- Frontier Airlines just announced the groundbreaking merger with low-cost rival Spirit.
- An industry expert believes the combined entity will still offer low fares, as well as more destination options.
The $6.6 billion merger of low-cost rivals Frontier Airlines and Spirit Airlines is expected to shake up the industry, but consumers can still expect low fares, as well as more destination options, experts say.
On Monday, Denver-based Frontier announced the deal that would create the 5th-largest airline in the US. According to the carriers, the merger will be a win for consumers by combining both networks to offer over 1,000 daily flights to more than 145 destinations across 19 countries.
Frontier executives explained in a conference call with press that this would allow the airlines to establish new markets for travelers to fly to, particularly to cities that, independently, the carriers could not make work.
"Spirit is very strong in the east, Frontier very strong in the west, that's going to drive more customers onto our existing flights, meaning more low fares for more people," Frontier said. "A lot of small and mid-size communities will benefit from that ability to grow more."
Henry Harteveldt, analyst and president of Atmosphere Research Group, agreed with the airlines in terms of the network strategy.
"When you combine Frontier and Spirit, you will have a large coast to coast low-fare airline with extension international service into the Caribbean and Latin America," he told Insider. "You could have one low-fare airline that could take you to more places nonstop, or, in other cases, one stop in a hub."
"The combined airline may have the market strength to enter routes where perhaps it felt it couldn't compete, like mainland to Hawaii where they could inject a new level of price competition that we have not seen in a long time," he continued.
He also sees an opportunity for Frontier and Spirit to enter more routes focused on business travel. In regards to fares, Harteveldt believes the merger will still allow the airlines to keep prices low.
"Frontier and Spirit will still be a low-fare leader," he told Insider. "What we don't know is if they will be the absolute lowest price on a given route, versus, say, Allegiant. But I believe the combined airline will be less expensive at the base fare than competitors like Alaska, JetBlue, Southwest, or the three network airlines."
Kerry Tan, an associate professor of economics at Loyola University, said the larger operation will provide more flight frequencies, causing fewer travelers to be left stranded when there are flight disruptions.
"I expect an increase in the number of destinations from these locations as well as improved on-time performance with a larger fleet for the combined airline," Tan told Insider. "The issue with Frontier, in particular, is that they commonly service routes a few times a week so if your flight gets canceled, then the next flight won't be for a couple of days."
Harteveldt said he doesn't see a reason for the merger to be blocked by the Biden Administration, but the government should ask for certain conditions on approval.
"Neither Frontier nor Spirit has the greatest reputation for customer service," he told Insider. "One thing these airlines will have to address as part of the merger is to become more customer-focused. I think the Department of Justice would be right in saying if they let the merger go through, then they will have a close watch on the customer complaints."