Frontier, Spirit Announce Merger To Create Fifth-Largest U.S. Airline

Spirit Airlines and Frontier Airlines announced plans Monday to merge, a move that executives at the low-cost carriers say would create a company able to compete more aggressively against its largest rivals while offering cheaper fares and service to smaller cities. The deal would create the nation’s fifth-largest carrier.

Frontier agreed to acquire Spirit for $2.9 billion in cash and stock, a transaction valued at $6.6 billion when accounting for debt and operating lease liabilities. Executives say it would allow the combined airline to be more competitive against the “Big Four” carriers — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.

The announcement comes amid a period of change for the airline industry, which saw interest in travel plummet at the start of the coronavirus pandemic, only to be caught flat-footed this past summer when demand rebounded. Airline officials and analysts say the combined airline could benefit from a rise in leisure travel, even as the lucrative business travel industry struggles to regain its pre-pandemic footing.

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