{"id":20883,"date":"2022-02-07T17:45:37","date_gmt":"2022-02-07T17:45:37","guid":{"rendered":"https:\/\/saj.pachecostudios.com?p=20883"},"modified":"2022-02-07T17:45:41","modified_gmt":"2022-02-07T17:45:41","slug":"frontier-airlines-and-spirit-airlines-to-merge-creating-americas-ultra-low-fare-airline","status":"publish","type":"post","link":"https:\/\/stateaviationjournal.com\/index.php\/national-news\/frontier-airlines-and-spirit-airlines-to-merge-creating-americas-ultra-low-fare-airline\/%20","title":{"rendered":"Frontier Airlines and Spirit Airlines to Merge, Creating America\u2019s Ultra-Low Fare Airline"},"content":{"rendered":"\n

Combined Fleet Will Be the Youngest, Most Fuel-Efficient and Greenest in the United States<\/em><\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Spirit Airlines, Inc. and Frontier Group Holdings, Inc., parent\ncompany of Frontier Airlines, Inc., announced a definitive merger agreement\nunder which the companies will combine, creating America\u2019s most competitive\nultra-low fare airline.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Together, Frontier and Spirit expect to change the industry\nfor the benefit of consumers, bringing more ultra-low fares to more travelers\nin more destinations across the United States, Latin America and the Caribbean,\nincluding major cities as well as underserved communities. The stronger\nfinancial profile of the combined company will empower it to accelerate investment\nin innovation and growth and compete even more aggressively, especially against\nthe dominant \u201cBig Four\u201d airlines (American, Delta, Southwest, United), among\nothers.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

William A. Franke, the Chair of Frontier\u2019s Board of\nDirectors and the managing partner of Indigo Partners, Frontier\u2019s majority\nshareholder, noted that Indigo has a long history with both Spirit and\nFrontier, and is proud to partner with them in creating a disruptive airline.\n\u201cWe worked jointly with the Board of Directors and senior management team\nacross both carriers to arrive at a combination of two complementary businesses\nthat together will create America\u2019s most competitive ultra-low fare airline for\nthe benefit of consumers.\u201d<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

\u201cWe are thrilled to join forces with Frontier to further\ndemocratize air travel,\u201d said Ted Christie, President and CEO of Spirit. \u201cThis\ntransaction is centered around creating an aggressive ultra-low fare competitor\nto serve our Guests even better, expand career opportunities for our Team\nMembers and increase competitive pressure, resulting in more consumer-friendly\nfares for the flying public. We look forward to uniting our talented teams to\nshake up the airline industry while also continuing our commitment to excellent\nGuest service.\u201d<\/p>\n\n\n\n

\u201cThis combination is all about growth, opportunities and\ncreating value for everyone \u2013 from our Guests to our Team Members to the flying\npublic at large,\u201d said Mac Gardner, Chairman of the Board of Spirit. \u201cWe\u2019re a\nperfect fit \u2013 our businesses share similar values, including our longstanding\ncommitment to affordable travel. At the same time, we have complementary\nfootprints and fleets, including one of the youngest and greenest fleets\nworldwide. Together, we will be even more competitive for our Guests and our\nTeam Members, and we are confident we can deliver on the benefits of this\ncombination to consumers.\u201d<\/p>\n\n\n\n

\u201cTogether, Frontier and Spirit will be America\u2019s Greenest\nAirline and deliver more ultra-low fares to more people in more places,\u201d said\nBarry Biffle, President and CEO of Frontier. \u201cI couldn\u2019t be more excited for\nour team members, customers, partners, the communities we serve and our\nshareholders.\u201d<\/p>\n\n\n\n

Consumers Win with More Ultra-Low Fares to More Places<\/strong><\/p>\n\n\n\n

The combined airline is expected to:<\/p>\n\n\n\n

  • Deliver $1 billion in annual consumer savings.<\/li>
  • Offer more than 1,000 daily flights to over 145\ndestinations in 19 countries, across complementary networks.<\/li>
  • Expand with more than 350 aircraft on order to\ndeliver more ultra-low fares.<\/li>
  • Increase access to ultra-low fares by adding new\nroutes to underserved communities across the United States, Latin America and\nthe Caribbean.<\/li>
  • Deliver even more reliable service through a\nvariety of operational efficiencies.<\/li>
  • Expand frequent flyer and membership offerings.<\/li><\/ul>\n\n\n\n

    Team Members Win with Expanded Opportunities and Increased\nStability<\/p>\n\n\n\n

    • By 2026 Spirit and Frontier expect to add 10,000\ndirect jobs and thousands of additional jobs at the companies\u2019 business\npartners.<\/li>
    • Given the growth of the combined company, it is\nexpected that all current team members will have an opportunity to be a part of\nthe combined airline.<\/li>
    • Team Members of the combined airline will have\nbetter career opportunities and more stability as part of the most competitive\nultra-low fare airline in the United States.<\/li><\/ul>\n\n\n\n

      Sustainability Wins with America\u2019s Greenest Airline<\/strong><\/p>\n\n\n\n

      Frontier and Spirit will be America\u2019s Greenest Airline,\nproviding nationwide access to sustainable and affordable air travel. The\ncombined airline will have the youngest, most modern and fuel-efficient fleet\nin the United States, featuring the largest fleet of A320neo family aircraft of\nany airline in the country. The combined airline is expected to achieve over\n105 seat miles per gallon by 2025.<\/p>\n\n\n\n

      Shareholders Win with Superior Value Creation<\/strong><\/p>\n\n\n\n

      The combination of Spirit and Frontier is expected to\ndeliver enhanced value to shareholders of both companies.<\/p>\n\n\n\n

      • On a combined basis, the company would have\nannual revenues of approximately $5.3 billion based on 2021 results.<\/li>
      • Once combined, Frontier and Spirit expect to\ndeliver annual run-rate operating synergies of $500 million once full\nintegration is completed, which will be primarily driven by scale efficiencies\nand procurement savings across the enterprise with approximately $400 million\nin one-time costs.<\/li>
      • The combined airline is expected to have a\nstrengthened financial profile, with a cash balance of approximately $2.42\nbillion as of the end of 2021 on a combined basis.<\/li><\/ul>\n\n\n\n

        Under the terms of the merger agreement, which has been\nunanimously approved by the boards of directors of both companies, Spirit\nequity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for\neach existing Spirit share they own. This implies a value of $25.83 per Spirit\nshare at Frontier\u2019s closing stock price of $12.39 on February 4, 2022,\nrepresenting a premium of 19% over the February 4, 2022, closing price of\nSpirit, and a 26% premium based on the 30 trading-day volume-weighted average\nprices of Frontier and Spirit. The transaction values Spirit at a fully diluted\nequity value of $2.9 billion, and a transaction value of $6.6 billion when\naccounting for the assumption of net debt and operating lease liabilities.<\/p>\n\n\n\n

        Upon closing of the transaction, existing Frontier equity\nholders will own approximately 51.5% and existing Spirit equity holders will\nown approximately 48.5% of the combined airline, on a fully diluted basis,\nproviding both Frontier and Spirit equity holders with substantial upside\npotential.<\/p>\n\n\n\n

        Bringing Our Airlines Together \u2013 Governance and Timing to Completion<\/strong><\/p>\n\n\n\n

        The Board of Directors for the new airline will be comprised\nof 12 directors (including the CEO), seven of whom will be named by Frontier\nand five of whom will be named by Spirit. Mr. Franke will be Chairman of the\nBoard of the combined company.<\/p>\n\n\n\n

        The merger is expected to close in the second half of 2022,\nsubject to satisfaction of customary closing conditions, including completion\nof the regulatory review process and approval by Spirit stockholders.\nFrontier\u2019s controlling stockholder has approved the transaction and related\nissuance of shares of Frontier common stock upon signing of the merger\nagreement. The combined company\u2019s management team, branding and headquarters\nwill be determined by a committee led by Mr. Franke prior to close.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Combined Fleet Will Be the Youngest, Most Fuel-Efficient and Greenest in the United States Spirit Airlines, Inc. and Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc., announced a definitive merger agreement under which the companies will combine, creating America\u2019s most competitive ultra-low fare airline. Together, Frontier and Spirit expect to change the industry […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[115],"tags":[],"class_list":["post-20883","post","type-post","status-publish","format-standard","hentry","category-national-news"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/20883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/comments?post=20883"}],"version-history":[{"count":1,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/20883\/revisions"}],"predecessor-version":[{"id":20888,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/20883\/revisions\/20888"}],"wp:attachment":[{"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/media?parent=20883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/categories?post=20883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateaviationjournal.com\/index.php\/wp-json\/wp\/v2\/tags?post=20883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}