Frontier Airlines and Spirit Airlines revealed that they would be merging to create a single airline entity. According to the airlines, the pairing would mean $1 billion worth of savings for future passengers. The new airline would remain under the Indigo Partners umbrella, where Frontier Airlines sits today.

The merger of Frontier Airlines and Spirit Airlines will likely create a huge wave across the US airline industry. The airlines will go from competing against one another to sharing each other's potential passengers. The greater offering will likely be seen as a win for many who fly with one airline or the other.

How will the new airline work?

The new airline will see Frontier and Spirit Airlines becoming one. Frontier's equity holders will own around 51.5% of the new venture, while Spirit's equity holders will own approximately 48.5%. Bill Franke is the Managing Partner of Indigo Partners, Frontier's largest shareholder. He will go on to be the Chairman of the Board for the new airline. The board will have 12 members, seven from Frontier and five from Spirit.

If you combined the available seat miles of both airlines for 2021, the dual airline would've been larger than JetBlue and Alaska Airlines. Both were already larger than Allegiant. The deal is set to be closed in the second half of this year, assuming that everything goes to plan. The airline's new name, brand, and headquarters will be announced before the deal is closed, though the airlines declined to comment on this today.

Commenting on the plans, Spirit President and CEO Ted Christie commented,

"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. We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent Guest service."

A huge new offering

The merger of the two airlines will create even more possibilities for passengers. While there are a fair few airports that have both Frontier and Spirit, there is also a good portion that only has one or the other serving them at present. For Frontier, this is focused more across the contiguous United States, while Spirit's unique airports are primarily on the East Coast and in Central and Southern America.

An overview of some destinations served by the two characters. Photo: Frontier/Spirit

According to a website set up for the merger, the new mega-ULC airline will offer 1,000+ daily flights to 145+ destinations. Serving 19 countries with 283 aircraft, the airlines will provide more than 650 non-stop routes. Given outstanding aircraft orders, the fleet size is set to balloon to more than 350 aircraft next year and almost 500 aircraft in 2026.