Spirit and Frontier Airlines just announced a merger worth $6.6 billion. The deal will create the fifth-largest airline in the U.S.
The Frontier-Spirit deal would mean a bigger competitor for other carriers, but also one airline fewer for travelers to choose from.
Without those key approvals, nothing is changing for customers, just yet. The airlines expect the deal to close in the second half of the year. They haven't decided on a new name or headquarters. Integrating an airline could take years. Samuel Engel, senior vice president at consulting firm ICF, said the benefit to travelers would come not just from lower fares from the combined airline but from how rival airlines respond to their newest competitor.
"It's not like you're going to see Spirit and Frontier go from offering $49 fares to $149 fares," said Henry Harteveldt, a former airline executive and founder of travel consulting firm Atmosphere Research Group. "The challenge is how do they continue to offer these low fares when upward cost pressures," he said.But combining could help the two airlines expand. "They would not, actually, be able to grow unless they merged," said Cowen & Co.
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