Frontier, Spirit: Merger Means Larger Network, More Service To Smaller Markets

Executives with US ULCCs Frontier Airlines and Spirit Airlines believe the carriers’ proposed merger will enable the combined airline to build a stronger network, including more service to smaller markets, to compete with major US airlines.

Denver-based Frontier and Fort Lauderdale, Florida-based Spirit, which announced their merger plan on Feb. 7, are proposing to combine, creating the fifth largest airline in the US based on capacity—only American Airlines, Delta Air Lines, Southwest Airlines and United Airlines would operate more capacity.

Based on current networks, the combined airline would operate more than 1,000 daily flights to over 145 destinations in the US and 18 other countries (in the Caribbean, Mexico and near-South America).

The ULCCs still need to gain US Justice Department (DOJ) approval for their merger, which they hope to close in the second half of 2022. To do so, the carriers will have to convince the DOJ that the combination will create more competition in the US market.

Bill Franke, the chairman of Frontier owner Indigo Partners, said the merger will be “transformative” for the US airline market, bringing genuine low-fares competition to the so-called “Big Four” major carriers in more cities.

Frontier CEO Barry Biffle (pictured right) added: “This merger is completely different from any other [airline] merger in history in the US. This isn’t about reducing competition and raising fares. This is about getting more low fares to more people.”

The carriers plan to make the case that their respective networks are complimentary—with Frontier more focused on the western US and Spirit more focused on the eastern US and the Caribbean—and combining will enable expansion into more markets.

Biffle said the combined carrier will be able to extend its reach with “but for” routes—service that would not be possible “but for the merger.” These include “a lot of small and midsize markets” and “places that we’ve failed in the past, but together we can make successful,” he explained.

Biffle cited Eugene (EUG), Oregon, as an example of a city the combined carrier could serve successfully, but neither carrier would be able to make work on its own.

“Both companies are going to participate in a significant upside here,” Spirit CEO Ted Christie (pictured left) said. “There’s plenty of opportunity for us to pursue markets with low fares or increase density in markets where we serve today. The combined airline will be able to do that faster and more efficiently. While there are nuances to each airline’s network, we’re both core-focused on leisure markets. There’s still plenty of that out there … We’ll be focusing on making this network hum.”

There are more Frontier-only markets than Spirit-only markets in the US, and the carriers said the airports served by both carriers will gain more depth. On the Baltimore (BWI)-Orlando (MCO) route, for example, Spirit offers 3X-daily service while Frontier offers 2X-daily service. The five combined routes will give the carriers’ a more flexible schedule and create increased competition for bigger airlines, the airlines said.

The two airports where the carriers have the most overlap are Las Vegas (LAS) and MCO.