The two biggest "ultra-low-cost" airline companies in the US -- Frontier Airlines and Spirit Airlines -- have agreed to merge in a. The combination of companies will create the fifth biggest airline in the country, after the big four of American Airlines, Delta Air Lines, Southwest Airlines and United Airlines, which account for about 70% of all US flights.
Frontier and Spirit, currently ranked last by the American Customer Satisfaction Index, plan to increase their presence through North America and Central America and expand their routes and workforce. The companies expect to add 10,000 direct jobs as the result of the merger.
Read on to learn how this ultra-low-cost merger will affect travelers and what happens next for both companies.
How will the merger affect existing flights and routes?
Headquartered in Miramar, Florida, Spirit Airlines has a fleet of 111 planes and currently flies to about 80 destinations. Frontier Airlines' fleet of 175 planes serves about 115 cities. Both airlines operate primarily in the US, Canada, Central America and the Caribbean.
In a joint press release, Frontier and Spirit claim that the new combined company will add 350 more planes and aims to offer more than 1,000 daily flights to 145 destinations. The companies promise to "increase access to ultra-low fares by adding new routes to underserved communities across the United States, Latin America and the Caribbean." The new company, if approved, will still account for less than 10% of flights in the US.
How will prices and policies change?
As the merger has just been announced, it's unclear yet exactly how it will affect the prices and policies of the new discount airline. The plan to combine the companies also needs to be approved by the antitrust division of the Department of Justice, which has taken a harder stance on corporate mergers during the Biden administration.
The airlines do promise that the new company will become "America's Greenest Airline." In the joint press release, Spirit and Frontier said that they will have the "youngest, most modern and fuel-efficient fleet" and promise to achieve 105 seat miles per gallon by the year 2025.
What happens to frequent flyer accounts?
In their press release, Frontier and Spirit say that they plan to "expand frequent flyer and membership offerings," but it's still too early to tell how the frequent flyer programs will change, or how existing accounts will be transferred.
The two current frequent flyer programs -- Frontier Miles and Free Spirit -- operate a bit differently. Both include premium tiers of services for high-status members that include a variety of free upgrades like no-cost carry-ons, seat assignments and priority boarding. Both also offer airline-branded credit cards that provide additional miles or benefits.
However, whereas Frontier rewards customers based on miles traveled, Spirit instead disperses benefits based on money spent, including in-flight purchases. It's not yet clear which system will be used by the new airline or how old frequent flyer accounts will be transferred to the new system.
What will the new airline be called?
The companies have not announced a name, leadership or headquarters for the new consolidated company. In an interview with CNBC, Frontier CEO Barry Biffle said those decisions would be made by a committee chaired by Indigo Partners founder Bill Franke and that, "we will announce the headquarters, brand and management team in due course."