- Frontier, Spirit merger to save up to U$1 billion in annual consumer savings
- Up to 10,000 new direct jobs to be created by 2026
Spirit Airlines and Frontier Group Holdings, the parent company of Frontier Airlines, today announced their intention to merge to create the fifth largest airline in the United States, bringing more ultra-low fares to customers in more destinations across the United States, Latin America, and the Caribbean.
The deal is worth U$6.6 billion with Spirit valued at U$2.9 billion.
The combined airline is expected to save up to U$1 billion in annual consumer savings, offer more than 1,000 daily flights to over 145 destinations in 19 countries, and deliver more ultra-low fares with the expansion of more than 350 A320neo family aircraft on order.
It is expected to generate approximately U$5.3 billion in annual revenue based on 2021 results, saving up to U$500 million in annual operating synergies and have a cash balance of approximately U$2.4 billion as of the end of 2021.
Current employees of both companies will have the opportunity to be part of the combined airline, and have better career opportunities as Spirit and Frontier aim to add up to 10,000 direct jobs and thousands of additional jobs at the companies’ business partners.
Both airlines aim to operate the youngest and greenest aircraft fleet in the United States, with the operation of the largest Airbus A320neo aircraft fleet of any airline in the country.
Frontier Airlines currently operates 74 A320neo with an additional 74 on order and has 168 A321neo on order while Spirit Airlines currently operates 53 A320neo with an additional 75 on order and has 31 A319neo and 26 A321neo on order.
Existing Frontier equity holders will own approximately 51.5 percent and existing Spirit equity holders will own approximately 48.5 percent of the combined airline.
The Board of Directors for the new airline will comprise 12 directors, including the CEO, of which seven will be named by Frontier and the remaining five will be named by Spirit. William A. Franke, the Chairman of Frontier’s Board of Directors and managing partner of Indigo Partners, Frontier’s majority shareholder, will be the Chairman of the board of the combined company.
The merger is expected to close in the second half of 2022.
“We are thrilled to join forces with Frontier to further democratize air travel”President and CEO of Spirit, Ted Christie