DENVER -- Denver’s hometown airline may no longer be hometown. That is the scenario the city and state are trying to avoid with their work to offer an incentive package to the new owners of Frontier Airlines, Republic Airways.

"Jobs matter and in a down economy every job matters,” said Tom Clark, Executive Vice-President of the Metro Denver Economic Development Corporation.

Clark is one of many officials currently putting together an incentive package to offer to Republic. 7News asked how far the city and state are willing to go to keep Frontier in town.

“I can’t tell you how far we’re willing to go but we do have a strategy and we’re pursuing that,” Clark said.

Republic will soon take over Frontier after winning a bid in Federal Bankruptcy court. The company also recently acquired Milwaukee based Midwest Airlines. The scenario that will soon unfold is what Denver officials are fighting for.

"What's in play is does Republic's headquarters stay in Indianapolis or do you have separate headquarters for Midwest in Milwaukee and Frontier here in Denver,” said Clark. “Or do you somehow have a consolidation.”

Clark said if a consolidation does take place, the city is trying to convince Republic to not only keep Frontier’s base in Denver but also bring other critical parts of the airlines, like maintenance facilities and reservation centers, to town.

A major roadblock in the talks going on right now appears to be a costly tax airlines that service Denver International Airport have to pay. Denver officials won’t say what they’re willing to do about that tax, but do recognize the importance in creating an attractive package for Republic.

"We're making an aggressive effort to make certain Frontier's Headquarters stays and additional jobs get attracted,” Clark said.

Frontier currently employs more than 4,000 people in Denver and the airline is one of the top 10 employers in the city.

A final decision on the headquarters situation should be known by October.