Hidden charges galore on your next cheap flight. Spirit and Frontier Airlines announce $6.6B merger.
Google and Android.
Disney/Pixar and Marvel.
Heinz and Kraft.
Exxon and Mobile.
And now... Spirit and Frontier?
Two of the top three most complained about airlines are joining forces to crate quite the fifth largest airline carrier in America.
Now behind American Airlines, Delta, United, and Southwest, the Spirit-Frontier merger has them over JetBlue and Alaska Air. Now this duo will be able to offer over 1,000 daily flights to almost 150 locations.
They may be one of the bigger ones, but they sure aren't one of the fan favorites. According to the US Department of Transportation. In 2021, Spirit had by far the highest number of passenger complaints, with 13.25 complaints per 100,000 passengers. Back in 2020, Frontier had by far the worst rate of complaints, when it recorded 60.24 complaints per 100,000 customers. What could go wrong?
This move seems smart, especially because of the massive hit the airline industry had during the pandemic. CNN Business stated that Spirit reported a 2021 loss of $440.6 million, excluding special items, such as federal assistance that went to all US airlines. That was an improvement from the $719.6 million it lost on that basis in 2020. Frontier reported it lost $299 million on that basis in 2021, roughly the same as in 2020.
The companies have yet to say what brand they'll fly under or who would lead management of the new airline. The combined company would offer more than 1,000 daily flights to over 145 destinations.
In investing news, both companies saw a nice little bump in the market, it could be a good opportunity to buy soon. The $6.6 billion value of the deal includes assumed debt, such as aircraft leases. The value of the stock and cash being exchanged would be $2.8 billion, based on Friday's closing price. Frontier would be the purchasing airline in this deal, as Spirit (SAVE) shareholders would receive 1.9126 shares of Frontier plus $2.13 in cash for each of their shares.
Photo: Google Finance