Frontier To Buy Planes, Expand Regional Service

September 6, 2006

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US discount carrier Frontier Airlines on Wednesday said it agreed to buy up to 20 Bombardier turboprop aircraft for a new low-cost service and that it plans to expand its existing regional jet fleet.

Frontier said in a statement that it entered into a deal with Canada's Bombardier to buy 10 turboprop aircraft with an option to purchase another 10 for a new service.

In a separate statement, Bombardier said the 10 aircraft are valued at USD$256.8 million, based on list price. The value could rise to USD$520.3 million if the 10 options are exercised, the company said.

Frontier said it intends to operate the 74-seat Q400 turboprop aircraft under a new wholly owned subsidiary that will bring low-cost service to Colorado and the Rocky Mountain region.

The subsidiary, which has not yet been named but will include the Frontier brand, will serve 18 destinations using the new aircraft and create 300 to 400 jobs, Frontier said in a statement.

Frontier also said it will seek bids for up to 20 regional jets to replace or augment its fleet of nine CRJ-700 aircraft in its Frontier JetExpress service, currently operated by Alaska Air Group's Horizon Air.

The company said it will distribute a request for proposal to plane makers within the next 30 days.

The move comes as Frontier deals with increased capacity and competition at its main Denver hub, especially after Southwest Airlines started flights from there earlier this year.

Frontier said the first Q400 aircraft is scheduled for delivery in May 2007. The total fleet of 10 aircraft is scheduled to be in service by December 2007. Deliveries of the option aircraft, if exercised, would begin in March 2008.

The aircraft will be configured with 74 seats with legroom ranging from 31 to 34 inches.

"This aircraft purchase will enable our service to grow by giving Frontier access to regional leisure and business travel destinations," Chief Executive Jeff Potter said in a statement.

(Reuters)