By Glory Feb, 08, 2022 Business

Frontier and Spirit will merge to create the fifth largest Airline in the US

US airlines, Frontier and Spirit have announced plans to merge and create the country’s “most competitive ultra-low fare airline.” This merger will make them the fifth largest airline in the US.

Both airlines known for their relatively cheap fares announced the merger deal on Monday in a joint press release. The companies’ board of directors unanimously approved the $6.6 billion transaction and expect it to close by the second half of this year.

“We’re in a perfect fit – our businesses share similar values, including our longstanding commitment to affordable travel,” said Mac Gardner, chairman of Spirit Airlines’ board of directors. “At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets worldwide.”

Ted Christie, Spirit’s President and CEO, in a statement, said the deal is created on “aggressive ultra-low fare competitor” to provide their guests better services, create more opportunities for their teams, and become more competitive in the market. Mostly, the deal is focused on creating a more consumer-friendly travel prices for their customers.

“Everybody wins through this transaction,” said Barry Biffle, Frontier CEO, in an interview with CNBC on Monday. “Consumers are going to win with a billion dollars in savings, our shareholders win with $500 million in synergies, and our team members win with 10,000 more direct jobs in the next couple years.”

The leaders of both airlines have confirmed that once the transaction is complete, travelers will have better deals and services. They assured of 1,000 daily flights to nearly 150 destinations in 19 countries. This move will also create 10,000 jobs by 2026.

The announcement sparked different reactions, with some critics saying that there is no certainty that travelers will better choices and cheaper fares following the merger. Consumer Reports' adviser William J. McGee accused merging airlines of always saying the same thing but never meeting up to those expectations. "And as we've seen, consolidation has not been good for consumers and it's only reduced their choices."

On the contrary, past merger airlines only met up to half of the expectations as they resulted in fewer flights, higher fares and fees, and poor customer service, according to McGee. Despite commending Frontier and Spirit airlines for their relatively cheap fares, he added that both airlines are also known for poor customer services. Meaning that there is no guarantee that the customer services would get any better after the merger.

“For example. Frontier generated more complaints in the first year of COVID, over refunds on a per-passenger basis than any airline in the United States,” McGee said. “And Spirit, of course, invented what the airline industry calls ancillary revenue. That is what we call nickel and diming with fees. They invented it in the US. So every time you pay baggage fees, you can thank Spirit for that.”

Tags: Frontier Spirit Airlines Merger

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