How the Spirit-Frontier Merger will Impact the Industry

Feb. 8, 2022
AviationPros takes a look at how your airport may be impacted by the merger of two leading ULCCs.
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Spirt Airlines and Frontier Airlines recent announcement planning to merge is the arguably the largest shakeup to the North American ultra-low cost carrier (ULCC) market since it was created.

AviationPros spoke with international aviation lawyer Kenneth Quinn with Clyde & Co about the announcement and what impact it could have on the aviation industry across the U.S.  

Is the U.S. Department of Justice likely to approve this deal?

Yes. Quinn said there are significant market overlaps between the two carriers on about 132 routes. However, these are in predominately strong leisure markets like Orlando, Fort Lauderdale and Las Vegas where other strong competition exists. Even in locations of increased concentration by Spirit or Frontier, the market share is at highest 30 percent, Quinn said.

“DOJ will do a searching inquiry and the rhetoric has been to get tough on mergers and consolidations, but here it’s ULCCs trying to gain some economies of scope and size and greater power, but they would still represent less than 7 percent of the overall market,” he said. “They’ll put them though the ringer, but ultimately, they’ll survive and perhaps even thrive.”

How will Spirit and Frontier’s major operating airports be impacted?

They’ll likely see increased traffic. Quinn doesn’t see them abandoning existing hubs. They’re far from each other geographically serving unique destinations. Orlando, Las Vegas, Philadelphia, Atlanta, LAX and Detroit all stand to benefit.

“If anything, they’ll probably see increased traffic going transcontinental and you’ll probably see more traffic going down south to Florida because of Spirit’s good presence there,” he said. “While you have Sprit at BWI and Frontier out of DCA, they’re mainly serving west coast destinations. Frontier might try to increase traffic to south Florida at the same time, Spirit can see more east-west traffic and utilize that Denver hub.”   

Will Spirit and Frontier’s new training centers and MROs be impacted?

Not initially. Quinn said we’ll see an increase in traffic and deliveries with the combined airline. The two also have more than 300 aircraft on order. Demand will surge in the post-pandemic years. Quinn said they’ll look for synergies and efficiencies in maintenance down the line.

There needs to be more pilot training facilities opened overall in the industry to deal with the airline labor shortage, so don't expect those facilities to go away.

Will this change airline competition in the U.S.?

Yes. Quinn said the pandemic made legacy carriers focus on domestic travel and being more flexible with travel plans. Domestic travelers are seeing a large boost in customer service and the combined ULCCs will keep these airlines on their toes.