Frontier sees bidding war on Delta-US Air assets

WASHINGTON (Reuters) - Discount carrier Frontier Airlines FRNT.O sees a bidding war over assets that are expected to be put up for sale if an $8.6 billion US Airways Group Inc. (LCC.N: Quote, Profile, Research, Stock Buzz) offer for Delta Air Lines Inc. DALRQ.PK goes through, a top Frontier executive said on Wednesday.

A merger between Delta and US Airways is expected to result in sale of assets such as airport gates and aircraft for a merged airline to be able to get over antitrust hurdles.

Denver-based Frontier would look at any assets that are put up for sale, especially in West Coast cities such as Los Angeles, Chief Financial Officer Paul Tate told the Reuters Aerospace and Defense Summit in Washington, D.C.

"If there are assets anywhere in the U.S. that make some sense for us to look at, we will definitely look at those opportunities," Tate said. "We know that others would be looking at those opportunities as well, so it becomes a bidding war."

At the summit earlier on Wednesday, low-cost carrier Southwest Airlines (LUV.N: Quote, Profile, Research, Stock Buzz) also expressed an interest in any assets that are put on sale as a result of a merger between US Airways and Delta.

"We certainly would be interested in anything that goes on in Los Angeles," Tate said. "Whether we would scoop up or actually do more than window shopping, it's very speculative at this point."

Mergers in the airline industry are notoriously difficult to complete because of issues such as integrating labor forces and fleet types, and Tate said the likelihood of a Delta-US Airways merger going through was less than half.

"Mega-mergers are very difficult to do in our business," Tate said. "If I had to weigh probability, I would say it is well less than 50 percent that he (US Airways CEO Doug Parker) will be able to jump over all those hurdles that he has to."