Frontier, Spirit merger causes concern for lawmakers, interest groups

Frontier, Spirit Airlines Merger Monopoly Concerns Overview: 

• Who: A group of lawmakers and interest groups sent separate letters to the heads of the U.S. Department of Transportation and the antitrust unit of the U.S. Department of Justice expressing concerns over the $6.6 billion planned merger between Frontier and Spirit Airlines. 
• Why: The lawmakers and interest groups are concerned the merger could create a monopoly for the ultra-low-cost carrier market, among other things.
• Where: Frontier and Spirit Airlines are based in the United States.

A group of lawmakers and interest groups are asking to potentially block Frontier Airlines’ planned $6.6 billion acquisition of Spirit Airlines over concerns it could negatively impact workers and lead to higher prices and a reduced quality of service. 

Eight lawmakers, led by Sen. Elizabeth Warren, D-Mass., and Rep. Mondaire Jones, D-N.Y, expressed their concerns in a letter sent to the heads of the U.S. Department of Transportation (DOT) and the antitrust unit of the U.S. Department of Justice (DOJ)  on Wednesday. 

The lawmakers are asking for the deal between Frontier and Spirit to be examined to ensure it does not threaten competition in the airline industry or go against the best interest of the public. 

“For decades, the airline industry has been plagued by increasing consolidation, producing massive airline giants while leaving consumers and workers behind,” lawmakers said. “The proposed Spirit-Frontier merger threatens to exacerbate these trends — including by potentially increasing prices during a period of high inflationary pressure.”

Frontier, Spirit merger sold to public as way to increase low-cost flight competition

The merger between Frontier and Spirit was announced last month and publicized as a way for the two lower-cost airlines to be able to compete better against airlines such as United, American, Southwest, and Delta, Law360 reports. 

Once completed, the merger would enable the company to offer greater than 1,000 flights per day spanning 145 destinations in 19 different countries. 

Lawmakers, however, say the merger may not simply create a fifth major option for domestic air travel but could also monopolize the ultra-low-cost carrier sector.

“A merger between the two would result in a company that is four times larger than the nearest [ultra-low-cost] competitor, allowing Spirit-Frontier to dominate a sector that has grown significantly in recent years,” the lawmakers said.

Lawmakers also pointed to consumer satisfaction statistics that show Frontier and Spirit are “the two least-liked airlines in America” while expressing concerns that a merger between the two could make it easier to avoid dealing with customer concerns. 

A merger between Frontier and Spirit would also take a potential employer out of the airline industry that could ease the pressure on airlines to provide better compensation and work conditions. 

Interest groups, including the American Economic Liberties Project, echoed the sentiments of the lawmakers with their own letter to the DOT and DOJ in which they called for the merger to be banned.

“A merger between Spirit and Frontier Airlines, both ultra-low-cost carriers and head-to-head competitors, would destroy competition in the only competitive market segment of the highly consolidated airline industry,” the interest groups said.

In 2017, a class action lawsuit filed against Spirit Airlines claimed it tricked customers by adding on extra fees for services after initially promising a low airfare.

Have you flown on Spirit or Frontier Airlines? Let us know in the comments! 

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