Republic Airways to Buy Up to 80 Bombardier Jets for Frontier Airlines and Midwest Airlines

Republic Airways Holdings Inc. said Thursday it plans to buy as many as 80 new Bombardier jets.


Frontier

Indianapolis-based Republic said it intends to buy 40 Bombardier CS300 regional jets with a value of $3.06 billion to replace planes in its existing fleet and has options to buy up to 40 more.

With the deal, Republic becomes the first commercial airline to commit to the planes by Montreal-based Bombardier, which are expected to be more fuel efficient and have wider passenger aisles than planes now used by Frontier and sister Republic-owned carrier Midwest Airlines.

In addition, each will jet have five rows of seats with additional legroom that can be sold for higher costs and bring in increasingly important ancillary revenue to the company.

Delivery of the 138-seat jets is set to begin in mid-2015, Republic CEO Bryan Bedford said in a conference call with analysts to discuss the company’s latest earnings report.

Bedford declined to say what the purchase of the new planes cost Republic or whether Republic got credit or other incentives from Bombardier to launch the new plane line. He did say that the “game-changing technology” involved in the jets will position Republic for increased success in the future, however.

“The way this [deal] is structured, it’s cash-friendly to us over the next two to three years. It does not put a cash squeeze on us,” Bedford said.

Bedford also did not say how the new planes will be incorporated into Republic’s current fleet of 290 aircraft. Leases on the vast majority of Frontier’s fleet are up between 2013 and 2017, but Republic already has committed to deals to purchase a number of Airbus plans in 2013 and 2014, Bedford said.

If [the CS300] does the things they represent it will do … then we’re going to have some great flexibility in our fleet in 2015,” Bedford said.