Two airlines from the United States have reached an agreement where the Frontier Group, from Frontier Airlines, will pay US$ 2,9 billion for the “competitor” Spirit Airlines. The two airlines are expected to merge their low-cost operations to optimize operations.
Once the deal is completed, the merger will create the 5th largest airline in the United States, with 286 A320neo family aircraft and orders for a further 400 new aircraft to be delivered over the next few years. The airline will only be smaller than American, Delta, United and Southwest.
The business will be controlled by Frontier, which plans to hire 10 people by 2026, adding that they hope to deliver $1 billion in annual consumer savings and offer more than 1000 daily flights to more than 145 destinations.
As we mentioned earlier, the deal is a merger, where Frontier will have a 51,5% share in the group generated by the two airlines, even with a smaller number of aircraft in the fleet and routes in operation. Spirit Airlines will receive US$ 2,9 billion for the merger, and will have a 48,5% stake in the business.
On a combined basis, the resulting company has the ability to earn at least $5,3 billion in annual revenue, based on 2021 results.
On the blog, @FlyFrontier and @SpiritAirlines unveiled plans to merge today. They released a combined network destination map: https://t.co/cSmydxrS6k pic.twitter.com/ShyW34HRTO
— Airline Maps (@airlinemaps) February 7, 2022
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The two airlines operate in the Ultra Low Cost segment, with very low cost Ryanair-style tickets. Other airlines, such as Southwest, offer greater in-flight amenities and higher prices compared to Frontier and Spirit.
The two companies led the ultra low cost airline industry in the United States.
Frontier Airlines is directly owned by IndiGo Partners, which owns interests in Low Cost airlines from other countries. JetSmart, Volaris and Wizz Air also belong to the IndiGo Partners group. For this reason, the American William Franke, President of IndiGo Partners, will lead the merged airline.
The merger is expected to close in the second half of 2022, subject to approval of customary closing conditions, including completion of the regulatory review process and Spirit shareholder approval.
