Frontier Airlines and Spirit Airlines (S64) (SAVE), two low-cost US carriers, have announced plans to unite to form an ultra-low-cost airline.
Current Frontier Airlines equity holders will own around 51.5 percent of the combined carrier, while existing Spirit equity holders will own around 45.8 percent, “on a fully diluted basis, providing both Frontier and Spirit equity holders with substantial upside potential,” according to a joint statement released on February 7, 2022.
Following the merger, the board of directors will be made up of 12 members, including the CEO (CEO). Frontier Airlines will choose seven members, while Spirit Airlines (S64) will choose the remaining five (SAVE).
“Frontier’s controlling stockholder has approved the transaction and related issuance of shares of Frontier common stock upon signing of the merger agreement.
The combined company’s management team, branding, and headquarters will be determined by a committee led by Mr. Franke prior to the close,” the statement adds.
Both sides expect the combined airline to save up to $1 billion in annual consumer savings after the merger, which is expected to occur in the second half of 2022.
It will also be able to provide 1,000 daily flights to 145 different locations. By establishing additional flights to underserved destinations in the United States, Latin America, and the Caribbean, the merged carrier will offer ultra-low fares.
The new business will also add more than 350 commercial planes to its fleet, aiming to have the largest fleet of Airbus A320 family airplanes in the United States.
Frontier and Spirit both predict annual revenues of around $5.3 billion by 2021, based on the combined company’s potential growth.
The combined airline also expects to improve its financial picture by “delivering annual run-rate operating synergies of $500 million once full integration is accomplished.”
By 2026, the merger should have created 10,000 employment.
According to Spirit Airlines CEO Ted Christie, the move is expected to create “an aggressive ultra-low fare competitor”, which will “increase competitive pressure” and result in more “consumer-friendly” fares.
“We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent Guest service,” Christie added.
 (SAVE), two low-cost US carriers, have announced plans to unite to form an ultra-low-cost airline.){kind=link}