Spirit Airlines and Frontier Airlines Plan Blockbuster Merger
The U.S. airline industry experienced a decade of merger mania between 2005 and 2013, as nine airlines combined into the four megacarriers that dominate the industry today. However, since American Airlines completed its merger with US Airways in late 2013, the consolidation drive has cooled off, largely due to growing pushback by antitrust regulators. Only one significant deal was completed between 2014 and 2021: Alaska Air's acquisition of Virgin America.
That might be about to change. On Monday, leading ultra-low cost carriers Spirit Airlines (NYSE: SAVE) and Frontier Group (NASDAQ: ULCC) announced plans to merge. Let's see what this means for the two budget airlines and their shareholders.
Frontier's chairman, Bill Franke, has been interested in merging Spirit and Frontier for nearly a decade. In 2013, while serving as chairman at Spirit Airlines, he tried to convince the company to buy Frontier Airlines. When that didn't happen, Franke resigned from Spirit's board and his Indigo Partners investment firm bought Frontier while unloading its entire stake in Spirit.
Source Fool.com
