Spirit Airlines and Frontier Airlines have signed a merger agreement which will see the two companies combine to form a new airline.

The merger is expected to offer more ultra-low fares to travellers in destinations across the US, Latin America and the Caribbean.

Once combined, Frontier and Spirit forecast annual revenues of approximately $5.3 billion based on 2021 results.

Spirit’s president and CEO Ted Christie said: “We are thrilled to join forced with Frontier to further democratise air travel. This transaction is centred around creating an aggressive ultra-low fare competitor to serve our guest even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public.”

In a statement, the companies said the combined airline is expected to:

• Deliver $1 billion in annual consumer savings
• Offer more than 1,000 daily flights to over 145 destinations in 19 countries
• Expand with more than 350 aircraft on order
• Increase access to ultra-low fares by adding new routes to underserved communities
• Deliver more reliable services
• Expand frequent flyer and membership opportunities

Spirit’s chairman of the board Mac Gardner added: “This combination is all about growth, opportunities and creating value for everyone – from our guests to our team members to the flying public at large. We’re a perfect fit – our businesses share similar values, including our longstanding commitment to affordable travel.

“At the same time, we have complementary footprints and fleets, including one of the youngest and greenest fleets worldwide. Together, we will be even more competitive and we are confident we can deliver on the benefits of this combination to consumers.”

The merger is expected to close in the second half of 2022, subject to satisfaction of customary closing conditions.