POLITICO Pro: Frontier-Spirit deal to face tough DOJ antitrust review
The proposed $6.6 billion merger between ultra low-cost carriers Frontier and Spirit Airlines will be a key test for President Joe Biden’s Justice Department, which has made greater competition in regulated industries like airlines a top priority.
The proposed deal announced Monday would combine the two airlines, currently No. 7 and No. 8 by traffic, into the United States’ fifth-largest by traffic. But antitrust experts warned that the deal — the first major airline merger proposed since Alaska Airlines and Virgin America joined in 2016 — will likely face a tough antitrust review by regulators who have taken a harder line on deals than previous administrations.
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DOJ will give intense scrutiny to the deal’s impact on consumers and route structures, which according to awebsite the airlines created that’s dedicated to the merger, would add new routes, more reliable service and $1 billion in consumer savings without specifying how that would be achieved.
But Sarah Miller, executive director of anti-monopoly advocacy group American Economic Liberties Project, said she doubted the claim about savings.
She said airline consolidation has been negative not only for consumers but also for economic growth as companies have reduced the available routes to some areas.
“If we want to see if airlines can get any worse for consumers, we could let this merger through,” she said. “It’s pretty hard for the bar to get any lower.”