Spirit and Frontier, the nation’s two largest Ultra-Low cost carriers (ULCC’s) have agreed to merge.
We’re going to dive much deeper into this topic in the next few days. But here are some quick takeaways.
- Spirit is based in Florida and is currently building a new HQ complex minutes away from Fort Lauderdale-Hollywood International Airport. Will the merged entity call Florida home, or will Frontier’s relatively new Denver HQ become the combined airline’s focus? Spirit already moved some call-center jobs from Florida to Tennessee last year. This is a big test for Ron DeSantis who fell short in efforts to get jetBlue to relocate to Florida fell short (US Senator Chuck Schumer was the chief culprit there, intervening at the 11th hour to keep that carrier based in New York). It’s also a big test for Broward County which isn’t exactly a place swimming with major corporate HQ’s.
- Frontier has a huge Florida route network which features a fair amount of overlap with Spirit. We will get into this more deeply in the coming days. Will the combined airline be focused on Florida or will we see some service reductions?
- Will fares increase as the two airlines networks are combined and they stop competing with one another?
- Both airlines feature all-Airbus fleets, so in terms of synergies that works. But is a large all-Airbus carrier in the interest of the US (I don’t care about this, as a free trader and someone skeptical of Boeing in general, I welcome the fleet choices of both Spirit and Frontier.)? Will DOJ and an increasingly protectionist US political community look down on a massive airline based in the US that flies only Airbus aircraft?
- The combined airline assuming little reduction in service levels would be the largest carrier in Orlando, Florida’s busiest airport as well as in Fort Lauderdale, the state’s third busiest airport. The combined carrier would be a clear number two in Miami, the state’s second busiest airport, giving American’s Miami mega-hub potentially some serious competition. All three of these airports are among the nation’s 20 busiest.
- At smaller Florida airports, the combined carrier would have less of influence. At Tampa International, the combined carrier would still likely be the 4th biggest. In Fort Myers, Jacksonville and West Palm Beach, similarly the combined airline would be further down the pecking order. So it’s really at Florida’s three largest airports this merger might adversely impact competition, or perhaps further stimulate it?
As stated above, we’ll get deeper into the merger, specific routes and airport considerations in the next few days.