No-frills airlines Spirit and Frontier have announced plans to merge, but what does that mean for customers who've been burned by the fee-happy carriers' poor service?
If the $6.6 billion merger is approved later this year, it would create the country's fifth-largest airline. Frontier would have a controlling stake in the company, but a name for the newly formed company has not yet been announced.
The airlines are so intent on joining forces that Spirit rejected a lucrative offer from JetBlue Airways: a cash offer of $33 per share plus an additional $200 million as a breakup fee if the deal couldn't go through because of antitrust reasons. Compared to the stock-and-cash deal with Frontier, now valued at $22.42 per share, JetBlue offered quite the enticing proposal, but it wasn't enough to sway Spirit.
Both Frontier and Spirit have struggled with a reputation for subpar customer service and are rated worse than most other airlines in categories like canceled flights, involuntary bumping, and customer complaints, according to the Wall Street Journal. Spirit and Frontier also ranked last and second to last in the 2021 American Customer Satisfaction Index. Not helping: incidents like Spirit's massive operational meltdown over the summer that led to thousands of cancellations.
Whether service will improve after a merger remains to be seen, though experts say it could mean flights become more reliable. Likely not going anywhere, they warn: The airlines' profitable model of charging fees for almost everything, from seat assignments to in-flight refreshments.
When it comes to fares, the companies are framing the merger as a win for customers since a larger company will be stiffer competition for carriers like Delta and Southwest. Experts say the new airline would have little to gain from raising fares dramatically. However, the merger will still mean fewer airlines for customers to choose from, which traditionally means bad news for prices.
