In a deal valued at $6.6 billion, the upcoming Spirit Airlines and Frontier Airlines merger agreement will create the fifth-largest airline in the United States and the country’s most competitive low-fare airline.
The merger gives Frontier Airlines a 51.5% controlling stake in the combined airline, and current Spirit shareholders will own approximately 48.5% of the combined airline. The transaction is expected to close in the second half of the year. It still needs approval from Spirit’s shareholders. The boards of Frontier and Spirit Airlines approved the deal over the weekend.
The Frontier and Spirit Airlines merger will bring $1 billion in annual consumer savings, more than 1,000 daily flights to over 145 destinations in 19 countries, and expand with more than 350 aircraft to deliver more even more low-price flights across the United States, Latin America and the Caribbean.
In addition, Frontier and Spirit are looking to create more jobs, adding 10,000 direct jobs and thousands of additional jobs at their business partners by 2026.
“The stronger financial profile of the combined company will empower it to accelerate investment in innovation and growth and compete even more aggressively, especially against the dominant “Big Four” airlines, among others,” Frontier Airlines said in a press release.
“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,” said Ted Christie, President and CEO of Spirit.
The companies haven’t announced the new name of the combined carrier, the CEO, or the location of the airline’s headquarters.
Both companies individually have faced criticism throughout the pandemic due to mass flight cancellations and upticks in unruly passengers. But, many will be travelers will be looking forward to saving money on flights once the merger is finalized.