Originally Posted by
UnprotectdPilot
“Home of the Bear Fare”
I think the argument for a merger between Spirit & Frontier seems pretty obvious (e.g. massive ULCC, fleet type commonality, similar contracts, route overlap, etc.). There seems to be a consensus that the trajectory of the industry may lead to more consolidation. All that said, why wouldn’t a merger between Spirit + Frontier happen? I know this is all speculative, but it highlights the differences and potential trajectories of the companies.
My opinion from the Spirit side on why no merger
Spirit doesn’t need it. Plenty of ULCC volume for 2 ULCCs, we still make up such a small percentage of domestic travel.
Spirit competes with Legacy carriers more than other ULCC carriers. It’s AA out of ORD and DFW matching our fares, and UAL up in EWR trying to cause issues for gates. I’ve never heard management mention the battle against Frontier out of MCO, if anything, it’s SWA. Plenty of ULCC volume for 2 airlines.
Spirit is trying to tighten up their reputation and image and have been slowly doing that over the years. A merger makes that even more difficult.
Does Franke want to buy Spirit? Will Spirit buy Frontier after an IPO? Will Franke sell Frontier prior to IPO? I would say “nope” on all 3. Plus where does Spirit get the cash to buy Frontier after the year long diluting of our stock and the debt brought on with the pandemic and funding growth.
No merger. Not for the next 5 years.