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Two of the leading budget airlines in the US, Frontier Airlines and Spirit Airlines, announced on Monday that they have agreed to merge.
The airlines, which together offer 1,000 daily flights serving destinations in the United States, the Caribbean and Latin America, said: in a statement they would save $1 billion a year from the merger without layoffs. They also said they expect to add 10,000 direct jobs by 2026 and create thousands more through partners.
They said the merger is expected to close in the second half of the year, subject to regulatory review and approval by Spirit shareholders. Frontier’s parent company Frontier Group Holdings, in which private equity firm Indigo Partners has a majority stake, approved the deal.
Under the merger agreement, Frontier shareholders will control 51.5 percent of the combined company and will elect seven of Frontier’s 12 board members. The board of directors will be chaired by William A. Franke, chairman of Frontier and managing partner of Indigo Partners. The companies said branding will be decided before the merger closes.
In the announcement, it was stated that the combined operation will generate approximately $5.3 billion in annual revenue based on the 2021 results.
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