Frontier Airlines and Spirit Airlines are proposing to combine in a $2.9 billion deal.
If it goes through, the combination would create a larger discount airline to compete against the nation’s dominant carriers and, the two airlines say, promote lower fares.
Frontier Airlines and Spirit Airlines said in a joint press release Monday that the companies' boards of directors had unanimously approved the $6.6 billion transaction and expect it to close in the second half of this year.
"We're a perfect fit — our businesses share similar values, including our longstanding commitment to affordable travel," said Mac Gardner, chairman of Spirit's board of directors. "At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets worldwide."
The combined airline would offer 1,000 daily flights to more than 145 destinations in 19 countries and directly add 10,000 jobs by 2026, the companies said.
Both are ultra-low-cost carriers that tempt travelers with rock-bottom prices for no-frills service but often generate more than their share of consumer complaints.
The deal is likely to get a close examination from antitrust regulators in the Biden Administration, which has signaled a tougher line against big corporate mergers.
However, the Frontier-Spirit combination would rank only fifth among U.S. airlines in passenger-carrying capacity and seventh in revenue.
It is a cash-and-stock deal. Spirit shareholders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own.
This implies a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on Friday.
The deal is valued at $6.6 billion when accounting for the assumption of debt and operating lease liabilities.
Information from NPR was used in this report.
