Spirit And Frontier Airlines Merge to Create an Ultra-Low-Cost Competitor

Spirit And Frontier Airlines Merge to Create an Ultra-Low-Cost Competitor

Spirit and Frontier will merge to create a solid ultra-low-cost airline, according to a joint statement released by both carriers on Monday, Feb. 7.

In the $6.6 billion transaction, Frontier Airlines stockholders would own around 51.5 percent of the merged carrier, while Spirit‘s will own approximately 45.8%.

If approved, it will become the fifth-largest airline in the United States, after American, Delta, Southwest, and United.

“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,” said Spirit chief executive Ted Christie in a statement.

spirit airline airplane

Thus far, neither company has confirmed whether Frontier and Spirit would retain separate brands, merge under one of the current brands, or combine under a new carrier.

Spirit CEO Ted Christie said on CNBC that the combined company’s name and headquarters location will be unveiled “in due time.”

The “new airline” would fly to over 145 destinations in 19 countries, with more 600 nonstop routes and 1,000 daily flights throughout the US, Latin America, and the Caribbean, according to the CEO.

“The combined airline will also have the ability to succeed in cities our companies have previously exited such as Jackson, Mississippi, as well as expand into new small cities like Eugene, Oregon,” Christie said.

The agreement would allow the combined airline to grow faster and “compete even more aggressively, especially against the dominant ‘Big Four’ airlines.”

frontier airplanes

“Our all-in costs for the consumer is the lowest of any airline in the United States, at $108 on average. The big four airlines charge over 80% more than us,” Christie said during the investor briefing. 

“When you combine this with the fact of our greater scale and our low fares, we’ll become an even better option for consumers.”

Wall Street reacted somehow positively to the news, with Spirit’s stock rising more than 11% to $24.33 in pre-market activity Monday, while Frontier Group, the parent company of Frontier Airlines, fell 2.3 percent to $12.10.