Is there another airline merger in the works?
There have been rumors and whispers for the past 6 months that the ultra-low cost airline Spirit has been interested in merging with Denver based Frontier Airlines. Over the past few months a number of articles have been pointing in that both airlines are heading in that direction. A few days ago another article popped up point in this direction.
So, how did all this come about?
Well, the first point was that the previous owner of Spirit Airlines – Indigo Partners, sold their stake in Spirit and then almost immediately purchased the (at the time) failing Frontier Airlines. This action obviously caused quite a stir.
Next, Indigo partners group began implementing the “fundamental” changes they saw fit for Frontier to remake them into an ultra-low cost carrier and create a healthy bottom line for the future. A new order for aircraft was placed for over 100 new NEO type frames, all Airbus type aircraft – a commonality that both Frontier and Spirit Airlines share. Yet, one of the most interesting things to happen recently is with Frontiers new model of operation, Frontier has now stolen the title of “highest complaints” from Spirit Airlines!
What happens if they merge?
Well, the first consideration is that the DOT and the Justice Department would have to approve such a merger. Considering the number of large airline mergers that have happened over the past 10 years this might not actually be an issue. Most of the routes that each airline flies is independent of the other and only on a handful of routes can we find both carriers operating, albeit usually the service is not operated daily where the two overlap.
Our friends over at Seeking Alpha have put together a route map of what the combined carrier would look like.
If the merger should take place it would mean the combined carrier would have a 75% increase in size. The merged carriers – combined with their aircraft now on order would put it almost rivaling that of the current size of JetBlue Airways, the second largest low fare carrier behind the behemoth low fare carrier Southwest Airlines.
That means lots of low fares on many new routes, the question is, with all the nickel and diming of their customers under their model, would you still fly them?