Frontier, Spirit tie-up will face close US review - lawyers

A bid by budget carriers Frontier Group Holdings and Spirit Airlines to create the fifth-largest US airline will face close scrutiny from the Justice Department, lawyers said Monday. The Biden administration has made injecting more competition into US industries a key priority. Andre Barlow, an antitrust lawyer at Doyle, Barlow & Mazard, said in the "antitrust environment" the airlines would have trouble getting the deal past the department's Antitrust Division. "Given the administration's stance against mergers, it will be difficult for these two low-budget competitors to convince the antitrust enforcers that its merger will lead to lower prices," he said. Frontier and Spirit pledged to avoid any job losses and add 10,000 direct jobs by 2026. They also promised the merger would deliver $1b in annual consumer savings. "DOJ will focus on whether the two airlines overlap with respect to city pairs and whether the combination of two budget airlines would result in higher prices for consumers," Barlow said. Kenneth Quinn, a partner at Clyde & Co, said however that the DoJ would have a "hard time blocking this merger." "You've got two ultra-low-cost carriers with a common fleet without a lot of competitive city pair overlap," he said. The Justice Department sued in September to unwind American Airlines and JetBlue Airways "Northeast Alliance" partnership, arguing it seeks to eliminate "significant competition between a dominant airline and a uniquely disruptive competitor." The Justice Department declined to comment on the merger proposal. A White House spokesperson did not comment on the Frontier Spirit merger proposal but said the Biden administration "is committed to protecting competition across a wide range of industries for the benefit of consumers." <br/>