Frontier fights to become nation's fifth-largest air carrier
Denver-based Frontier Airlines' well laid-out plans to become the fifth-largest air carrier in the country could be in free fall.
What's happening: The $2.9 billion merger between Frontier and Spirit Airlines, announced in February, is under siege after JetBlue Airways made an unsolicited, $3.6 billion bombshell bid last week for the budget air carrier.
- The all-cash offer is at a 33% premium to Frontier's cash-and-stock offer, and Spirit said it is now evaluating the proposal.
Why it matters: The offer threatens to foil Frontier's goal of creating a budget airline powerhouse that could more aggressively compete with industry giants and pressure those carriers to lower prices nationwide.
What they're saying: If JetBlue's wins, it "would lead to more expensive travel for consumers," Frontier said in a statement. "In particular, the significant East Coast overlap between JetBlue and Spirit would reduce competition and limit options."
- Frontier added it was "surprising" that JetBlue would consider the deal amid a lawsuit from the Justice Department over an alliance between JetBlue and American Airlines that lets the companies sell each other's seats on certain regional flights.
The other side: Colorado Attorney General Phil Weiser last month urged federal regulators to investigate Frontier's proposed merger with Spirit on grounds that the consolidation could be bad for consumers and workers.
- "Both airlines have poor records regarding customer service, and should the merger between the airlines be approved, there is a real and pressing risk that the unfair treatment our state's residents have faced from Frontier may worsen," Weiser said in a statement.
What to watch: Either deal will require approval from federal antitrust regulators, who under President Biden have been "emboldened to challenge deals that might have sailed through in previous administrations," the New York Times reports.
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