Bass, Berry & Sims attorney Michael Dashefsky outlined key potential concerns the Federal Trade Commission (FTC) may have regarding the announced planned merger between Frontier Airlines and Spirit Airlines. The proposed merger would create the country’s biggest ultra-low-cost carrier (ULCC) which would become the fifth-largest carrier in the United States. However, some industry insiders are questioning whether the proposed merger will pass the Biden administration’s recent antitrust push.
Michael doesn’t think the Department of Justice (DOJ) will be thrilled about the proposed mergers, saying, “if they want to block the merger, they’re probably going to face an uphill battle. Frontier and Spirit combined will be the fifth-largest U.S. airline, and they’ll account for just 5% or 6% of available seat miles combined, so it’s challenging to argue that the deal harms consumers. Much of their overlap is in Florida, where there’s already a lot of competition from other airlines.”
“Moreover, in airline mergers, DOJ usually looks at the impact on competition on a route-by-route basis — that is, for every nonstop route that both airlines fly, DOJ analyzes how many independent competitors will serve the route post-merger,” Michael added. “Frontier and Spirit might be among the only carriers that serve a few niche leisure routes, such as Orlando-Punta Cana, but in general, most of the routes that they both fly also have service from at least one of the major carriers. Travelers aren’t going to be without other options after the merger.”
Additionally, Michael said that “Frontier and Spirit are likely going to point out that, even after the merger, there will still be a lot of competition among the low-cost carriers — Southwest, JetBlue, Allegiant, Sun Country, and now Avelo and Breeze. If Frontier and Spirit want to raise prices after the merger, plenty of airlines will be poised to come in and try to expand on new routes.”
The full article, “Frontier-Spirit Airlines Merger May Test Biden Antitrust Mettle,” was published by Law360 on February 8 and is available online.