Budget US airlines Spirit and Frontier announced on Monday they will merge to create a competitive low-cost airline, in an industry “shake up” they say aims to challenge the dominance of larger rivals.
The cash and stock deal is valued at $6.6 billion and expected to close in the second half of the year, pending approval from US antitrust regulators.
“This transaction is centred 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,” Spirit chief executive Ted Christie said in a statement.
“We look forward to uniting our talented teams to shake up the airline industry.”
The deal — with Frontier Airlines controlling 51.5 per cent of the new entity and Spirit controlling the remaining 48.5 per cent — would create the nation'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 its headquarters location, said they were a “perfect fit”, whose merger would save consumers about $1bn annually.
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 chief executive of Frontier.
The Frontier board of directors chairman will become chairman of the board of the combined company, the statement said.
The as-yet-unnamed board will comprise 12 directors, seven named by Frontier and five by Spirit.
On Wall Street, Spirit's stock jumped more than 11 per cent to $24.33 in premarket trade on Monday, while those of Frontier Group, the parent company of Frontier Airlines, slid by 2.3 per cent to $12.10.
The companies, which both fly exclusively Airbus aircraft, aim to create about 10,000 jobs by 2026.
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AirlineRatings.com has released its 2022 top 10 of the world's safest low-cost airlines. First on the alphabetical list is Air Arabia, the first budget carrier in the UAE. -
A Thai Air Asia Airbus A320-200 plane at Don Mueang International Airport, Bangkok. Reuters -
Allegiant Air operates in the US and is North America's 14th biggest airline. AFP -
An airBaltic Airbus A220-300 at Munich International Airport -
Incident records, crash records and fleet age were among the factors used to compile the list. UK operator easyJet has 31 planes in a fleet that flies throughout Europe. AFP -
flydubai operates to more than 90 destinations from its Dubai hub. Jeff Topping for The National -
Colorado carrier Frontier Airlines flies to more than 100 US destinations and employs more than 3,000 staff. Getty -
Jetstar Group, launched by Australia's flag carrier Qantas, has operated out of Melbourne since 2017. AFP -
JetBlue, which has its headquarters in New York, is North America's seventh-biggest airline by passengers carried. AFP -
An IndiGo Airlines aircraft in Ahmedabad, India. The low-cost carrier is the country's largest passenger airline. Reuters -
Since its formation in 1984, Irish carrier Ryanair has grown to be one of the giants of low-cost travel, with a fleet of more than 400 and bases at Dublin and London Stansted airports. AFP -
Singapore Airlines' low-cost subsidiary Scoot Airlines ranks in the top 20. Getty Images -
Southwest is the world's largest low-cost airline. AP -
India's SpiceJet flies to 64 destinations, including 52 domestic and 12 international routes. EPA -
Spirit Airlines, one of the largest low-cost carriers in the US. Bloomberg -
Vueling, Spain's largest airline, has hubs in Barcelona and Rome. AFP -
VietJet Air flies to 46 destinations from Hanoi in Vietnam. AFP -
Volaris Airlines is the second largest airline in Mexico after flag carrier Aeromexico and the main operator for domestic flights. AFP -
Canada's WestJet airlines operates more than 700 North American flights a day, carrying more than 66,000 passengers. AFP -
Wizz Air, a Hungarian airline that flies to 44 countries in Europe, Africa and the Middle East, and that has a subsidiary in the UAE, Wizz Air Abu Dhabi, rounded the original top 10 list and is one of the world's safest budget airlines. AFP
