When a company's chairman and chief executive officer depart simultaneously, a major change in direction and strategy often follow.
So it's no surprise that industry observers are now speculating about what's next for Frontier Airlines, with some wondering if the company is preparing itself for a merger or acquisition.
Within the past week, Frontier's co-founder and chairman, Sam Addoms, announced he is retiring, and the company's president and CEO, Jeff Potter, said he will step down to take a job outside the industry.
Both insist they made the decision to leave on their own and separately of each other. Addoms wants to spend more time in his community, while Potter was offered an opportunity he said was too good to pass up.
Frontier officials say the company will continue on its present course, adding that the departures are coincidental.
"The strategic direction has been set, and the executive team and the board back that," Frontier spokesman Joe Hodas said. "There will be no changes."
But the timing is hard to overlook. At the very least the events create some uncertainty surrounding Frontier, which is entering a critical period in its history as it diversifies into new types of markets.
"If we had a company where both the CEO and the president resign, we'd question what's going on, not only at the company but also in the boardroom," said Bruce G. Allen, who heads his own investment firm in Denver. "My first reaction, having done this for 22 years, is that this does raise some questions."
The departures on their own are enough to lift eyebrows. Both Addoms and Potter will leave Sept. 6 after the company's annual shareholders meeting.
But Frontier also has struggled financially and is languishing on Wall Street, in part because of heavy competition in Denver from Southwest Airlines and United Airlines. Frontier's cash reserves also aren't as strong as they once were.
"Perhaps all of this means that Frontier is to be recast in a different form," said George Hamlin, a managing director at aviation consulting firm Airline Capital Associates. "It's hard to tell at this point."
The picture might become a bit clearer once the succession question is answered.
Frontier's board is searching for a new CEO, and the company expects to name Potter's replacement by the time he leaves.
Some observers doubt that Frontier is preparing for any type of merger or acquisition, saying there aren't any matchups that make sense.
"There are no realistic possibilities right now or in the near term," said Scott Hamilton, an aviation consultant at Leeham Co. "Certainly in the near term I don't see anything like that happening. Frontier has to find its own way."
Wayne G. Nielsen, who runs a Denver investment bank, also said it's unlikely Frontier is looking to sell itself, saying it would probably try hard to keep Addoms and Potter aboard to navigate through a sale. He said it's possible the board might want to change direction or bring in new blood.
"The board might just want to do things that are different than what Potter and Addoms did, but at this point who knows?" Nielsen said.
Of course, there may be nothing more to it all than coincidence. In many cases, airline executives can find higher-paying jobs - and better opportunities - in other sectors. During Frontier's last fiscal year, which ended March 31, Potter received a compensation package worth $622,829.
Potter is keeping a lid on where he's going until next week. But observers say he likely can take home a bigger paycheck in another industry.
"My initial reaction is that his compensation does seem low," said David Leach, managing director at ECG Advisors. "It sounds a bit light."
INFOBOX
On Potter's watch, Frontier:
* Entered and then expanded into nearby international markets, which have become a key piece of the company's business.
* Weathered the arrival of Southwest Airlines in Denver, although the competition has hurt Frontier financially, and the long-term impact remains to be seen.
* Posted annual losses in all but one year.
* Saw its share price fall from $17 to $5.22, a 70 percent decline, steeper than the drop in the Amex airline index.
* Set a course to boost regional flying into smaller cities and towns where there is little or no competition.
* Created a subsidiary that soon will begin flying turboprop planes into nearby markets, further sheltering Frontier from low-cost competition.
* Grew at a breakneck pace, adding several thousand employees and dozens of routes and markets.
* Began flying from U.S. cities to Mexican resort destinations without a stopover in Denver.
* Tried - and failed - twice to offer flights from Los Angeles to other U.S. cities without routing passengers through Denver.
