Wilmington-New Castle Airport - Delaware Business Times

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Frontier to merge with Spirit Airlines

Jacob Owens February 7, 2022

NEW CASTLE – Frontier Airlines, the only commercial service airline in Delaware, announced Monday that it has reached a nearly $3 billion merger deal with low-budget competitor Spirit Airlines. The merger would create a giant ...

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Economic Development, Government, Manufacturing, New Castle County, News, Transportation

Dassault may close New Castle hangar, offshore 130+ jobs

Jacob Owens December 6, 2021

NEW CASTLE – Dassault Falcon, the longtime private jet hangar operator at the Wilmington-New Castle Airport, may soon close the facility after a year of contentious negotiations with its employee union. The potential closure, first ...

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Government, New Castle County, News, Tourism, Transportation

New Castle Airport gets federal upgrade as flights grow

Jacob Owens November 30, 2021

NEW CASTLE – The Wilmington-New Castle Airport has been upgraded to a Primary Commercial Service Airport, entitling it to more federal funding, after Frontier Airlines surpassed 10,000 commercial passengers this year. The upgrade, announced by ...

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Insider Only, New Castle County, News, Transportation, Travel

🔒 How the president’s presence impacts New Castle Airport

Roger Morris August 17, 2021

NEW CASTLE – President Joe Biden’s well-documented history of commuting to and from work in Washington – recently upgraded from Amtrak to Air Force One – has focused a bright spotlight on Wilmington-New Castle Airport ...

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[caption id="attachment_188201" align="aligncenter" width="1200"] New Castle County Airport

New Castle County Airport

Frontier Airlines has reached a $2.9 billion merger deal with Spirit Airlines that would create a giant in the low-budget fares industry. | PHOTO COURTESY OF FRONTIER AIRLINES[/caption] NEW CASTLE – Frontier Airlines, the only commercial service airline in Delaware, announced Monday that it has reached a nearly $3 billion merger deal with low-budget competitor Spirit Airlines. The merger would create a giant in the low-budget airfare market, combining Colorado-based Frontier and Florida-based Spirit and creating the fifth largest airline by market share, company officials said. They intend to compete against the U.S. airline industry’s Big Four – Delta Air Lines, American Airlines, United Airlines and Southwest Airlines. Spirit currently ranks tied for fifth, while Frontier ranks ninth for market share, according to the federal Bureau of Transportation Statistics. Both Spirit and Frontier have ties to Indigo Partners, a private equity firm that targets the low-budget airline market and is currently the largest shareholder of Frontier. “We worked jointly with the board of directors and senior management team across both carriers to arrive at a combination of two complementary businesses that together will create America’s most competitive ultra-low fare airline for the benefit of consumers,” said William A. Franke, the chair of Frontier’s board and the founder and managing partner of Indigo Partners, in a statement announcing the deal. Franke previously served as chairman of Spirit from 2006 to 2013, and was involved in its initial public offering (IPO) in May 2011. He also oversaw Frontier’s IPO last year. Indigo Partners has also advised and invested in Tigerair in Singapore, Volaris in Mexico and Wizz Air in Europe. The merger is expected to close in the second half of 2022, subject to regulatory and Spirit shareholder approvals. Frontier shareholders, led by Indigo Partners, would control 51.5% of the company with Spirit shareholders controlling 38.5%. The new board of directors will include 12 directors, including the CEO, seven of whom will be named by Frontier and five of whom will be named by Spirit. Franke will be chairman of the board of the combined company, and he will lead a committee to determine its management team, branding and headquarters. [caption id="attachment_217872" align="alignleft" width="300"]

With Wilmington-New Castle Airport surpassing 10,000 commercial passengers this year, the airport will get additional federal aid. | PHOTO COURTESY OF DRBA[/caption] The combined airline is expected to offer more than 1,000 daily flights to more than 145 destinations in 19 countries. It will also add new routes to underserved communities across the United States, Latin America and the Caribbean while adding 350 aircraft on order to its fleet. The merger is estimated to save $1 billion annually for consumers through competitive route fares and redundancy reductions. By 2026, Spirit and Frontier expect to add 10,000 direct jobs and thousands of additional jobs at the companies’ business partners while retaining all 15,000 current staff members, officials said. The combined airline would have annual revenues of about $5.3 billion based on last year’s results. “We are thrilled to join forces with Frontier to further democratize air travel,” said Ted Christie, president and CEO of Spirit. “This transaction is centered around creating an aggressive ultra-low fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public. We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent guest service.” Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Spirit equity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own. This implies a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on Feb. 4, representing a premium of 19% over the Feb. 4 closing price of Spirit, and a 26% premium based on the 30 trading-day volume-weighted average prices of Frontier and Spirit. The transaction values Spirit at a fully diluted equity value of $2.9 billion, and a transaction value of $6.6 billion when accounting for the assumption of net debt and operating lease liabilities. Whether the merger will be approved by federal regulators, with the Biden administration taking a harder look at such mega-mergers under antitrust laws, remains to be seen. As of noon Monday, Spirit was trading at $24.70 a share – or lower than Frontier’s brokered purchase price – indicating that many investors may also be tepid about the chances of its approval. Frontier’s return to Delaware last year led to the Wilmington-New Castle Airport being upgraded to a Primary Commercial Service Airport, entitling it to more federal funding, after it surpassed 10,000 commercial passengers. The new designation is solely due to the return of commercial passenger service via Frontier last winter. The budget airline flies several times a week from New Castle to Orlando, growing from 635 passengers in February to a high of 1,689 passengers in July. From Feb. 11 to the end of November, Frontier booked 10,992 passengers through New Castle, according to Delaware River and Bay Authority data. Prior to Frontier’s return of service, Delaware was the only state in the nation to not have commercial air service of any kind. The merger with Spirit, and its greater resources, could allow Frontier to more easily expand service out of New Castle. Both Frontier and Spirit also have a larger presence at the Philadelphia International Airport.