A PYMNTS Company

Democrats Speak Against Budget Airline Merger

 |  March 13, 2022

Several congressional Democrats are warning that the proposed combination of Frontier Airlines and Spirit Airlines would reduce competition among low-cost carriers and drive up fares during a time of inflation.

The lawmakers said previous mergers have hurt consumers and workers, and if Frontier and Spirit ever drop their budget-carrier business model, the industry “would lose an important check on prices.”

Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, D-Vt., along with Rep. Alexandria Ocasio-Cortez, D-N.Y., and five others urged Transportation Secretary Pete Buttigieg and the head of the Justice Department’s antitrust division to review the merger closely for potential violations of antitrust law, and consider acting to stop it.

The federal agencies declined to comment Friday beyond saying they had received the letter.

The Biden administration has signaled that it will scrutinize mergers more closely to promote competition. In September, the Justice Department sued to block a partnership in which American Airlines and JetBlue Airways agreed to work together in the Northeast. The Trump administration had allowed that deal to go through.

Frontier and Spirit announced last month that they would combine in a $2.9 billion deal to create the nation’s fifth-largest airline by passenger-carrying capacity. Denver-based Frontier would have a controlling share.

They say their deal would help consumers by creating a more powerful low-cost competitor to American, Delta, United and Southwest, which together control about 80% of the US air-travel market.

The companies also pledged to avoid any job losses and add 10,000 direct jobs by 2026. They also promised the merger would deliver $1 billion in annual consumer savings and offer more than 1,000 daily flights to over 145 destinations.

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.