Frontier to buy Spirit Airlines for $2.9 billion, form 5th-largest U.S. carrier

Feb. 7 (UPI) -- Frontier Airlines announced on Monday that it's buying low-cost carrier Spirit Airlines in a $3 billion deal that will create the nation's fifth-largest commercial airline.

Denver-based Frontier said it is buying Spirit for $2.9 billion in cash and stock. All told, the deal is worth $6.6 billion when accounting for newly assumed debt and other liabilities. The deal is expected to close by the end of 2022 and has been unanimously approved by the boards of both airlines.

Bill Franke, Frontier chairman of the board, will retain the title in the new company -- which will have 12 directors, seven named by Frontier and five by South Florida-based Spirit.

"We are thrilled to join forces with Frontier to further democratize air travel," Spirit CEO Ted Christie said in a statement.

It's unclear if the new carrier will retain the Frontier name, or will operate under a new brand. File Photo by Bill Greenblatt/UPI

"This transaction is centered around creating an aggressive ultra-low fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure."

The companies said they expect the merger to create $1 billion in savings per year for travelers, as the combined company will expand with more than 350 new planes and new routes.

"The combined airline will have the youngest, most modern and fuel-efficient fleet in the United States," the companies said in a statement.

The merger is subject to regulatory approval, which isn't a guarantee. In September, the Justice Department filed a lawsuit to stop an alliance between American Airlines and budget carrier JetBlue for flights in the Northeast over antitrust concerns.

It's unclear if the new carrier will retain the Frontier name, or will operate under a new brand. The new airline will be the fifth-largest in the United States, after American, Delta, United and Southwest.