Frontier and Spirit Airlines set to merge

A Spirit Airlines A321. Image: © Glenn Beltz

The two largest ultra low-cost carriers (ULCC) in the United States, Frontier Airlines and Spirit Airlines, have entered into an agreement to merge, thus creating the largest ULCC in the Americas. The merger is expected to be completed by the end of 2022. In a press release, the deal is valued at US$6.6 billion, with Frontier technically taking over Spirit Airlines. All Spirit shareholders would receive US$25.34 in Frontier shares and a cash incentive per Spirit share owned.

William Franke, Frontier Airlines Chairman and owner of its parent company Indigo Partners said: “Indigo has a long history with both Spirit and Frontier, and is proud to partner with them in creating a disruptive airline. 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 […] will create America’s most competitive ultra-low fare airline (…).

Spirit Airlines CEO Ted Christie commented: “We are thrilled to join forces with Frontier to further democratize air travel, this transaction is centered around creating an aggressive ultra-low fare competitor to […] increase competitive pressure, resulting in more consumer-friendly fares for the flying public.

Combined, the two airlines will operate more than 280 Airbus A320 family aircraft across more than 650 routes and on over 1000 daily flights. With nearly 400 A320neo aircraft to be delivered over the upcoming years, the new airline will aim to further increase its market share from the combined 9,4% it had in 2020.

Frontier Airlines was launched in 1994 in Denver and initially operated Boeing 737 aircraft on domestic flights. It later introduced the Airbus A318 and A319 to its fleet, filed for Chapter 11 bankruptcy in 2008 and was sold to Republic Airways. In 2010 Frontier took over Midwest Express and in 2014 it was sold to Indigo Partners, who transformed the airline into the low-cost carrier it is today.

Spirit Airlines originated in Michigan in 1964 as a trucking company, which started charter tour operations in 1983 as Charter One Airlines and operated its own first flight in 1990 as Charter One. Charter One was rebranded as Spirit Airlines two years later. It originally operated various DC-9 and MD-80 aircraft before transitioning to the A320 family. It is currently the largest ULCC in the United States.