Frontier and Spirit Airlines Plan to Merge

Spirit Airlines and Frontier AirlinesMonday announced plans to merge, a combination that would create the fifth-largest US airline by market share, putting pressure on the nation’s biggest carriers and raising concerns about further consolidation in an already-concentrated industry. The airlines, which offer 1,000 daily flights serving destinations in the United States, the Caribbean and Latin America, said in a statement that the merger would save consumers $1 billion annually, and that the airlines would not lay off employees because of it. They also said they expected to hire 10,000 workers by 2026 to add to their current combined total of 15,000. The deal could face pushback from the Biden administration, which has increasingly challenged such mergers and partnerships in court. In the fall, the Justice Department sued to prevent a domestic alliance between American Airlines and JetBlue Airways, arguing that the agreement would drive up prices and reduce competition. The US airline industry has undergone a tremendous amount of consolidation over the past two decades, with the nation’s four largest airlines controlling about 80 percent of the domestic market. Spirit and Frontier argue that the merger would allow them to better challenge those large carriers. But a deal would also create a giant budget airline that could smother smaller companies, including two recent entrants, Breeze and Avelo. “We basically have a four-firm oligopoly,” said Diana Moss, the president of the American Antitrust Institute, a left-leaning think tank and competition-law advocacy group. “Having this fringe of smaller carriers breathing down their necks is really the only thing left that keeps the Big Four on their toes.” Barry Biffle, Frontier’s CE, said the airlines had reached out to the Biden administration about the merger and expected it would be well received. He argued that the deal would allow the airlines to offer more cheap fares and better service.<br/>