Frontier Airlines Shuts its doors after 40 years of service.
August 24, Frontier closed its doors. By the 1960's airlines where heavily competing for dominance in the passenger market. Many of the airlines where developing incentives that would lore passenger to their carrier. By 1963, Frontier Airlines initiated several passenger saving plans that resulted in the companies gross earnings improving by 25 percent.
By the mid 60's the airline was providing air travel to over a half a million passengers. Its aircraft fleet had grown from the old DC-3 to Convair 580 and then to the Boeing 727. Frontier merged with Central Airlines which allow the company to assume routes in the Midwest and the southwest.
With the expansion into other routes, it became much more difficult for Frontier to hold its front from larger carriers who had initiated price was against the carrier. By the mid 1970's Frontier had acquired routes in Canada and Mexico and continued to expand its fleet of aircraft which now included the Boeing 737 and it continued to make record profits. However, by the early 1980's Frontier began to experience unforeseen financial difficulties as a result of a depressed economy and high cost of aviation fuel.
Many economist blamed the sump in the market was due Airport and Airway Development Act of 1970. Which brought about landing fees, aviation fuel tax, runway fees and passenger tax. Frontier Airlines was now reporting record loses and was having great difficulties in keeping its front doors open. Frontier Airline's board of directors had approved a plan that would allow its employees to purchase over 200 million dollars of Frontier stock at 17 dollars a share. However, Frank Lorenzo was willing to pay more for each share of Frontier company stock. However, this angered Frontier employees as they were aware of Lorenzo reputation.
People Airlines stepped in and made an offer to purchase company stock at 24 dollars a share. With great hesitance, Frontier's board approved the sale with People Express Airlines. However, by the mid 80's Frontier Airlines was unable to improve its fiscal matters. In the summer of 1986 Frontier representatives entered into talks with representatives of United Airlines to sell off Frontiers holdings. However, talks broke down when United employees learned how Frontier employees would be absorbed by United. After talks broke down with United Airlines, Frontier was unable to identify an appropriate buyer and was forced to file bankruptcy and close it doors. Upon Frontiers closing its door, Continental Airlines stepped in and purchased Frontiers holdings and began flying its routes.
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