Two of the most prominent ultra-low cost carriers in the U.S. plan to execute a historic merger that would shake up the airline landscape.
On Monday, Frontier Airlines and Spirit Airlines announced a merger agreement expected to create the country’s largest budget carrier, and fifth-largest overall. The $6.6 billion deal was approved by the boards of both companies and is pending government approval, with an expected closure taking place later this year.
The new airline is expected to deliver $1 billion in customer savings, according to the carriers, and offer more than 1,000 daily flights to over 145 destinations in 19 countries across complementary networks.
The as-yet-unnamed company is scheduled to take delivery of nearly 350 Airbus A320neo family aircraft that will offer reduced operating costs, improved fuel efficiency and less noise, as well as enable future network expansion.
The merger also aims to increase reliable service and improvements to operational efficiencies, along with an expanded frequent flyer program.
“We are thrilled to join forces with Frontier to further democratize air travel,” said Ted Christie, president and CEO of Spirit, in a statement.
“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. We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent guest service.”
Frontier will hold a 51.5 percent controlling stake in the company while its chairman, Bill Franke, will head the new carrier. Its board will consist of 12 directors: seven chosen by Frontier and five by Spirit.
A committee led by Franke will choose a CEO and headquarters location later this year.
Franke, also the managing partner of Indigo Partners, Frontier’s majority shareholder, noted that Indigo has a long history with both Spirit and Frontier.
“We worked jointly with the board of directors and senior management team across both carriers to arrive at a combination of two complementary businesses that together will create America’s most competitive ultra-low fare airline for the benefit of consumers,” he said.
Frontier has offered service at PIT since June 2016 while Spirit began service in May 2017. Combined, they have carried more than 2.9 million passengers as of December 2021. In 2021 alone, Spirit carried about 9.7 percent of all passenger traffic at PIT, fifth most, while Frontier caried about 0.7 percent.
“We look forward to continued growth as Frontier and Spirit successfully move forward together,” Bryan Dietz, Senior Vice President, Air Service & Commercial Development at PIT, said. “We are in touch with both management teams and will continue to follow the agreement closely. We anticipate changes in the industry as we have been through multiple mergers and industry changes before. We are always committed to supporting the goals of the airline to meet the air service needs of this community.”
Spirit currently offers nonstop, year-round service from PIT to Cancun, Mexico; Fort Lauderdale, Fla.; Las Vegas; Los Angeles; Orlando; and Tampa, plus seasonal service to Fort Myers, Fla., and Myrtle Beach, S.C. Frontier, meanwhile, flies seasonal nonstop service to Denver and Orlando.