Frontier Airlines to merge with Spirit, creating 5th largest airline in the U.S.
ARI SHAPIRO, HOST:
One ultra-low-cost airline announced plans today to buy another. Frontier Airlines is offering to buy Spirit in a deal worth more than $6 billion. As NPR's David Schaper reports, if approved by federal regulators, the merger would create the nation's fifth-largest airline.
DAVID SCHAPER, BYLINE: If Spirit and Frontier are known for anything, it's their super-low fares. And the airlines say by combining, they'll be able to offer travelers even better deals, with a thousand daily flights to nearly 150 destinations. In a statement, Spirit CEO Ted Christie says the merger will create an aggressive, ultra-low-fare competitor, resulting in more consumer-friendly fares for the flying public. Frontier's CEO, Barry Biffle, told CNBC why he thinks this deal makes sense.
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BARRY BIFFLE: Everybody wins through this transaction. Consumers are going to win with a billion dollars in savings. Our shareholders win with 500 million in synergies. And our team members win with 10,000 more direct jobs in the next couple of years.
SCHAPER: But some consumer advocates aren't so sure.
WILLIAM J MCGEE: That's what they always say. That's what merging airlines have always claimed. And as we've seen, consolidation has not been good for consumers, and it's only reduced their choices.
SCHAPER: William J. McGee is Consumer Reports' adviser on airline issues. He says past airline mergers have often resulted in fewer flights to some cities, higher costs and poor customer service. And he says these particular airlines have among the industry's highest numbers of customer service complaints.
MCGEE: For example, Frontier generated more complaints in the first year of COVID over refunds on a per-passenger basis than any airline in the United States.
SCHAPER: And Spirit...
MCGEE: Spirit, of course, invented what the airline industry calls ancillary revenue. That is what we call nickel-and-diming with fees. They invented it in the United States. So every time you pay a baggage fee, you can thank Spirit for that.
SCHAPER: The proposed merger must be approved by the Justice Department, which, under the Biden administration, has taken a tough stance against some corporate consolidations and is expected to closely scrutinize this deal.
David Schaper, NPR News. Transcript provided by NPR, Copyright NPR.