Frontier and Spirit create the fifth largest airline in the United States

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Frontier and Spirit come together creating the fifth largest airline and the ultra low cost most important of those of USA.

Together, Frontier and Spirit Airlines hope to change the industry for the benefit of consumers, bringing more ultra-low fares to more travelers in more destinations in the USA, Latin America and the Caribe, including major cities and underserved communities. The combined company's stronger financial profile will allow it to accelerate investment in innovation and growth and compete even more aggressively., especially against the dominant “Big Four” airlines.

William A. Franke, Chairman of the Board of Frontier and Managing Partner of Indigo Partners, the majority shareholder of Frontier, noted that Indigo has a long history with Spirit and Frontier, and is proud to partner with them to create a disruptive airline.

“We are working together with the Board of Directors and the senior management team of both airlines to arrive at a combination of two complementary businesses that together will create the most competitive ultra-low fare airline in the United States for the benefit of consumers”.

Mac Gardner, chairman of the board of directors of Spirit commented:

“This combination has to do with growth, opportunities and value creation for all, from our guests to our team members and the general public”. “We fit perfectly: our companies share similar values, including our long-standing commitment to affordable travel. At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets in the world. Together, we will be even more competitive ».

The benefits of the union of Frontier and Spirit Airlines

The combined airline is expected:

• Deliver $1 billion in annual savings for consumers.
• Offer more than 1000 daily flights to more than 145 destinations in 19 countries and with 650 direct flights.
• Expand to more than 350 planes to offer more ultra-low fares.
• Increase access to ultra-low fares by adding new routes to underserved communities in the United States, Latin America and the Caribbean.
• Provide even more reliable service through a variety of operational efficiencies.
• Expand frequent flyer and membership offers.

More employment

• For 2026, Spirit and Frontier hope to add 10,000 direct jobs and thousands of additional jobs in the companies' commercial partners.
• Given the growth, All current team members are expected to have the opportunity to be part of the combined airline.
• Team members of the combined airline will have greater career opportunities and more stability as part of the most competitive ultra-low-fare airline in the United States.

The greenest airline in the United States

Frontier and Spirit will be America's greenest airline, providing domestic access to sustainable, affordable air travel. Combined airline will have youngest fleet, modern and fuel-efficient, with the largest fleet of A320neo family aircraft of all airlines in the country.

Frontier and Spirit shareholders also win

• On a combined basis, The company would have annual revenues of approximately $5.3 billion based on the results of 2021.
• Once combined, Frontier and Spirit expect to generate annual run rate operating synergies $500 million once full integration is complete, which will be driven primarily by scale efficiencies and procurement savings across the company with approximately $400 millions in one-time costs.
• The combined airline is expected to have a strengthened financial profile, with a cash balance of approximately $2400 million at the end of 2021 in combined form.

Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Spirit shareholders will receive 1,9126 Frontier stock plus $2,13 in cash for each existing Spirit share they own. This implies a value of $25,83 per Spirit share at the closing price of Frontier shares of $12,39 the 4 February 2022. Frontier and Spirit Volume Weighted Average Prices - Day. The transaction values ​​Spirit at a fully diluted equity value of $2,900 million and a transaction value of $6,600 million when accounting for the assumption of net debt and operating lease liabilities.

At the closing of the transaction, existing Frontier shareholders will own approximately 51,5 % and existing Spirit shareholders will own approximately 48,5 % of the combined airline, on a fully diluted basis, which will provide Frontier and Spirit shareholders with substantial growth potential.

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