Frontier Spirit: How scared should
the Big 4 be? — April 2022

The proposed merger between Frontier and Spirit Airlines promises, or threatens, to create a new ULCC force, the fifth biggest airline in the US market. Here we take a look at the merger from a macro perspective while, in the following article, Skailark presents a unique analysis of the combined cost and market competitiveness on a route-by-route basis of the two airlines.

The merger agreement was announced in February, is currently being reviewed by the US DoT and DoJ, and is expected to be finalised by the end of this year. Under the agreement Spirit Airlines will be acquired by Frontier Group Holdings for $6.6bn, of which $2.9bn is Spirit’s equity value and $3.7bn is the assumption of net debt and operating lease liabilities, with Frontier shareholders owning 51.5% of the new entity and Spirit shareholders 48.5%.