Frontier and Spirit, the two low-cost airlines in the United States, have announced plans to merge to form the country's "most competitive ultra-low fare" airline.
The two airline jobs said in a joint press release on Monday that their boards of directors unanimously authorized the $6.6 billion transactions, which is expected to finalize in the second half of this year.
Officials from the two carriers claim that by uniting they will be able to offer even better rates and more reliable service to travellers, with around 1,000 daily flights to almost 150 locations in 19 countries.
According to the corporations, it is also expected to add 10,000 jobs by 2026.
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Mac Gardner, chairman of Spirit's board of directors said: "We're a perfect fit — our businesses share similar values, including our longstanding commitment to affordable travel.”
He added, “At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets worldwide."
Frontier and Spirit plan to transform the industry for the better by offering more ultra-low tickets to more travellers in more destinations across the United States, Latin America, and the Caribbean, including major cities and underserved regions, according to the airlines.
In an interview, Monday, February 8, CEO Barry Biffle, said: "Everybody wins through this transaction, consumers are going to win with a billion dollars in savings, our shareholders win with $500 million in synergies, and our team members win with 10,000 more direct jobs in the next couple years."
The merger takes place at a difficult time for the airline sector.
Earnings had been recovering after taking significant damage earlier in the pandemic, but the new omicron wave-cut travel demand while boosting airline prices, putting the companies further in the negative.
The outbreak of infections induced by the infectious variation also caused a large number of airline personnel to call in sick, resulting in aircraft delays and cancellations across the United States.
Frontier is proposing over $3 billion in cash and stock for Spirit, and when debt and other obligations are included in, the total value of the transaction is projected to be $6.6 billion.
