Frontier and Spirit on Monday 7 February announced plans to combine operations and fly as a single company.
Monday’s announcement gave few details on the consumer-facing make-up of the new airline, including whether Frontier and Spirit will continue to exist as separate brands, combine under one of the existing brands or combine under a new airline. Spirit CEO Ted Christie said in an appearance on CNBC Monday morning that the combined company’s name and headquarters location will be revealed “in due time.”
Frontier and its private equity firm parent company Indigo Partners are expected to take a leading role in the company’s management. The airlines said that Frontier equity holders will own roughly 51.5% of the combined airline, while Spirit will own 48.5% after closing.
Impact on prices and consumers
Both airlines framed the merger as a win for everyone affected, including customers.
“I’m confident that today’s announcement will change the industry for the benefit of consumers, shareholders, as well as the team members for both Spirit and Frontier,” Bill Franke, chairman of Frontier’s board and managing partner of Indigo Partners, said during an investor presentation on Monday.
“This transaction will take us from the event and eighth-largest airlines in the United States by [available seat miles] to fifth, enabling us to be a more effective alternative against the ‘big four,’ among others,” Christie said during the presentation.
“When you combine this with the fact of our greater scale and our low fares, we become an even better option for consumers,” he added.
Frontier had about 2% of the U.S. commercial air travel market by capacity in 2021, while Spirit owned about 3% of the market, according to Cirium.
A combined Spirit-Frontier network
The combined airline would serve upwards of 145 destinations with more than 600 nonstop routes across the United States, Latin America and the Caribbean, the airlines said.
“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.
By combining resources and coordinating their schedules, particularly in cities where the airlines overlap, the post-merger airline “will be able to utilize efficient scheduling and high utilization to drive ultra-low-costs,” he added.
