With 2 deals, Republic Airways grows into big airline
— -- Even Republic Airways CEO Bryan Bedford hasn't thought of his company as a real airline — until now.
"We're a contractor, working for all the major airlines," Bedford says.
But that's changing quickly because of two big deals: On July 13, a federal bankruptcy judge approved Republic's takeover of Frontier Airlines for $108.8 million unless it is outbid. And last month, Republic agreed to pay $6 million to acquire Milwaukee-based Midwest Airlines.
The deals move Republic from the ranks of regional contractor to big airline. Republic will operate Midwest and Frontier under their respective names and on their routes to a combined 56 cities across the country initially.
"The good news is that Republic is buying Midwest and, to a lesser degree, Frontier on the cheap," says Vaughn Cordle, an analyst at AirlineForecasts. "The bad news is that AirTran, Southwest, United and the others are going to gang up on them."
Protecting its investment
Bedford justifies the deals by saying they make Republic less dependent on its five big, conventional airline partners.
"The foundation of our business model is revenue diversity," he says. "If we can draw revenue from a wide variety of sources, regardless what the broader industry conditions are, we'll likely do better."
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