Frontier and Spirit by the numbers

What might a combination of these two airlines look like? We assembled data and created these charts to illustrate the potential outcome. This is not a comment on whether the combination will be successful; it is an attempt to represent the combined operations. The Market The two arrows highlight these two airlines as independents. They are big airlines by industry standards, but in the US, they are dwarfed by the competition. Remember, this is an economy-of-scale business. Bigger is almost always better. [caption id="attachment_89569" align="aligncenter" width="640"] US DoT; AirInsight[/caption] The chart shows that Spirit operates at stage lengths similar to the industry, while Frontier operates at slightly shorter stages. Spirit has higher load factors than Frontier. Fuel Burn The following chart shows the relative fuel burn for these two airlines compared to their primary segment competitors. [caption id="attachment_89571" align="aligncenter" width="640"] US DoT; AirInsight[/caption] Frontier has been updating its fleet faster and has the best fuel burn. Spirit has also been updating more slowly due to its financial stress. When we combine these two airlines, we see an ongoing trend of improving fuel efficiency. [caption id="attachment_89572" align="aligncenter" width="640"] US DoT; AirInsight[/caption] The improvement in fuel efficiency is driven by deploying the A321neo. Fortunately, both operate these aircraft with the same engine. Commonality is another key metric to save MRO costs. Operating Costs The primary goal when airlines merge is to seek synergies, and that focuses on cutting costs. Here are the independent and combined numbers for key metrics, [caption id="attachment_89574" align="aligncenter" width="640"] US DoT; AirInsight[/caption] The DoT data is through 3Q24 and shows the following for the most recent period. Frontier: ASM/Block Minute - 984; Flight Costs/Block Minute $86 Spirit: ASM/Block Minute - 984; Flight Costs/Block Minute $79 Combined: ASM/Block Minute - 984; Flight Costs/Block Minute $82 The combination does lower costs but by very little. There should be more as back office, spares, and MRO expenses are combined. The following chart summarizes costs per seat hour. [caption id="attachment_89575" align="aligncenter" width="640"] US DoT; AirInsight[/caption] The combination saves money, but the savings are small based on the history. The need to find synergies and cut costs is essential. Another set of data looks at cost per mile. Again, we don't see any significant savings. [caption id="attachment_89576" align="aligncenter" width="640"] US DoT; AirInsight[/caption] Conclusions In summary, if these airlines are allowed to merge, a lot of work is needed to squeeze out the savings required. Take a look at this chart. [caption id="attachment_89577" align="aligncenter" width="320"] US DoT; AirInsight[/caption] Combining the two airlines, we get the following. [caption id="attachment_89578" align="aligncenter" width="312"] US DoT; AirInsight[/caption] It looks like a very risky merger. There's probably no fat to trim without damaging muscle and bone. On the other hand, Frontier's management runs several ULCCs, and if anyone can pull this off, it would probably be them.

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
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