The two largest low-case airlines in the United States have agreed to merge, creating what will become the fifth-largest airline.
Frontier Airlines and Sprint Airlines approved the deal over the weekend, valued at $6.6 billion. The CEOs of each company announced the new agreement in New York City. Frontier Airlines will control 51.5 percent of the newly merged airline, and Sprint will control the remaining 48.5 percent.
The new airline does not yet have a determined name. Also still to be agreed upon and announced is who the new CEO will be, and what the location of the airline will be. Frontier is based in Denver, and Spirit is based in Miramar, Florida.
Bill Franke, the current chair of Frontier and managing partner of Frontier’s parent company Indigo Partners, will chair the new airline. In a statement after the merge was announced, Franke said that the new airline will create America’s most competitive ultra-low fare airline at a benefit to consumers.
Each airline has been aggressively expanding over the past decade. Frontier has targeted cities where larger airlines, such as Southwest, have a strong presence, entering the city with low fares in order to appeal to price-conscious travelers. Neither company has dominated one particular market, and the new combined airline will therefore cover a lot more territory than either did singularly.
It is also a bit of a coming-home party for Spirit Airlines. From 2006 through 2013, Indigo Partners held a stake in Spirit, and Franke served as the chair of that airline up until Indigo sold its position in its carrier. After that, Indigo bought Frontier Airlines from Republic Airlines.
The Biden administration has made it clear that company mergers will be scrutinized far more aggressively than they were under the Trump administration.
The deal is expected to close in the second half of 2022.
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