The fifth largest US carrier is to be created with a $2.9 billion takeover of Spirit Airlines by rival ultra-low cost airline Frontier.
The proposal to form a new no-frills carrier controlled by Denver-based Frontier will bring claimed annual savings of up to $1 billion, subject to the deal gaining regulatory approval.
The combined group aims to run more than 1,000 daily flights to over 145 destinations in 19 countries, across complementary networks.
More than 350 aircraft are on order to add new routes to underserved communities across the US, Latin America and the Caribbean.
The combined company would have annual revenues of about $5.3 billion based on 2021 results.
William Franke, chair of Frontier and the managing partner of majority shareholder Indigo Partners, noted that Indigo has a long history with both Florida-based Spirit and Frontier.
“We worked jointly with the board of directors and senior management team across both carriers to arrive at a combination of two complementary businesses that together will create America’s most competitive ultra-low fare airline for the benefit of consumers,” said Franke, who is also chairman of Hungarian budget carrier Wizz Air.
The takeover is due to be completed in the second half of the year.
Spirit chief executive Ted Christie said: “We are thrilled to join forces with Frontier to further democratise air travel.
“This transaction is centred around creating an aggressive ultra-low fare competitor” which aims to “increase competitive pressure, resulting in more consumer-friendly fares for the flying public”.
He added: “We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent guest service.”
Frontier chief executive Barry Biffle told analysts: “In a competitive industry like ours, the lowest costs always win. These low costs will, in turn, enable us to keep our fares low for customers.”