We will ‘provide more low fares’

Let the charm offensive begin as Frontier Airlines (ULCC) looks to seal the deal on its mega-merger with fellow low cost operator Spirit Airlines (SAVE).

Part of that charm offensive will include the airlines tempering regulator concerns around potential future pricing for travelers should the businesses be combined.

“This merger will create a very large, low cost carrier with true nationwide capabilities and provide more low fares to more people and places. The facts just support that when left to our own devices, we actually have very low fares. So the idea that we would raise prices is just absurd. That would be like Walmart merging with a dollar store to raise prices. It’s just not going to happen,” Frontier Airlines CEO Barry Biffle said on Yahoo Finance Live.

Frontier Airlines and Spirit Airlines announced their $6.6 billion combination in February.

FORT LAUDERDALE, FLORIDA – FEBRUARY 07: A Spirit Airlines plane on the tarmac at the Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida. Spirit and Frontier Airlines announced a planned $6.6 billion merger to create America’s fifth-largest airline. (Photo by Joe Raedle/Getty Images)

If the two companies combine, the airline would be the fifth largest in the United States. It would mark the biggest major airlines deal since Alaska Airlines combined with Virgin America in 2016.

The merger has already come across the radar screen of far left Democratic Senators Bernie Sanders and Elizabeth Warren. Both fear the removal of a competitor in the marketplace could send airfare prices higher.

“For decades, the airline industry has been plagued by increasing consolidation, producing massive airline giants while leaving consumers and workers behind. Because the proposed Spirit-Frontier merger threatens to exacerbate these trends — including by potentially increasing prices during a period of high inflationary pressure — we urge the Department of Justice (DOJ) and the Department of Transportation (DOT) to closely review this mega merger for potential violations of the Clayton Act and for concerns under 49 USC § 41105 and to oppose it if you determine it will threaten competition in the airline industry or ‘the public interest,'” Warren, Sanders and several other lawmakers send in a statement.

Frontier’s Biffle said he understands the concern of regulators, but this time is different.

“Look, I don’t know that they are wrong. I think they are concerned on what has happened with past mergers, and we share that concern. That’s why this merger is so important today because this is different than anything else we have had in the past,” Biffle added.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance† Follow Sozzi on Twitter @BrianSozzi and on LinkedIn

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