Two of America’s biggest budget airlines have announced a merger

2022-06-27 0 By

Xinhua News Agency New York, February 7 (Reporter Liu Yanan)Frontier Airlines and Spearitt Airlines have signed a binding agreement to merge, frontier Airlines and Spearitt Airlines said in a joint announcement Wednesday.The deal is valued at $6.6 billion and the combined company aims to become the most competitive ultra-low fare airline in the United States, the announcement said.The new company will expand its service to smaller US cities and plans to add 10,000 direct jobs by 2026.The combined company is expected to have annual operating revenue of about $5.3 billion, and the merger will provide $500 million in annual synergies in terms of scale and procurement, improving the company’s financial position, the statement said.The merger, which has been approved by the boards of both companies, is expected to close in the second half of 2022.Frontier Chairman William Frank will become chairman of the combined company.Frontier Airlines and Sprit Airlines posted consecutive losses in 2020 and 2021, and their expenses increased significantly in 2021, according to their respective earnings reports released on Wednesday.According to data released by the U.S. Department of Transportation, delta, American, United and Southwest — the top four airlines by revenue — accounted for more than 75 percent of the industry’s total operating revenue in 2020, while Frontier and Spearet accounted for 1.6 percent and 2.4 percent, respectively.(after)