Court OKs Texas Air’s Offer for Frontier Airlines’ Assets

A federal bankruptcy court judge on Friday approved a $158-million offer from Continental Airlines’ parent firm, Texas Air Corp., to purchase the assets of Frontier Airlines and put its planes in the sky by Nov. 1.

The court ruling gave Continental access to Frontier’s fleet of between 20 and 45 Boeing 737s and McDonnell Douglas MD-80s on Saturday, said Continental spokesman Bruce Hicks.

“It allows us to begin getting aircraft ready to start flying Nov. 1, pending final Department of Transportation approval,” he said.

“It’s a great day for Continental, for former Frontier employees and for the flying public,” Hicks said. By Jan. 1, Continental will serve 17 cities formerly served by Frontier, he said.

Second Group of Bidders

Texas Air’s proposal was challenged during the hearing Friday by another group of investors who said they wanted to buy Frontier.

That group was headed by investor Thomas Saulter, an accountant from Midland, Tex. He said the backers, several Texas and Oklahoma businessmen, had no experience in airline management and would need six months to get federal approval to put the planes back into service.

Frontier’s attorneys, angered by the Saulter group’s offer, said Frontier wanted the planes back in the air by Nov. 15 at latest. They said the airline’s creditors are losing $376,000 each day the carrier remains grounded.

After the lunch break, the Saulter group told Judge Charles Matheson that it could not come up with the necessary money and withdrew its offer.

Employees Approved Offer

The reorganization hearing began Friday, one day after Continental announced that 88% of Frontier’s union workers had approved a job-guarantee offer, paving the way to a Continental takeover that could give work to more than 4,000 Frontier employees.

More than half of the former Frontier employees said, however, that they wanted severance pay rather than a job with Continental.

Approval of the job-guarantee offer was a major condition of a Texas Air Corp. plan to acquire People Express Inc., the parent company of Frontier.

Members of Frontier’s four unions voted on the job-guarantee offer this month and last. Continental said the offer was approved by 97.1% of Frontier’s pilots, 95.1% of the flight attendants, 84.3% of the agents and clerical employees and 77.1% of the dispatchers.