What the Frontier-Spirit airline merger will mean for Texas travelers

Travelers flying out of DFW International Airport, Austin Bergstrom or Houston Intercontinental will have one less airline option if Frontier Airlines and Spirit Airlines are allowed to go forward with a $6.6 billion merger announced Monday. Denver-based Frontier plans to buy Miramar, Fla.-based Spirit in a cash and stock deal for $3 billion, a combination that would create the fifth largest airline in the country and set up a low-cost rival to the major network carriers in Delta, United, American and Southwest. The deal also includes assumption of debt and operating leases that raise the value to $6.6 billion. Spirt and Frontier flew more than 22,000 flights out of the six Texas airports last year and each has been ramping up with new routes as they try to wrestle market share from the major network airlines with hubs in the region. But there are questions about what will happen when you take one low-cost competitor out of the market in the Dallas, Houston and Austin areas. Travelers out of San Antonio, El Paso and Harlingen could see major changes with Frontier operating out of those airports.

Could the airlines cut frequencies that overlap? Will there be more destinations for Texas-originating travelers? What will happen to air fares with one of big low-cost carriers out of the picture? “There isn’t a significant amount of route overlap between the two companies,” said Helane Becker, an airline analyst with Cowen in a note to investors Monday. ”Both networks are domestic-centric, but Frontier tends to have more capacity in the western part of the US, Mexico and Central and South America while Spirit is focused on the eastern part of the US, the Caribbean, and Mexico and Central and northern South America.” The deal will undergo antitrust scrutiny as the Biden administration signals a tougher stance on big mergers. Frontier and Spirit contend the merger creates a stronger alternative to the four big carriers, which together control about 80% of the U.S. air travel market.