In the United States of America, a major merger is imminent among low-cost airlines, with Frontier and Spirit planning to merge to form the US's fifth-largest carrier. Over the weekend, the bodies of the two airlines have already given the green light.
The merger is valued at over $6,6 billion. Frontier Airlines is said to hold a majority stake of 51,5 percent in the future joint venture. Spirit will own the remaining 48,5 percent.
The two low-cost airlines have so far been considered fierce competitors, but subject to the approval of the competition authority, they want to go together in the future. "This transaction is focused on creating an aggressive ultra-low-fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for passengers," according to Spirit boss Ted Christie.
The future branding has not yet been decided
Spirit shareholders are to be paid out with 1.9126 Frontier shares. In addition, a cash settlement of US$2,13 is to be paid for each share certificate. As a result, Spirit is valued at $25,83 per share. According to the joint statement, this value should be 19 percent higher than the stock market value of the past week.
Since Frontier will be in control of the new joint venture, it's not surprising that Frontier CEO Bill Franke will be at the helm. He speaks of the two carriers becoming "the most competitive ultra-low-fare airline in the United States." Under which brand you will fly in the future is still open. A decision on this will only be made after the formal closing.
First, Spirit shareholders must accept the offer. The competition authority must then review and approve the merger. Franke currently expects the closing to take place around the second half of 2022.
Frontier and Spirit have over 400 open Airbus deliveries
If you look at the open orders of the two wedding candidates, they are quite significant. For example, Frontier has placed the following orders with Airbus: 74 Airbus A320neo, 168 A321neo and also holds purchase rights for 18 A321XLR. This is the opportunity to convert 18 A320neo orders into the long-haul variant of the A321.
Deliveries of the A321neo order are currently scheduled for the period from 2022 to 2029. The one for the A320neo machine type is already running and, according to the current state of affairs, should end in 2026. So the bottom line is that Frontier is waiting to take delivery of 242 brand new commercial aircraft.
Spirit Airlines is one of the few customers Airbus can boast of for the A319neo. The budget airline has ordered a total of 31 aircraft and intends to use them to replace the A319ceo fleet. They are also waiting for 26 A321neo and 62 A320neo. So the bottom line is 129 commercial aircraft.
Together, Frontier and Spirit expect to deliver 410 Airbus jets. The stated number only includes those that were ordered directly from the manufacturer. Both airlines obtain additional machines from lessors.
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