Originally Posted by
Lobaeux
I don't think he's too far off the mark here. Consolidation has been a constant for legacies, no reason to think the LCC/ULCCs aren't next.
I don't necessarily agree with the thought of a Spirit-Frontier merger, I don't think it offers anything to either side. A merger between a legacy and a LCC/ULCC is probably a little more realistic.
It offers quite a few things. Both are ULCC carriers and Franke in Indigo owned Spirit before it IPOed. Now indigo owns Frontier. It will probably IPO first and then the case can be made for a Fromtier/Spirit tie up. What's to say the end fleet plan of 130ish planes has to be all organic growth? Frontier and Spirit combined would be 100 planes off the bat with similar fleets but different engines. Combined I can see them being the ULCC work horse of the industry. In the same way I think jetBlue and Virgin will happen down the road. Same good product and service and at the end of the day probably necessary to compete with 4 legacy airlines. Right now it's a mess until AA/US get all sorted out and even UA/CAL has issues. Just wait until all 4 legacy airlines are done with their integration issues and operate like mean machines. Consolidation on the LCC level will be inevitable. Spirit, Frontier, Virgin, Jetblue, Alaska, Hawaiian, Allegiant.
As for your comments on a legacy and a LCC tie up, it seems that the DOT won't allow it. They didn't even want US/AA to merge unless serious concessions were made. They can easily argue that a legacy taking in a LCC is cuting out the LCC arena which means less competition and more power for the 4 legacy airlines. Not sure if the DOT would be ok with that.