Low cost Spirit Airlines and Frontier Airlines announced on Monday a merger process that will create the 5th largest US airline, after Delta, American, United and Southwest Airlines.
The budget airlines’ fleet will comprise 286 Airbus A319, A320 and A321 aircraft. Spirit currently has 175 aircraft, while Frontier has 111, but plans are to reach a total of 493 planes by 2026.
The merger is valued at $6.6 billion when accounting for debt and other liabilities. As a result for customers, Spirit and Frontier said they will offer “lower fares to more destinations.”
It is expected that the joining of forces will bring annual savings of around $1 billion. In the statement, the companies guaranteed the stability of 15,000 professionals, and projected the hiring of another 10,000 direct jobs by 2026.
“Together, Frontier and Spirit will be America’s Greenest Airline and deliver more ultra-low fares to
more people in more places,” said Barry Biffle, President and CEO of Frontier.
“We are thrilled to join forces with Frontier to further democratize air travel,” said Ted Christie,
President and CEO of Spirit.
In the plan, the future airline said it will have more destinations to the United States, Latin America and the Caribbean. “Including large cities and underserved communities,” stated Spirit and Frontier.
In the new corporate arrangement, Frontier will have a majority, with 51.5%, with the remainder in the hands of Spirit’s shareholders.
The merger is expected to close in the second half of 2022, “subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders,” the statement added.
Founded in 1994, Frontier is headquartered in Denver and its network primarily serves destinations on the US East Coast, as well as cities in the Caribbean, Mexico and Central America.
Spirit Airlines appeared earlier, in 1980, but only started operations in 1992. It operates in an area similar to Frontier, but also flies to South America with routes to Ecuador and Colombia.