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Spirit, Frontier Airlines ... and talks of a merger?

Frontier Airlines and Spirit Airlines, the two largest budget airlines in the U.S., have decided to merge

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A Frontier Airlines jetliner taxis to a runway to take off from Denver International Airport Thursday, April 23, 2020, in Denver. Frontier Airlines’ parent company is buying Spirit Airlines in a $2.9 billion cash-and-stock deal that will allow the combined airline to be more competitive against its larger rivals.

David Zalubowski, Associated Press

The two largest low-cost airlines in the U.S. — Spirit and Frontier — have agreed to merge, creating what would be the fifth-largest airline in the country.

Per Fox News, Denver-based Frontier Airlines is buying Spirit in a deal valued at $6.6 billion, giving Frontier a 51.5% controlling stake.

“In a competitive industry like ours, the lowest costs always win,” Frontier Chief Executive Barry Biffle told analysts, per Reuters. “These low costs will, in turn, enable us to keep our fares low for customers,” adding that they will also provide more destination options in the U.S., Latin America and the Caribbean.

The companies pledged to add 10,000 direct jobs before 2026 and offer more than 1,000 daily flights over 145 destinations. They also anticipate $1 billion in annual consumer savings.

Per CNBC, both companies approved the deal over the weekend, making it the first merger of major U.S. airlines since Alaska Airlines combined with Virgin America over six years ago.

Details such as the new name, the CEO and the location of the headquarters aren’t revealed yet but they will be answered once the transaction closes in the second half of the year.

According to the report, the news pushed Spirit’s shared to surge 14% on Monday morning, while Frontier’s went up by only 1%.