Frontier Airlines is purchasing Spirit Airlines in a nearly $3 billion deal that will produce the fifth-largest carrier in the U.S.
Frontier and Spirit said in a joint news release that they will provide more low-cost flying fares to more travelers in destinations across the U.S., Latin America and the Caribbean.
"This transaction is centered around creating an aggressive ultra-low fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public," Spirit CEO Ted Christie said in a statement.
The move comes as the airline industry continues to struggle due to the COVID-19 pandemic, which has caused air travel to take a downturn, staffing shortages and other impacts. Spirit Airlines experienced extensive flight disruptions at one point in the summer of 2021, when it canceled more than 2,800 flights between July 30 and Aug. 9 and attributed the problem to staffing shortages, bad weather and technical problems, CNBC reported.
The merger is expected to close in the second half of this year, "subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders," the release said. A spokesperson for Frontier told Newsweek that the name that the merged airlines will fly under will be determined at a later point in time.
The deal will likely face scrutiny from federal antimonopoly regulators, as the Biden administration has taken a tougher approach on big corporate mergers in an effort to encourage competition, the Associated Press reported.
Under the $2.9 billion cash-and-stock deal, the companies are expecting $1 billion in annual consumer savings, foresee adding more jobs and are looking to expand their offerings with more than 350 aircraft on order, according to the news release.
Spirit and Frontier said that they anticipate adding 10,000 jobs at the merged airline and anticipate the addition of thousands more jobs at the companies' business partners by 2026. The release also said, "it is expected that all current team members will have an opportunity to be a part of the combined airline."
"This combination is all about growth, opportunities and creating value for everyone – from our guests to our team members to the flying public at large," said Mac Gardner, chairman of the Board of Spirit. "We're a perfect fit – our businesses share similar values, including our longstanding commitment to affordable travel.
Newsweek has reached out to a representative for Spirit for additional comment.
Update 2/27/22 10:40 AM ET - This story has been updated with additional information.
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