Spirit Airlines, Frontier Airlines Announce Merger To Create Ultra-low Fare Airline

Spirit Airlines, Inc. (SAVE) and Frontier Group Holdings, Inc. (ULCC), parent company of Frontier Airlines, Inc., announced a merger agreement. Spirit equity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own. This implies a value of $25.83 per Spirit share. The deal values Spirit at a fully diluted equity value of $2.9 billion, and a transaction value of $6.6 billion. Upon closing, existing Frontier equity holders will own approximately 51.5% and existing Spirit equity holders will own approximately 48.5% of the combined airline. The merger is expected to close in the second half of 2022.

The combined airline is expected to offer more than 1,000 daily flights to over 145 destinations in 19 countries. It is expected to expand with more than 350 aircraft on order. By 2026, Spirit and Frontier plan to add 10,000 direct jobs and thousands of additional jobs at the companies’ business partners.

“Together, Frontier and Spirit will be America’s Greenest Airline and deliver more ultra-low fares to more people in more places,” said Barry Biffle, CEO of Frontier.

Frontier and Spirit said the combined airline will feature the largest fleet of A320neo family aircraft of any airline in the country. The combined airline is expected to achieve over 105 seat miles per gallon by 2025. On a combined basis, the company would have annual revenues of approximately $5.3 billion.

William Franke, the Chair of Frontier’s Board, will be Chairman of the Board of the combined company. The combined company’s management team will be determined by a committee led by Franke prior to close.

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