Frontier Airlines announced on Thursday evening that Republic Airways Holdings won the auction for the Denver-based airline and not rival Southwest Airlines.

Frontier went up for auction on Thursday as part of its Chapter 11 bankruptcy proceedings.

"Republic submitted the highest and best bid," according to a release from Frontier. "This plan provides for Frontier and Lynx to maintain normal operations as a subsidiary of Republic."

"It's business as usual at Frontier, go ahead and book your travel for fall, winter, into next summer, we're going to be here," Frontier spokesman Steve Snyder said.

Monday, Dallas-based Southwest submitted a bid of more than $170 million for Frontier's bankruptcy holdings. That vastly topped Republic's earlier offer of $108 million.

Frontier said that Republic's bid of $108 million was the winner, because "Republic also agreed to waive distributions on its $150 million prepetition unsecured claim, which is expected to result in a 94 percent increase in the distribution to Frontier's general unsecured creditors."

The result came because Southwest Airlines yanked its bid on Thursday over disagreements between the pilots' unions.

Thursday, it surfaced that the pilot unions at Frontier and Southwest had hit an impasse in talks to merge the two groups, throwing Southwest's bid for Frontier into question.

Southwest's $170 million offer was contingent on a seniority-integration agreement between the Southwest Airlines Pilots Association and the Frontier Pilots Association.

On its Web site, Southwest said it was not selected because it was not willing to remove the need for the two unions to reach an agreement. Southwest says "its Culture and relationships with its Employees are too important to compromise."

"We said all along that we would only move forward on this deal if it proved to be the right decision for our Employees and financially prudent for our Company," said Gary Kelly, Southwest's chairman of the board, president, and CEO in the news release. "We have a mission to preserve and protect our Culture and the best interests of our Employees, Customers, and Shareholders. This was a great opportunity that required us to act fast. A lot of people worked very hard with every intention of making this work. We were fortunate to be in a position to examine the acquisition to see if it was the right decision for Southwest Airlines. We chose not to amend our bid to remove the labor requirement, a key reason our bid was not selected."

Gov. Bill Ritter (D-Colorado) was happy at the news that Frontier will not be absorbed by another airline.

"We're delighted that Republic has been successful in this negotiated bid and that at the end of the day, we're gonna keep a hometown airline," Ritter said. "This is a path forward for them with an airline that's gonna allow them to remain here."

Ritter says he is happy that many of the Frontier jobs are expected to remain in Colorado.

"We just think this is a win, win, win," he said. "All the way around for us, it's good news."

Frontier is now primed to become a wholly-owned subsidiary of Republic, which also owns Chautauqua Airlines, Midwest Airlines, Mokulele Airlines, Republic Airlines and Shuttle America.

"I look forward to welcoming Frontier to our Republic family," said Bryan Bedford, chairman, president and CEO of Republic in a news release. "Frontier has made impressive strides in returning to sustained profitability in a challenging and uncertain economic environment. We congratulate the employees of Frontier. Their commitment and perseverance during the bankruptcy process has allowed the Frontier brand to survive and thrive."

"We appreciate the participation of both Republic and Southwest Airlines in our auction process," said Frontier President and Chief Executive Officer Sean Menke in a news release. "We are pleased to have Republic as a plan sponsor that will allow Frontier to emerge from bankruptcy as a well-financed, competitive and sustainable airline. This plan provides for Frontier and Lynx to maintain normal operations as a subsidiary of Republic, with further capital and growth opportunities in the future. This is also great news because it is expected to preserve the jobs of most Frontier employees, who have worked tirelessly to further build our unique brand and deliver outstanding service to our customers. I would be remiss if I didn't mention my 5,000 plus team members. Today's announcement is the beginning of a wonderful new chapter for this proud organization and would not have happened without the hard work, dedication and sacrifice of them all."

It is unclear what, if any, staffing changes could be made at Frontier under the new ownership.

The U.S. Department of Justice must still approve Republic's acquisition, a process that could take four to six months.

Frontier and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008. More information about Frontier's Chapter 11 proceedings is available at FrontierAirlines.com/restructure. Court filings and claims information are available at frontier-restructuring.com.

Article and Photo Courtesy of 9 News