Could a merger between Frontier Airlines and Spirit Airlines be on the horizon?
“That’s my prediction,” stated the CEO of a rival low-cost airline in a conversation with Flying Frugal.
For years, speculation has circulated about the potential union of the top two budget airlines in the U.S.
Back in 2022, Spirit and Frontier initiated merger discussions, but Spirit ultimately opted to explore a partnership with JetBlue, which was subsequently blocked by the Biden administration in court.
In late 2022, The Wall Street Journal reported renewed acquisition discussions between the two airlines, but that deal fell through just days before Spirit announced its filing for Chapter 11 bankruptcy protection.
The financial struggles faced by Spirit — resulting from increasing debt, decreasing revenue, and various other challenges — reflected the broader difficulties experienced by budget airlines in recent times.
Increased Competition for Budget Airlines
Recently, budget airlines in the U.S. have struggled against larger legacy carriers that cater to travelers seeking long-haul international routes along with premium amenities like luxury cabins, flat seats, and lucrative frequent flyer programs that have greatly increased profitability post-pandemic.
Industry experts, including United Airlines CEO Scott Kirby, have predicted potential consolidation among budget airlines like Frontier and Spirit, known for their minimal base fares that often come with additional fees for inflight services.
During a recent interview with Flying Frugal, David Neeleman, CEO of Breeze Airways, expressed his views on the matter.
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“I believe both Spirit and Frontier will endure,” said Neeleman. “However, a merger would certainly ease their path forward.”
When asked if he envisions an imminent merger, he confidently replied, “Yes.”
So far, both airlines have refrained from commenting on any ongoing merger discussions. Additionally, it’s noteworthy that the incoming Trump administration may adopt a more lenient regulatory stance than its predecessor, potentially facilitating further consolidation efforts.
Budget Airlines Adopting Premium Features
Regardless, Neeleman echoed Kirby’s candid assessment of the competitive landscape facing U.S. airlines, highlighting United’s significant advantages compared to budget carriers like Breeze.
Kirby has consistently emphasized United’s “structural, permanent, and irreversible” benefits in the industry, similar to those of Delta Air Lines.
As major carriers have significantly reduced change fees and introduced their own budget-friendly basic economy fares, Kirby and others have raised questions about why travelers might choose to fly with budget carriers when similar fares are offered by full-service airlines.
Other executives in the budget sector have pushed back against fears of their industry’s decline.
“That’s amusing,” remarked Frontier CEO Barry Biffle in response to such claims during a recent interview with Flying Frugal.
However, Neeleman provided a slightly different perspective.
“Scott [Kirby] has found a way to make United’s offerings as appealing as those of Spirit, knowing that most passengers would prefer to fly United if given the option,” Neeleman explained.
“Currently, if you board a United Airlines [Boeing 737] MAX 9, it’s configured to meet passenger preferences,” he added, referring to United’s service levels from first class to extra legroom to more basic options.
This variety is also mirrored in the offerings of Delta and American Airlines, and similar developments are emerging in budget carriers as well. For instance, Frontier recently announced new first-class seating options, Southwest plans to introduce extra-legroom seats by 2026, and JetBlue aims to establish a domestic first-class cabin. (Neeleman is perhaps best known for founding JetBlue in 2000).
Breeze Airways Sees Opportunities
Currently, Neeleman perceives a chance for his latest airline, Breeze, established in 2021 amid the pandemic, to thrive based on travelers’ evolving preferences for additional space, premium seating, and more overall choices.
Since launching, this Utah-based airline has provided free baggage, Wi-Fi, and first-class-like reclining seats for travelers opting for its “Nicest” fares — a step up from the standard budget fares (“Nice”) for economical travelers.
“When I compete against those carriers,” said Neeleman regarding Spirit and Frontier, “we perform exceptionally well. People prefer to fly Breeze.”
Of course, increased competition may arise as more low-cost airlines start to offer extra space options. This dynamic is a significant reason why Breeze is “seriously contemplating” expanding the number of “Nicest” seats on its Airbus A220s, according to Neeleman.
“Initially, we had 24 first-class seats, then reduced it to 12, but we’re now really considering increasing that back to 16 due to high demand,” he explained, noting how easily the airline could adapt its fleet configurations.
Future Plans for International Flights
What about international travel?
Last time we spoke, Neeleman hinted at Breezes’ intentions to expand internationally, specifically linking this to long-term growth strategies centered around T.F. Green International Airport in Providence, Rhode Island (PVD).
Interestingly, Breeze’s competitor, Avelo — which also launched in 2021 — has begun offering flights to destinations in Mexico, Jamaica, and the Dominican Republic from Hartford’s Bradley International Airport (BDL) as well as North Carolina’s Raleigh-Durham International Airport (RDU).
According to Neeleman, delays in obtaining necessary approvals from the Federal Aviation Administration (FAA) are holding back Breeze’s international ambitions, but he anticipates these will conclude by the end of March.
“After that, we’ll be looking at destinations in Hawaii and the North Atlantic, mainly the British Isles and Ireland, among others,” he said.
But where will Breeze focus first?
“Mexico, the Dominican Republic, Jamaica, and similar destinations,” he noted.
Breeze currently boasts 280 nonstop routes — with no competition on a whopping 86% of them, as reported this month.
The airline anticipates its growth trajectory will continue into 2025, with data from aviation analytics firm Cirium indicating a projected 49% increase in first-half seat capacity compared to the same period last year.
The exact direction Breeze will take—whether focusing on international or domestic routes, or switching between economy and premium seating—remains uncertain amid a significant shift in passenger preferences. Stay tuned.
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