's because they have taken care of business and do what they need to do. Frontier management hasn't, as hard as the employees tried. You have done an amazing job in surviving so long. It's time to join another team or move on. Either way, the song is almost over and the fat lady will buy two seats when she travels out of Denver! Good Luck...
Not applicable
Hey Gary - How many ATA employees did you hire when you bought ATA? The answer is less than 5%. I don't believe Southwest is here to help. Frontier - make them hire a certain % of employees and combine the seniority.
Not applicable
Paula- If you succeed in your bid and thus serve Atlanta will that service only be to Denver or will you start serving Atlanta from places like Orlando, Tampa, Nashville, Baltimore as well? Thanks.
Not applicable
Paula, Ron, etc, will Lynx only operate out of Denver or will it be used all over the network and expanded to serve routes that you can't currently do with your mainline aircraft?
Not applicable
Profitable?- Where exactly do you expect any business to cut back on? They can't cut back on fuel, or maintenance, or customer service. All they can do is reduce expenses with the agreement of the unions or sell assets. They sold airplanes, they reduced the payroll. That's all you can do or EVERYONE loses their job at once. Ask the folks who went under on a moment's notice last year. I'm glad SW did fuel hedging but let's face it they got lucky. They didn't know oil was going up to $150 a barrel when they planned it otherwise they would be walking on water and not flying airplanes. You really need to learn a thing or two about bankruptcy reorganization. The planes I've been on are pretty damn full, but let's remember a lot of their revenue is going towards the bankruptcy bills and they are still in business. Please note I am not an employee, I don't know if you read my first post earlier. One thing is clear here in Denver though, if SW succeeds in buying Frontier, it's not a "loss" for Frontier. I fly both Southwest and Frontier and Southwest is by no means "beating" Frontier at anything. They are simply going for the jugular on the wounded animal. I say if SW does succeed at auction, take everyone with you that works at Frontier, great people, good attitude, and pilots who have gone out of their way to make my son feel like a jr pilot. Those are the things worth much more than the bottom line and dominance.
Not applicable
In response to “Paula and Gary Kelly- When will we hear answers to things like what will happen to F9 employees, Lynx, and the In-flight entertainment and dining?? All the big questions still remain unanswered even though you've submitted your bid. Did the bid not address it? Do you guys still not know yourselves or are you just not telling us? Also, the audio on the clip, not through your own fault I'm sure, is really choppy so I just thought I'd let you know. I'd also like to know why people from F9 are receiving such high reprimand on here while nobody is acknowledging the fact that there is a fair amount of rudeness that keeps popping up from your people as well. I'm sure you know what I'm talking about. Anyway, lets hear what is in it for the human beings that work at and travel on Frontier everyday right now, the other cities SW serves outside Denver, and not just what's in it for SW and your current local Denver SW passengers. That'd be really nice and shouldn't be hard if the overall bid is really as great and fantastic as you keep saying it is. Thanks and best regards” ---> I know that there are still so many unanswered questions, and I assure you that as soon as we have answers we will do our best to share that information with all of you here. Although a bid has been submitted, my understanding is that the details will be finalized over the course of the week. That said, the audio from the call today should provide some additional information. I apologize if the sound quality is poor. I will see if that can be fixed tomorrow, although I’m not positive that there is anything we can do about it at this point. As for the rudeness, I agree with you that there has been a fair amount from all sides of this discussion, and I do wish folks would be more courteous to one another. Again, I assure you that as soon as we have more information we will share it here.
Not applicable
I see a lot of speculation and inaccurate information in the posts here. I think the employees of F9 would appreciate the answers that Southwest provided to some very tough questions from the media today at the press conference. http://www.blogsouthwest.com/files/F9BobRonConfCall.mp3 —This is lengthy, but it answers questions that I would want to know if I was an employee of F9.
Not applicable
To Chris B and Mike Simms - Regarding your respective questions about ATL and Lynx, I just don't have those answers for you yet...I'm sorry. I'm hoping we have a clearer picture by Aug 17. I will put those questions on my running list.