Perseus, a Washington D.C. firm, agreed to loan Frontier $75 million to keep the airline running. If the company meets certain performance criteria, Perseus will purchase 79.9 percent of the airline's equity for $100 million when the company emerges from Chapter 11 bankruptcy protection, the Rocky Mountain News reported.

The deal must be approved in federal bankruptcy court, the News said.

If approved, the odds of the airline's survival increase dramatically, analysts said.

"I'd put the odds that they will survive at 75 percent to 80 percent," Anthony Sabino, a law professor at St. John's University in New York told the News. "Clearly, Perseus has determined that this is the time to buy Frontier, that this is as cheap as it's going to get, that it's a good investment," Sabino said.

Frontier called the deal a "significant vote of confidence" in its business.

"Despite the current challenges facing the airline industry, these transactions help point the way towards Frontier's emergence from bankruptcy as a competitive, sustainable airline," Frontier's Chief Executive Officer Sean Menke said in a statement.