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Frontier cutting routes

Associated Press The Spokesman-Review

DENVER – Frontier Airlines Holdings Inc. took one of its first significant steps to restructure operations Wednesday, ending a regional jet pact with Republic Airways and announcing plans to eliminate service to five cities.

The Denver-based airline, which serves Spokane, also said it will not start service, as planned, to Missoula.

The announcement, which was made by both airlines, comes as Denver-based Frontier reorganizes under a Chapter 11 petition in U.S. Bankruptcy Court.

It represents a shift away from a business strategy to move into small and midsized markets that were underserved by larger carriers.

Frontier put it into place in January 2007 when it signed the 11-year agreement with Republic Airways Holdings Inc.

“Unfortunately, with current economic conditions and other business changes, we have been forced to drastically rethink the use of regional aircraft in our flight mix,” Frontier Chief Executive Officer Sean Menke said in a statement.

Frontier will eliminate 12 Republic-owned 76-seat jets from daily operations by mid-June. Service will end by June 1 to Sioux City, Iowa, Jacksonville, Fla., Little Rock, Ark., Memphis, Tenn., and Tulsa, Okla.

Passengers who may be affected by the schedule changes will receive refunds or the option for an alternate flight, Frontier said.

Indianapolis-based Republic, which operated the jets under Frontier’s brand, said the agreement generated about $6 million a month in revenue. Frontier paid some operational costs such as landing fees and fuel.

Republic’s initial contract was for 11 years with a Frontier option to extend it for an additional six years.

Financial terms were not disclosed.

Frontier had planned to take on an additional five regional jets during the second half of this year. Republic said it will try to place the jets with other partners or sell them.

Republic also will file a $260 million damage claim because of the early termination of the agreement, although it said the bankruptcy court will decide how much it will be able to recover.