DENVER - Southwest Airlines is primed to take over Frontier Airlines in an auction that starts later this week after Southwest confirmed on Monday it had put in a bid for more than $170 million for the Denver-based airline.

The auction of Frontier's bankruptcy law firm in New York was initially set to start on Tuesday between Southwest and Republic Airways Holdings, but it has now been moved to Thursday. The auction could end by Friday.

Republic had made a $108.7 million offer to buy Frontier and its subsidiary, Lynx Aviation. Southwest, a rival of Frontier's at Denver International Airport, had said it was willing to offer $113.6 million.

Monday, Southwest says that initial $113 million bid was just a way to get the company's "foot in the door" and it is actually offering more than $170 million for Frontier. The official bid was made on Monday.

Southwest says if it wins the auction, it plans to keep about 80 percent of Frontier's fleet, but the names on the planes will change fairly quickly.

"If Southwest buys it, it will mean Southwest is getting rid of its number one competitor. Frontier has basically beaten Southwest silly. Both are good airlines, but if Southwest buys it we're going to see Southwest merge it into its own operation," aviation expert Mike Boyd said.

After this week's auction, Southwest says it will be four to six months before Southwest actually takes control of Frontier because the deal must still be finalized by the U.S. Department of Justice.

Southwest says it will transition Frontier's fleet of Air Buses to their 737s over a longer period of time as leases expire.

Southwest's bid, which is around $60 million more than Republic's, is no guarantee it will win. Bidding in the auction begins at Southwest's offer and goes up in $1 million increments. The auction can continue until Aug. 17.

"Frontier Airlines is up for sale in bankruptcy and that creates a lot of uncertainty, and a lot of nervousness, and it would be very surprising if Frontier employees didn't have a lot of questions," Southwest Executive Vice President Ron Ricks said.

It is unclear how many employees could be let go after Frontier is taken over by another company. There are also no details on what happens to those who hold things like Frontier Airlines credit cards.

"That creates a need for people. We don't know the exact number today - we can't predict that, but we do know that we're talking about a lot of Frontier employees that we hope to turn into loyal happy Southwest employees," Ricks said.

Frontier Chief Executive Sean Menke outlined the process for the Denver-based airline's employees in an e-mail sent late last week:

"I am sure many of you want an answer sooner rather than later," Menke's e-mail said, "but those of you who know me well I will be very meticulous in listening and analyzing the options put before us."

Menke said he was proud of what the Frontier employees have accomplished since the airline filed for bankruptcy protection in April 2008.

"To put it simply: we were written off," Menke said. "Fortunately, we are some pretty thick-skinned and damned determined individuals."

Because of the hard work, "we now have two enviable organizations, Republic and Southwest, vying to own our company. The leaders of both of these organizations have been complimentary to us, the team members

Article Courtesy of 9 News