What is Republic's Strategy?

It used to be relatively simple being a regional carrier. With few exceptions, you never had to operate a single flight under your own name. You just had to focus on running a good operation for your big brother partner. Republic clearly has decided that the model it grew up on isn’t going to work, and now it’s really stepped out with its acquisition of Frontier.

We should have seen the signs coming. Republic has been dipping its toes into the big boy airline market for a long time. It first went away from the traditional model during the US Airways bankruptcy. Republic invested a bunch of money to help bring the airline back out and to find a place to put a bunch of its airplanes. It was no longer at the whim of the larger carriers for which it worked. It was trying to call the shots.

But that was just the beginning. Republic began dabbling with Midwest as well. Now, Republic may very well end up being the sole operator of flights for Midwest as the parent reportedly considers stopping its in-house operation completely.

But in both those situations, Republic was still behind the scenes as an operator and investor. That was not the case with the Mokulele deal. Little Mokulele in Hawai’i decided it wanted to fill in some of the capacity that disappeared when Aloha went bust. Republic stepped in to provide the aircraft and financing, but Mokulele blew the money and Republic took them over. This was the first time that Republic had to step into the marketing side of the house, even if it was under another brand name.

Now, Republic has bought Frontier. Presumably, Frontier will continue to run independently with its team in Denver, but I wouldn’t be surprised to see some influence being exerted, especially on fleet decisions. Republic flew for Frontier before, and I bet we see it happen again.

This pattern makes it seem that Republic isn’t happy with being behind the scenes any longer. It wants to control its revenues, and it’s getting into the game in a big way. Exactly how they’ll flex their muscle on the management side of the house still remains to be seen.

Update on 6/22 @1p - Republic has just announced that it will be buying Midwest outright. It is effectively only buying a brand because it has announced it will ditch the 717s. Let the speculation on a Frontier/Midwest merger begin . . .