Budget Airlines Spirit and Frontier Plan Merger

Over the years, the airline industry has seen several mergers and acquisitions, leading to a current “Big Four” domestic airlines. At the same time, various challengers with different business plans have given flyers a variety of options. In particular, airlines such as Frontier and Spirit have cornered the budget market by unbundling the flying experience and allowing passengers to choose what amenities they want to pay for. Now, these two airlines are coming together to better compete.

Today, budget airlines Spirit and Frontier announced plans to merge, creating “America’s most competitive ultra-low fare airline.” At this time, leadership or a corporate name for the combined airline have not been revealed. However, the deal is expected to close in the second half of this year.

Currently, Spirit and Frontier rank as the seventh and eighth-largest domestic airlines respectively. However, the combined company would rank fifth behind American, Delta, United, and Southwest, while hopping over JetBlue and Alaska. According to the merger plans, combining Spirit and Frontier will save consumers $1 billion annually. The combined airline also plans to expand its fleet with more than 350 aircrafts on order and will fly more than 1,000 flights daily, serving 145 destinations in 19 countries.

Commenting on the deal, Spirit president and CEO Ted Christie stated, “We are thrilled to join forces with Frontier to further democratize air travel. This transaction is centered around creating an aggressive ultra-low fare competitor to serve our Guests even better, expand career opportunities for our Team Members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public.”

Christie added, “We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent Guest service.”

Frontier president and CEO Barry Biffle highlighted another aspect of the merger, noting, “Together, Frontier and Spirit will be America’s Greenest Airline and deliver more ultra-low fares to more people in more places.”

While there are still several unknowns in regards to the Frontier and Spirit merger, it’s likely to be a mix of good and bad news for passengers — with the deal impacting certain markets more than others. For example, in cities where both airlines currently fly, customers will have fewer carrier options (although the combined airline may retain a similar schedule).

Meanwhile, those with credit cards for either airline may also see changes that may or may not be to their liking. Of course, with the deal expected to close in just a few months, we may not have to wait too long to see what changes the new fifth-largest domestic airline will make.


Also published on Medium.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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