Merger vote at Spirit could reshape discount airline market

The prospect of a takeover of Spirit Airlines threatens to upend the cheap-fare end of the industry much like a series of mergers among big airlines reduced choices for travelers. Spirit is the largest budget airline in the United States, but its days as a stand-alone company appear numbered. The big question is whether it is sold to fellow discounter Frontier Airlines or to JetBlue, which operates more like the four giants that dominate the US airline business. Late Wednesday, Spirit delayed a shareholder vote on a merger with Frontier from Thursday until July 8. Spirit said it would use the extra time to continue talking with Frontier and JetBlue Airways about their rival bids for Spirit. The outcome could determine how many choices travelers have for the lowest fares. That’s particularly important to leisure customers, the group that Spirit targets. Spirit shareholders are looking at a stock-and-cash offer from Frontier that is currently worth about $22 per share, or $2.4b, and would give Spirit shareholders 48.5% of the combined airline. Spirit’s board has continued to support the deal in the face of a hostile bid from JetBlue worth $33.50 per share, or $3.6b.<br/>