airlines Spirit and Frontier announced this Monday that they reached an agreement to merge as a measure to face the losses that the industry suffered due to the pandemic. Spirit reported losses for $440.6 million in 2021, and $719.6 million in 2020. Frontier, for its part, had reported 299 million dollars in losses for 2021, and a similar figure in 2020.
But those bad times are behind us the merger deal has been done for the whopping sum of 6.6 billion dollars. It is still unknown under which brand they will operate or which company will lead the merger. But it is known that By combining both companies, the fifth largest airline in the country would be created, only behind American Airlines, Delta, United and Southwest Airlines. -which combined control 80% of air traffic in the United States-. The new combined company would offer more than a thousand flights a day to 145 different destinations.
“This transaction is focused on creating an aggressive competitor in the field of low cost in order to serve our customers even better, expand career opportunities for our team members, and increase pressure to ultimately lower the cost of flying.” ted christieCEO of Spirit.
Both airlines have similar problems. They offer tickets at a very low cost, but they charge extra for absolutely everything else.: from the bags to anything that is consumed on board, through the printing of the ticket. This means that they have high approval ratings for their fares, but the experience of flying with them is often not satisfactory for passengers.
According to statistics from the Department of Transportation, Spirit leads in number of complaints to any other airline in the country, with 13.25 complaints per 100 thousand passengers. It is followed by Jet Blue, with 6.85 complaints per 100,000 passengers, to reach Frontier in third place with 5.76, all based on data between January and September 2021. Frontier had had a critical point in the same period in 2020. (time of flight cancellations due to the pandemic), when every 100 thousand passengers, 60.24 complained.
Also, according to the American Consumer Satisfaction Index, Spirit and Frontier have the worst customer satisfaction ratings in the country.
It is unknown if the deal will be approved by the Biden administration’s antitrust committee. Contrary to other administrations, the current federal government has indicated an interest in greater diversity in the air transport industry, and they recently denied permission to a merger between American Airlines and Jet Blue. But those involved in the deal between Spirit and Frontier are hopeful that this time it will be different.
“This is the kind of deal the Biden administration should support. It’s beneficial to consumers, it’s beneficial to employees. It is beneficial to the communities that the airline will serve. And at the end of the dayeven after the merger, the two airlines will only control less than 10% of the market”, he indicated in an interview with the chain CNBC bill frankeFrontier committee member and chairman of Indigo Partners, Frontier’s principal shareholders.
If the merger goes through, it would be the first such deal since 2016, when Alaska Airlines bought Virgin Airlines. The four major airlines in the United States are the result of the merger of 10 airlines in the last 25 years.
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