Breeze Airways CEO Expects Spirit and Frontier Airlines to Retry Merger

In the ever-evolving landscape of U.S. aviation, mergers and acquisitions are always on the radar. One of the most anticipated and closely watched in recent years was the proposed merger between Spirit Airlines and Frontier Airlines. Though the initial deal fell apart in 2022 after JetBlue Airways swooped in to acquire Spirit, David Neeleman, CEO of Breeze Airways, believes that Spirit and Frontier may soon revive their merger talks.

As competition tightens and the push for low-cost travel grows, Neeleman’s prediction raises questions about the future of the ultra-low-cost carrier (ULCC) market in the U.S. aviation industry. Will Spirit and Frontier try again to join forces, and what could this mean for the industry if they do?

Why the Spirit-Frontier Merger Matters

The idea of Spirit Airlines and Frontier Airlines merging wasn’t just another business deal. It was a proposal that could have created one of the largest low-cost carriers in the United States. Both airlines target price-conscious travelers with no-frills service, making them key players in the growing ULCC sector.

Had the merger gone through, the combined airline would have boasted a much larger network and had more leverage to compete with larger players like Southwest Airlines and JetBlue Airways. The goal was to create a low-cost powerhouse with a nationwide presence, offering even more affordable options for travelers seeking budget-friendly fares.

The failure of the merger allowed JetBlue to step in and acquire Spirit, but according to Neeleman, this may not be the end of the story for Frontier and Spirit.

David Neeleman’s Perspective

As the CEO of Breeze Airways—a relatively new airline that also operates in the budget sector—David Neeleman is no stranger to competition and consolidation in the industry. Neeleman has a deep understanding of the aviation business, having founded several airlines, including JetBlue Airways, WestJet, and Azul Brazilian Airlines. His insights into the industry often reflect broader trends.

Neeleman believes that despite the challenges Spirit and Frontier faced with their initial merger attempt, the two airlines could find themselves back at the negotiating table sooner rather than later. According to Neeleman, the economic environment for low-cost carriers remains ripe for consolidation, and Frontier’s ambitions for growth could drive them to revisit the merger idea.

Key Factors Driving the Potential Retry

1. Competition in the ULCC Space The ULCC market is highly competitive, with both Spirit and Frontier vying for the same pool of budget-conscious travelers. By merging, the two airlines could better compete against Southwest and JetBlue while avoiding overlapping routes and reducing costs through economies of scale.
2. Spirit’s New Position Under JetBlue Now that Spirit has been acquired by JetBlue, it will soon undergo changes that may shift its position in the market. JetBlue plans to enhance Spirit’s service offerings, but that could leave space in the ULCC market for a player like Frontier to expand aggressively. If Spirit moves slightly upmarket under JetBlue, Frontier may see the advantage of acquiring another ULCC to retain dominance in the low-cost space.
3. Frontier’s Ambitions Frontier has made it clear that it still has ambitious growth plans despite the failed merger. Combining forces with another ULCC could help Frontier accelerate its expansion. The airline’s CEO, Barry Biffle, has expressed frustration over the deal’s collapse but has not ruled out future opportunities for growth through consolidation.
4. Shifting Economic Conditions The post-pandemic travel surge has been a mixed blessing for airlines. While demand is high, costs, particularly fuel prices and labor, continue to rise. A merger between Frontier and another carrier could help lower costs by combining resources, increasing negotiating power with suppliers, and optimizing fleet usage.

The Competitive Landscape

Should Spirit and Frontier revisit their merger discussions, the impact on the U.S. aviation landscape would be significant. Here are a few potential outcomes and challenges if they move forward with a renewed merger bid:

1. A Stronger Low-Cost Competitor

If Frontier merges with another low-cost carrier, it could become a major force in the ULCC market. With expanded routes, a larger fleet, and combined resources, the new airline could offer travelers more budget options. This would increase pressure on other players like Allegiant Air and even Southwest, which is a low-cost airline, though not technically an ULCC.

2. Regulatory Hurdles

A Spirit-Frontier merger faced regulatory scrutiny the first time around. Regulators raised concerns about reduced competition, especially for price-sensitive travelers. Although the merger didn’t materialize, a retry could still face similar obstacles. The Department of Justice (DOJ) and other regulators would likely examine the deal closely to ensure it doesn’t limit choices for consumers or result in higher fares.

3. JetBlue’s Role

With Spirit now part of JetBlue, the merger landscape has changed. JetBlue and Frontier will compete directly in some markets, which could shape the structure of a potential Frontier-ULCC deal. It’s unclear whether JetBlue’s acquisition of Spirit will leave Frontier more aggressive or prompt a strategic partnership with another ULCC.

4. Impact on Passengers

For budget-conscious travelers, a merged ULCC could be a win, offering more low-cost options across a broader network. However, consolidation can also lead to fare increases if competition decreases. For passengers, the outcome of a renewed merger attempt would largely depend on how well the combined airline maintains low fares while increasing efficiency.

What’s Next for Frontier and Spirit?

While nothing is official yet, David Neeleman’s comments have sparked renewed speculation about consolidation in the ULCC market. Frontier may see an opportunity to revisit the merger idea, especially as Spirit undergoes its integration with JetBlue. If Frontier decides to pursue a deal, it will likely focus on acquiring another ULCC rather than competing head-to-head with JetBlue.

For now, Breeze Airways continues its growth trajectory under Neeleman’s leadership, while keeping a close eye on how the Spirit-Frontier situation evolves.

Conclusion

As the aviation industry continues to evolve, mergers and acquisitions will remain central to the competitive landscape. According to Breeze Airways’ David Neeleman, the idea of a Spirit-Frontier merger may not be dead just yet. With changing economic conditions, shifting market dynamics, and the ongoing growth of the ULCC sector, the opportunity for Frontier to retry a merger remains a possibility.

Should Spirit and Frontier revisit the idea of joining forces, it could reshape the low-cost market, bringing new opportunities—and challenges—for travelers and competitors alike.