Spirit Airlines Incorporated (NYSE:SAVE) and Frontier Group Holdings Inc (NASDAQ:ULCC) have announced a $6.6 billion merger to create one of the largest low-cost airlines in the U.S. The new airline is set to bring more low fares to more travelers in more destinations in the United States, Latin America, and the Caribbean.
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Spirit And Frontier Merger
As reported by CNN, Spirit Airlines and Frontier Airlines have announced they will merge to create a low-cost carrier with a stronger financial profile. The move will allow the new company to accelerate investment in innovation and growth and compete even more aggressively —especially against the dominant airlines.
“The merged carrier would leapfrog JetBlue (JBLU) and Alaska Air (ALK) in the number of miles flown by paying passengers, according to 2021 statistics,” as informed by the media outlet.
This would put it right behind the four major airlines that dominate around 80% of the U.S. air traffic —American Airlines Group Inc (NASDAQ:AAL), Delta Air Lines Inc (NYSE:DAL), United Airlines Holdings Inc (NASDAQ:UAL) and Southwest Airlines Co (NYSE:LUV).
William A. Franke, chairman of the board of directors of Frontier and managing partner of Indigo Partners, Frontier's majority shareholder, said: "We are working together with the Board of Directors and the senior management team of both airlines to come up with a combination of two complementary businesses that together will create America's most competitive ultra-low fare airline for the benefit of consumers."
Ted Christie, president and CEO of Spirit said: “We are thrilled to join forces with Frontier to further democratize air travel.”
Expected Success
Christie added that the company is looking forward to joining talented staff to revolutionize the airline industry.
Mac Gardner, chairman of Spirit's board of directors also added: “We are a perfect fit –our companies share similar values, including our long-standing commitment to affordable travel.”
“At the same time, we have complementary fleets, including one of the youngest and greenest fleets in the world. Together, we will be even more competitive for our travelers and our team members, and we are confident that we can deliver the benefits of this merger to consumers."
The merged airline is expected to deliver $1 billion in annual savings for consumers and offer more than 1,000 daily flights to more than 145 destinations in 19 countries, through complementary networks.
