Browsing Tag: Mergers

We thought those animals on the Frontier Airlines livery were just hanging around looking cute. Turns out they were biding their time, plotting. And now they’ve made their move.

Some cuties on on the tails of aircraft - Photo: Frontier Airlines

That otter definitely looks like the scheming type – Photo: Frontier Airlines

Frontier just announced its planned purchase of fellow ultra-low-cost-carrier Spirit Airlines. The result will be a low-cost juggernaut, ranking fifth in size among America’s airlines. One of our more prescient contributors, Steven Kimball, suggested this merger back in 2016. And from the airlines’ perspective the merger makes a lot of sense.

Obviously there’s the similarity in their approach to bare-fare pricing and bare-bones service. But also the all-Airbus narrowbody fleet, which will definitely contribute to a smoother merger and operational synergies. Both airlines operate the A320neo, and the new combined fleet will boast great fuel efficiency (cramming a ton of passengers into each plane also helps efficiency, I guess).

Image: Spirit Airlines

What’s the upshot for passengers? The airlines are trying to spin this as a positive, with Frontier loyalists getting better access to Spirit’s network in Central and South America, and Spirit-ers gaining more destinations in the western United States. The combined airline’s heft may help it better compete with the big four. At the same time, this means fewer individual airlines within the ULCC segment, which may drive up fares in that part of the market.

Also it’s no sure thing that the government will approve this plan. On one hand, the current administration has expressed a desire to keep inter-airline competition strong, and has been less friendly to mergers and partnerships. On the other hand, the administration is a little more embattled now and may not want to pick this fight. Or they may buy into the two airlines’ argument that a larger fifth player in the market is better for competition overall.

An Emirates A380 landing at Los Angeles Airport. Photo - Bernie Leighton | AirlineReporter

Emirates buying part of Qatar Airways? Yeah, no. – Photo: Bernie Leighton | AirlineReporter

I spend a lot of time on this place called the Internet. You’ve probably heard of it. I will admit that I dwell within the fringes and depths of it to find interesting aviation rumors and innuendo. Sometimes, however, they are so comical it just takes a look at Twitter to find some comedy gold. My friend Ben over at One Mile at a Time (you’ve heard of him)… well, he posted a summary of an article that he found on a paragon of virtue called Zerohedge saying that rumors were flying that Emirates sought a majority or, at least, a large stake in their rival down the track in Doha.

One of Qatar's two Oneworld 777s taken through the window of a QR A320 photo by Bernie Leighton | AirlineReporter.com

Qatar Airways has friends outside the gulf. What would they stand to gain? – Photo: Bernie Leighton | AirlineReporter

Now that you’ve stopped laughing the first time, let me just say that again. There are rumors that Emirates wants to purchase a large stake in Qatar Airways.

Let me put this in big bold letters so that I can give you a summary: EMIRATES WILL NEVER PURCHASE A LARGE STAKE IN QATAR AIRWAYS!!!!

Well, why not? I’m so glad you asked.