Republic Airways Holdings has been declared the winning bidder in the auction to acquire Frontier Airlines, beating off a late but stiff challenge from...

A big question now is whether Republic’s successful bid for Frontier will be undermined by a potential decision by Southwest to go all-out to grow its network at Denver, Frontier’s main base and hub. After starting service at Denver three years ago, Southwest said recently Denver had been its fastest-growing new destination ever in terms of traffic. United is still by far the largest airline at Denver, with around 50 per cent of the flights and traffic, but Southwest’s vast financial strength and legendary marketing clout could see it quickly ramp up its Denver operation further to put additional pressure on Frontier and United.

“Southwest remains committed to serving the Denver market with our low fares and excellent customer service,” Kelly says. “We began serving Denver in 2006 with just 13 flights and have grown to offer 112 nonstop daily flights today. We are very pleased with the response we have seen to our service and growth in Denver, and we will continue to compete vigorously in the market.”

One factor that could influence the rate at which Southwest might choose to grow its network from Denver is the fact that the low-cost carrier, which for years avoided congested airports in various major U.S. cities (particularly those on the East Coast), has changed its business model within the last two years in recognition that it has become as much of a business-travel airline as a leisure-traffic carrier.

For this reason, and also because Southwest was reaching the limits of natural growth on its all-domestic-service network outside the large, congested U.S. hub airports, this year the Dallas airline is adding major airports such as Minneapolis/St. Paul, New York LaGuardia, Boston Logan and Milwaukee’s General Mitchell International Airport to its network.

Other large airports could follow in subsequent years; and Southwest’s growing dominance as the largest U.S. domestic airline in terms of numbers of passengers carried may well make it desirable for Southwest to add service in the next few years from Denver to major, congested airports in other large U.S. cities, in competition with United and ― potentially importantly for Republic Airways ― with Frontier Airlines.

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