Frontier, Spirit Airlines merge in $6.6B deal

Frontier Airlines and Spirit Airlines will merge to form the nation’s fifth-largest airline, the budget carriers announced Monday.

Frontier will purchase a majority stake in Spirit for $6.6 billion in a deal that will further consolidate the airline industry. The airlines said that they needed to join forces to compete with the four largest airlines that control the vast majority of the U.S. market and argued that the merger will save consumers money. 

“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,” Spirit CEO Ted Christie said in a statement.

The newly formed airline, which does not yet have a name, plans to aggressively expand in the coming years by continuing the firms’ low-fare business model. Frontier and Spirit had a combined 5.4 percent market share in 2019, up from 2.8 percent in 2013, according to the Department of Transportation. 

The boards of both airlines approved the deal over the weekend. The merger is expected to close in the second half of 2022, pending regulatory approval. 

The Biden administration has closely scrutinized increasing corporate consolidation and last year filed an antitrust lawsuit against American Airlines and JetBlue challenging their cooperation agreement, arguing that it would lead to higher prices for consumers.