Spirit and Frontier agree merger to create mega budget airline

Spirit and Frontier agree merger to create mega budget airline | Secret Flying

Spirit and Frontier agree merger.

 

Spirit Airlines and Frontier AirlinesΒ have announced they’re planning to merge to create what they call the country’s “most competitive ultra-low fare” airline.

 

In a joint press release on Monday, the carriers said the merger would create a giant in the low-budget airfare market, creating the fifth largest US airline by market share.

 

According to reports,Β the companies’ boards of directors had unanimously approved the $6.6 billion transaction and expect it to close in the second half of this year.

 

The two discount carriers say that by combining, they’ll be able to offer travellers even better deals and more reliable service, with about 1,000 daily flights to nearly 150 destinations in 19 countries.

 

They also expect the merger to directly add 10,000 jobs by 2026.

 

“Everybody wins through this transaction” said Frontier CEO Barry Biffle in an interview on CNBC Monday morning.

 

“Consumers are going to win with a billion dollars in savings, our shareholders win with $500 million in synergies, and our team members win with 10,000 more direct jobs in the next couple years.”

 

Mac Gardner, chairman of Spirit’s board of directors, also spoke highly of the merger, telling reporters: “We’re a perfect fit β€” our businesses share similar values, including our longstanding commitment to affordable travel.

 

“At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets worldwide.”

 

However,Β some consumer advocates criticised the merger, warning that an end to competition between the two airlines will result in higher prices.

 

William J. McGee, Consumer Reports’ adviser on airline issues,Β says past airline mergers have often resulted in fewer flights to some cities, higher fares, and poorer customer service.

 

“As we’ve seen, consolidation has not been good for consumers and it’s only reduced their choices,” he said.

 

The Justice Department will decide on whether the proposed merger can go ahead, which under the Biden Administration has taken a tough stance against some recent corporate consolidations.

 

Last year, the DOJ filed an antitrust lawsuit against a proposed partnership between JetBlue and American Airlines.

 

If the Spirit Frontier deal receives anti-trust approval, a committee chaired by Bill Franke, Frontier’s managing director, will determine the new carrier’s name and headquarters.