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