• Wed. May 11th, 2022

Spirit and Frontier to ‘shake up’ airline industry in $6.6 billion merger

US low-cost carriers Spirit and Frontier announced on Monday they would merge to create a competitive low-cost airline, in a sector they say aims to challenge the dominance of big rivals.

The cash and stock deal is valued at $6.6 billion and is expected to close in the second half of the year, pending approval from US antitrust regulators.

“This transaction is focused on creating an aggressive, ultra-low competitor to even better serve our customers, expand career opportunities for our team members, and increase competitive pressure, resulting in more consumer-friendly rates. “Spirit General Manager Ted Christie said. A declaration.

“We look forward to uniting our talented teams to shake up the airline industry.”

The deal – with Frontier Airlines controlling 51.5% of the new entity and Spirit controlling the remaining 48.5% – would create the country’s fifth-largest airline, after American, Delta, Southwest and United.

Frontier and Spirit, which did not announce a new name for the joint company or the location of its headquarters, said they were a “perfect fit”, whose merger would save consumers about $1 billion. dollars per year.

The new airline would also have a fleet of more than 350 aircraft and offer 1,000 daily flights to 145 destinations in 19 countries.

“Together, Frontier and Spirit will be America’s greenest airline and deliver more ultra-low fares to more people in more places,” said Barry Biffle, President and CEO of Frontier.

The chairman of Frontier’s board of directors will become chairman of the combined company’s board of directors, according to the release.

The board, which has yet to be named, will include 12 directors, seven nominated by Frontier and five by Spirit.

On Wall Street, shares of Spirit jumped more than 11% to $24.33 pre-market on Monday, while those of Frontier Group, the parent company of Frontier Airlines, fell 2.3% to 12, $10.

The companies, which both exclusively fly Airbus planes, aim to create around 10,000 jobs by 2026.

Updated: February 7, 2022, 4:00 p.m.