Spirit Airlines Inc (NYSE:SAVE) and Frontier Group Holdings Inc (NASDAQ:ULCC) on Monday announced plans to join forces in order to create a more competitive, ultra-low fare airline.
Spirit and Frontier told investors that the planned merger will result in a stronger financial profile for the combined company, empowering it to accelerate investments in innovation and growth and compete even more aggressively in the airline space. So what does the business combination mean for existing customers of the low-cost airlines?
Related Link: Frontier, Spirit Airlines Agree To Merge In $6.6B Deal
What To Know: Both companies highlighted the expanded ultra-low fares the merger will bring, resulting in about $1 billion in annual consumer savings. The companies told customers that they expect to deliver a more reliable service, while increasing daily flights and destination totals. Spirit and Frontier also announced plans to expand loyalty and membership offerings for travelers.
"Until the transaction closes, it is business as usual for Spirit," said Ted Christie, president and CEO of Spirit Airlines. "There will be no immediate impact to ticketing or flight schedules, and you can continue to book and fly with Spirit as you always have."
Free Spirit members and cardholders will continue to earn and redeem points as usual, and all partner benefits will remain in place. Spirit Saver$ Club members will continue to receive access to exclusive fares and deals, Christie said in an email to Spirit customers.
Frontier president and CEO Barry Biffle also communicated much of the same information to Frontier customers via email.
All Frontier frequent flyers, cardholders and discount program members will continue to receive program benefits ahead of the closing of the transaction.
"You can continue to earn miles and save when you fly with Frontier," Biffle said. "Your existing miles and points will continue to be honored, and there will be no impact to your membership program."
The merger is expected to close in the second half of 2022. Upon closing of the transaction, existing Frontier shareholders will own approximately 51.5% of the combined airline and existing Spirit shareholders will own approximately 48.5%.
SAVE, ULCC Price Action: At time of publication, Spirit was up 17.3% at $25.49 and Frontier was up 3.83% at $12.87.
Photo: courtesy of Frontier.
