Cloud joins the Frontier Airlines fleet

Aviation Capital Group has this week announced the delivery of one new Airbus A321neo aircraft on long-term lease to Frontier Airlines. Powered by the ultra-efficient Pratt & Whitney GTF engines, this is the sixth of seven A321neo aircraft scheduled to deliver to the airline from ACG’s order book with Airbus. Traditional to Frontier Airlines, this A321neo will unveil a new special livery with “Cloud, THE THREE-WATTLED BELLBIRD” painted on the tail.

The latest results from Frontier Airlines have been released....

Frontier Group Holdings, the parent company of Frontier Airlines, has this week reported financial results for the second quarter of 2023 and issued guidance for the third quarter and full year 2023.

Second Quarter 2023 Summary:

Achieved total operating revenues of $967 million, six percent higher than the 2022 quarter

Cost per available seat mile ("CASM") improved 20 percent over the 2022 quarter

Adjusted CASM (excluding fuel), a non-GAAP measure, improved five percent over the 2022 quarter

Realized a pre-tax margin of 9.1 percent, a post-pandemic record

Generated ancillary revenue of $80 per passenger, $5 higher per passenger than the 2022 quarter

Utilization averaged 11.5 hours per day

Ended the quarter with $780 million of unrestricted cash and cash equivalents

Took delivery of three A321neo aircraft during the second quarter, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 75 percent as of June 30, 2023, the highest of all major U.S. carriers

Generated 103 available seat miles (“ASM”) per gallon, reaffirming Frontier's position as the most fuel-efficient of all major U.S. carriers and its ongoing commitment to being “America's Greenest Airline” as measured by ASMs per fuel gallon consumed

Executed an agreement with CleanJoule to purchase up to 30 million gallons of sustainable aviation fuel, further demonstrating the Company's commitment to reduce carbon emissions in air transportation

Launched 26 new routes during the quarter, including new routes from Atlanta, Baltimore, Chicago Midway, Cleveland, Detroit, Houston, Orlando, San Juan, St. Thomas and Tampa, giving customers greater access to Frontier's Low Fares Done Right

“Results this quarter reflect strong execution by Team Frontier. Our earnings before tax delivered our highest post-pandemic, pre-tax margin on 36 percent capacity growth and 35 additional aircraft compared to the 2019 quarter, and we delivered a five percent improvement in non-fuel adjusted unit costs over the prior year quarter," commented Barry Biffle, President and CEO. "I'm proud of the strong work ethic of Team Frontier employees as we managed through the challenging conditions presented by June weather. We are focused on delivering Low Fares Done Right, including sustaining our cost advantage over the industry as we grow the airline.”

Frontier took delivery of three A321neo aircraft during the second quarter of 2023, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 75 percent as of June 30, 2023, the highest of all major U.S. carriers. The A321neo is expected to unlock meaningful scale efficiencies by way of fuel savings and higher average seats per departure. As of June 30, 2023, approximately 70 percent of future committed aircraft deliveries, including direct leases, are for A321neo aircraft. As of June 30, 2023, the Company had commitments for an additional 222 aircraft to be delivered through 2029, including purchase commitments for 67 A320neo aircraft and 150 A321neo aircraft as well as commitments for another 5 A321neo aircraft through direct leases.

Air101: Frontier Airlines gets another new Airbus A321neo on lease from Aviation Capital Group.

Frontier Airlines gets another new Airbus A321neo on lease from Aviation Capital Group.

Aviation Capital Group announced today, the delivery of one new Airbus A321neo aircraft on long-term lease to Frontier Airlines. Powered by the ultra-efficient Pratt & Whitney GTF engines, this is the fifth of seven A321neo aircraft scheduled to deliver to the airline from ACG’s order book with Airbus. Traditional to Frontier Airlines, this A321neo will unveil a new special livery with “Wilhelm, THE STELLER’S EIDER” painted on the tail.

Frontier Airlines get another Airbus A321neo......

Frontier Airlines has taken a new Airbus A321neo jet on a long-term lease from the aircraft leasing giant Aviation Capital Group LLC.  The super fuel efficient Airbus aircraft is powered by the Pratt & Whitney GTF engines and is the third of seven A321neo aircraft scheduled to be delivered from ACG’s order book with Airbus. Traditional to Frontier Airlines, this A321neo will unveil a new special livery with “Sierra The Bighorn Sheep” painted on the tail.

Aviation Capital Group is one of the world’s premier full-service aircraft asset managers with approximately 470 owned, managed and committed aircraft as of December 31, 2022, leased to roughly 95 airlines in approximately 45 countries. It was founded in 1989 and is a wholly owned subsidiary of Tokyo Century Corporation. 

Frontier Airlines selects CAE for next-generation flight operations software

Frontier Airlines selects CAE for next-generation flight operations software

CAE Flight Operations Solutions announced that it has signed a 10-year agreement to equip Frontier Airlines with CAE's next generation of flight operations solutions. With implementation scheduled to begin later this year, CAE's cloud-based Operations Control, Crew Management and Flight Management solutions will support Frontier with the latest and most feature-rich operations software available today.

Frontier Airlines becomes the latest airline in North America to move to CAE's portfolio of next-generation solutions - the first since the acquisition of the Sabre AirCentre business in February 2022. CAE's solutions will enable Frontier to take advantage of the latest-available technology, driving step-change improvements in performance over legacy software in the optimization of flight plans, aircraft usage, and crew communication and engagement.

"We are thrilled to partner with CAE and begin integrating the latest versions of their industry-leading, comprehensive software solution," said Brad Lambert, Vice President, Flight Operations, Frontier Airlines. "As we have seen in the industry over the last few years, updating core operational software is imperative to optimize flight operations, identify flight planning efficiencies and more quickly manage disruptions and recovery."

Frontier Airlines reported strong revenue performance in the fourth quarter.

Frontier Group Holdings - the parent company of Frontier Airlines, Inc., today reported profitable results for the fourth quarter of 2022 on strong revenue performance, including record ancillary revenue per passenger, and an improvement in unit costs.

Fourth Quarter 2022 Highlights

• Achieved total operating revenues of $906 million, 38 percent higher than the 2019 quarter on 15 percent higher capacity resulting in a 21 percent increase in revenue per available seat mile ("RASM") over the same period
• Generated record ancillary revenue of $82 per passenger, 41 percent higher than the 2019 quarter and five percent higher than the prior quarter
• Since exiting the pandemic, realized the lowest cost per available seat mile ("CASM") of 9.93 cents, CASM (excluding fuel), a non-GAAP measure, of 6.43 cents, and adjusted (non-GAAP) CASM (excluding fuel) of 6.40 cents
• Realized a pre-tax margin of 5.5 percent and an adjusted (non-GAAP) pre-tax margin of 5.7 percent
• Ended the quarter in a strong liquidity position with $761 million of unrestricted cash and cash equivalents, or $332 million net of total debt
• Took delivery of two A320neo and three A321neo aircraft during the fourth quarter, increasing the proportion of the fleet comprised of the more fuel-efficient A320neo family aircraft to 72 percent as of December 31, 2022, among the highest of all major U.S. carriers
• Generated 103 available seat miles ("ASM") per gallon, making Frontier the most fuel efficient of all major U.S. carriers and affirming its ongoing commitment to being "America's Greenest Airline"
• Expanded service in 16 domestic markets, including six new routes from Phoenix Sky Harbor International Airport to coincide with the November 2022 opening there of a crew base, and six international markets
• Announced new Dallas-Fort Worth crew base expected to open in May 2023 along with five new routes
• Launched GoWild All-You-Can-Fly Pass, providing passengers an opportunity for an unlimited number of flights to all Frontier domestic and international destinations

“Fourth quarter results were strong, underpinned by record ancillary revenue and meaningful improvements in CASM and utilization," commented Barry Biffle, President and CEO. “Moving into 2023, we intend to bolster our competitive edge by driving further improvement in ancillary revenue per passenger and unit costs. Today, our total cost advantage over the industry average is wider than it was in 2019, and I expect it will widen further this year. With these contributing factors, I'm confident we're on track to return the airline to the pre-pandemic profit levels per plane on a run-rate basis in the second half of 2023.

"I'm extraordinarily proud of Team Frontier for their tireless contributions in 2022 as we encountered repeated, uncontrollable operational challenges, including the recent winter storm Elliott. Our team overcame treacherous weather conditions, worked extended shifts and managed customer disruptions to get them to their destinations safely. I couldn't be more confident in Team Frontier and our future together as America's ultra-low-cost carrier."

Frontier Airlines gets a brand new Airbus A321neo aircraft......

Aviation Capital Group has delivered a brand new Airbus A321neo aircraft on long-term lease to Frontier Airlines. This jet is powered by the ultra-efficient Pratt & Whitney GTF engines and is the first of seven A321neo aircraft scheduled to deliver to the airline from ACG’s order book with Airbus. Traditional to Frontier Airlines, this A321neo has a new special livery with “Ozzy the Orca” painted on the tail.

“We are delighted to deliver this new Airbus A321neo aircraft to Frontier Airlines, and we look forward to continuing to build on our strong relationship with the airline,” said Ross Campbell, Vice President of Marketing for ACG. “This aircraft will provide fuel efficiency, passenger comfort, and supports Frontier Airlines’ commitment to ensuring the sky is for everyone – offering a superior level of ultra-low-cost service.”

“We are pleased to expand our long and valued relationship with ACG through the delivery of this new A321neo,” said Robert Fanning, Vice President - Fleet, Frontier Airlines. “The highly fuel-efficient A321neo aircraft are helping to further our sustainability mission as America’s Greenest Airline as we continue to expand our fleet.”

Aviation Capital Group was founded in 1989 and is one of the world’s premier full-service aircraft asset managers with approximately 480 owned, managed and committed aircraft as of September 30, 2022, which are leased to approximately 90 airlines in approximately 45 countries. ACG is a wholly owned subsidiary of Tokyo Century Corporation.

Another Airbus A321neo delivered to Frontier Airlines

Aviation Capital Group has delivered a brand new Airbus A321neo aircraft on long-term lease to Frontier Airlines. This jet is powered by the ultra-efficient Pratt & Whitney GTF engines and is the first of seven A321neo aircraft scheduled to deliver to the airline from ACG’s order book with Airbus. Traditional to Frontier Airlines, this A321neo has a new special livery with “Ozzy the Orca” painted on the tail.

“We are delighted to deliver this new Airbus A321neo aircraft to Frontier Airlines, and we look forward to continuing to build on our strong relationship with the airline,” said Ross Campbell, Vice President of Marketing for ACG. “This aircraft will provide fuel efficiency, passenger comfort, and supports Frontier Airlines’ commitment to ensuring the sky is for everyone – offering a superior level of ultra-low-cost service.”

“We are pleased to expand our long and valued relationship with ACG through the delivery of this new A321neo,” said Robert Fanning, Vice President - Fleet, Frontier Airlines. “The highly fuel-efficient A321neo aircraft are helping to further our sustainability mission as America’s Greenest Airline as we continue to expand our fleet.”

Aviation Capital Group was founded in 1989 and is one of the world’s premier full-service aircraft asset managers with approximately 480 owned, managed and committed aircraft as of September 30, 2022, which are leased to approximately 90 airlines in approximately 45 countries. ACG is a wholly owned subsidiary of Tokyo Century Corporation.

U.S. loc-cost-carrier Frontier Airlines reported a quarterly profit for the third quarter of 202

Photo Frontier 

Frontier Airlines, Inc., has reported a quarterly profit for the third quarter of 2022, its second consecutive quarterly profit, underpinned by record ancillary revenue per passenger and an improvement in unit costs.

Total operating revenue for the third quarter of 2022 was $906 million, 35 percent higher than the corresponding quarter in 2019. Ancillary revenue per passenger during the quarter was a record $78, 38 percent higher than the corresponding quarter in 2019, contributing to a 26 percent increase in revenue per available seat mile ("RASM") over the same period. Operating expenses totalled $850 million or 10.57 cents of costs per available seat mile ("CASM") during the third quarter, which was 11 percent lower than the prior quarter. Comments about relative operating statistics exclude pandemic-affected quarters during 2020.

Earnings before taxes for the quarter were $58 million, while adjusted (non-GAAP) earnings before taxes were $47 million, reflecting a pre-tax margin of 6.4 percent and an adjusted pre-tax margin of 5.2 percent (on a non-GAAP basis excluding special items). Net income for the third quarter of 2022 was $31 million, or $33 million on an adjusted (non-GAAP) basis.

"We are proud of our 26 percent increase in RASM versus 2019 and the improvement in unit costs versus the second quarter, which delivered an adjusted pre-tax margin of 5.2 percent, nearly double the prior quarter margin," said Barry Biffle, president and CEO. "Further, we achieved another record quarter of $78 of ancillary revenue per passenger."

Frontier Airlines officially unveils its first ultra-fuel-efficient Airbus A321neo aircraft

Frontier Airlines officially unveiled its first ultra-fuel-efficient Airbus A321neo aircraft at an event at Tampa International Airport (TPA) earlier this week. The 240-seat A321neo, powered by Pratt & Whitney’s groundbreaking GTF engines, will be the most fuel-efficient commercial aircraft among any U.S. airline. Frontier’s A321neo’s will generate significantly lower carbon emissions and engine noise, furthering the efforts of America’s Greenest Airline to reduce its environmental footprint.

The aircraft is the first of 158 A321neo’s to be delivered to the ultra-low-cost carrier by leading airplane manufacturer Airbus between now and 2029. Frontier currently has 226 aircraft in total on order which will nearly triple its fleet size by the end of the decade.

“The addition of these new A321neo’s to our fleet will make the greenest airline in the U.S. even greener with these aircraft able to achieve 120 miles per gallon per seat,” said Barry Biffle, president and CEO, Frontier Airlines. “They are the most fuel-efficient aircraft in operation among major U.S. airlines and are capable of delivering immediate, tangible reductions in fuel consumption, carbon emissions and engine noise. Frontier continues to lead the way in reducing fuel consumption and lessening our environmental footprint and the addition of the A321neo to our fleet is another step in that journey,” Biffle added.

The debut event in Tampa also included the unveiling of a highly striking special-edition aircraft livery, along with the animal featured on the aircraft’s tail – Frederick the Bald Eagle, inspired by Pratt & Whitney and named for its founder Frederick B. Rentschler. Rentschler was a trailblazer in aviation, designing engines that were dramatically lighter and more fuel efficient than their predecessors. All Frontier aircraft feature an animal on their tail, many of them endangered and threatened species.

Frontier Airlines launches 10 new routes from Phoenix Sky Harbor International Airport

The U.S. ultra-low fare carrier Frontier Airlines will launch a number of new nonstop services from Phoenix Sky Harbor International Airport to Philadelphia, Baltimore-Washington, Orange County, California, Seattle-Tacoma, Minneapolis-Saint Paul, Portland, Oregon, Fort Lauderdale-Hollywood, Nashville, Indianapolis and Kansas City in November 2022 and January 2023. 

With the new service, Frontier will serve 22 destinations from PHX. Frontier’s continued growth at PHX will be supported through the planned November opening of a new crew base, which is expected to initially employ up to 180 pilots and 275 flight attendants. To celebrate, America’s Greenest Airline is offering fares as low as $19.*

“This major expansion of service from PHX solidifies Frontier’s place as one of Phoenix’s largest airlines,” said Barry Biffle, president and CEO, of Frontier Airlines. “We’re thrilled to offer these new routes serving some of the most popular destinations in America. Our commitment to future growth at PHX is strong as we prepare to open our new crew base in November and introduce this expanded array of convenient, affordable flight options for Phoenix-area consumers.”

“Frontier Airlines is quickly advancing in Phoenix, and these ten new routes mark the growth of business and leisure travellers choosing our great city as a destination,” said Phoenix Mayor Kate Gallego. “We are grateful for the commitment that Frontier has made with its crew base and the employment opportunities it provides. More people will discover why Phoenix is a great vacation destination, business hub, and place to call home.”

Denver International Airport and Frontier Airlines take first steps on new facility on east end of concourse A

120,000-Square-Foot Project to Include Variety of Customer-Centric Features and Adjacent Maintenance Facility

Frontier Airlines and Denver International Airport celebrated a ceremonial groundbreaking on Monday for the new 120,000-square-foot ground boarding facility on the east end of Concourse A at Denver International Airport. The project includes the remodelling of 83,000 square feet of space, along with a 37,000 square-foot expansion area. The facility will feature 14 gates and an adjacent 8,000-square-foot maintenance facility.

Frontier President and CEO Barry Biffle, Denver International Airport CEO Phil Washington and City of Denver Councilwoman Stacie Gilmore, along with Frontier mascot Griz the Grizzly Bear, placed shovels in the dirt to mark the project’s ceremonial groundbreaking.

“We’re thrilled to join with our partners at Denver International Airport and the City of Denver to break ground on this new facility, which will provide a beautiful, convenient, customer-centric experience for departing and arriving Frontier passengers,” said Barry Biffle, CEO of Frontier Airlines. “The use of ground boarding will cut boarding and deplaning times in half by allowing customers access to aircraft from the front and rear and will help support our expansion at DEN. As Colorado’s hometown airline, we are excited to further grow our commitment to the Denver community and beyond and offer an exceptional customer experience at DEN.”

“Frontier has served the Denver community for 28 years and has been a tremendous partner to DEN,” said DEN CEO Phil Washington. “The extension of our ground load facility will allow Frontier and DEN to continue to grow, providing more options for travellers. We are thankful for their continued commitment to the airport and community and we look forward to welcoming Frontier passengers for many years to come.”

Frontier Airlines Poised for Significant Growth as America’s Ultra-Low Cost Carrier

Frontier Airlines,  highlighted its strong foundation and the significant growth opportunities ahead as a standalone company. In addition, the Company announced an unprecedented deal for customers, offering one million passenger seats from $19.00*.

William A. Franke, the Chair of Frontier’s Board of Directors and the managing partner of Indigo Partners, Frontier’s majority shareholder, commented, “While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier Board took a disciplined approach throughout the course of its negotiations with Spirit. We were focused on offering the appropriate value for Spirit, while prioritizing consumers and the best interests of Frontier, our employees and shareholders. As we enter our next chapter, Frontier remains well-positioned to deliver significant value to our shareholders as we serve the growing demand for affordable air travel.”

“As we continue to see a rebound in leisure travel, we have never been more confident in our strategy and prospects than we are today,” said Barry Biffle, President and CEO of Frontier. “Frontier remains America’s lowest-fare, lowest-cost airline that features the industry’s youngest, most fuel-efficient fleet, a robust order book, and a strong balance sheet. With the price-sensitive segment projected to grow, we are just getting started. In fact, today we are announcing a blockbuster sale – offering one million seats from $19.00*, underscoring our commitment to delivering Low Fares Done Right. No one is as cheap as Frontier. Looking ahead, we’ll continue to expand capacity and add new routes as America’s ultra-low-cost airline, and we look forward to creating new jobs and welcoming future employees to Team Frontier.”

Frontier has a strong foundation and clear plan to drive long-term value:

Frontier drops Durango

The budget airline Frontier Airlines has confirmed it will cease operations at Durango-La Plata County Airport from 8th August.  The service has lasted just over a year since the carrier started the route in June 2022, which was the first return to the Durango market since 2014.

Aviation Director Tony Vicari said: "We are disappointed that Frontier service to Denver and Las Vegas will end on August 8. However, air service remains strong at Durango-La Plata County Airport. Travellers flying through DRO continue to have access to daily nonstop flights to Dallas and Phoenix on American Airlines, as well as daily nonstop flights to Denver on United Airlines.”

“Frontier’s performance at DRO over the last six months has been lower than expected,” Vicari said. “This weaker than anticipated consumer demand contributed to Frontier’s decision to exit the Durango market at this time.”

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JetBlue ups its offer for Spirt........maybe the 43rd time will work.....

JetBlue ups bid for Spirit….

There is no doubt that JetBlue’s management have set their hearts on getting the most complained about airline in the U.S. as it battles against Frontier. The New York-based airline has upped its bid yet again – seems like this is the 43rd increase in either amount or conditions associated with the take-over deal they’ve done since they first discussed the buyout over a year ago.

There is also no doubt that the JetBlue offer has drastically over-valued Spirit that will cause the firm huge long term issues if they are successful – the axing transatlantic services is on the cards for next year should the deal go ahead cited one staffer at The Brewster.

•          The main changes to the new offer are Increased accelerated prepayment to $2.50 per share, structured as a cash dividend to Spirit shareholders promptly following the Spirit shareholder vote approving the combination between Spirit and JetBlue (subject to CARES Act limitations).

•          Enhanced reverse break-up feeof $400 million payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons.

•          Addition of a ticking fee mechanism, which would provide shareholders with a monthly prepayment of $0.10 per share between January 2023 and the consummation or termination of the transaction. This represents an estimated aggregate ticking fee of up to $1.80 per share, of which the first $1.15 per share in payments will offset the reverse break-up fee or the merger consideration. Any payments in excess of the $1.15 per share will be incremental to the total purchase price of $33.50 or the reverse break-up fee. This increases the total transaction consideration to up to $34.15 per share in the event the transaction is consummated and total downside protection to $4.30 per share, or approximately $470 million in the aggregate, in the event the transaction is terminated.

“After the Spirit Board’s failure to recognize our decisively superior offer, we’ve discussed our offer directly with Spirit shareholders and are now modifying our proposal in response to shareholders’ expressed interest, to include a monthly payment for shareholders, with the certainty of a significant cash premium at closing,” said Robin Hayes, chief executive officer, JetBlue.

It has been reported locally that JetBlue staff in Fort Lauderdale are unhappy with possible future working patterns that could seem them working seven days in a row if the takeover of Spirt occurs and are consulting with Union representatives, although we’ve not been able to independently verify this. However, if true it would only be the very start of such conversations and negotiations if a deal is completed according to some staff members of JetBlue.

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Yet another offer from JetBlue in the battle for Spirit

New York's JetBlue has just submitted yet another improved proposal to the Board of Directors of Spirit to acquire all of the outstanding common stock of Spirit. The new offer offers Spirit stockholders demonstrably superior value, more regulatory protections, and the prepayment of a portion of cash consideration:

Enhanced reverse break-up fee: JetBlue would provide a $350 million ($3.20 per Spirit share1) reverse break-up fee, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons. This represents an increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue has previously offered to pay, and is $100 million greater than the amount being offer by Frontier.

Accelerated prepayment of $1.50 per share: JetBlue would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee, structured as a cash dividend to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.2

Superior, all-cash premium: JetBlue’s proposal offers Spirit stockholders aggregate consideration of $31.50 per share in cash, comprised of $30 per share in cash at the closing of the transaction and the prepayment of $1.50 per share of the reverse break-up fee.

JetBlue has sent a letter to the Board of Directors of Spirit containing its improved proposal. In the letter, JetBlue CEO Robin Hayes states:

“Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good-paying jobs for crew members, and more value for stockholders. The key features of our Improved Proposal – the up-front cash payment and increased reverse break-up fee – reflect the seriousness of our commitment and underscore our confidence in completing this transaction. Additionally, given the similar regulatory risks of the two transactions and the increased reverse break-up fee we are prepared to provide, we believe our Improved Proposal remains a Superior Proposal by any measure.”

More negotiations and backroom bickering on the battle to take over Spirit.

The negotiation and bickering continue at a pace in the battle to take over Spirit Airlines, following the news that the Frontier Group Holdings has amended its offer for the ailing budget carrier. 

Just added is a condition that Frontier would pay a reverse termination fee of $250 million, or $2.23 per share, to Spirit in the unlikely event the combination is not consummated for antitrust reasons.

William A. Franke, the Chair of Frontier's Board of Directors and the managing partner of Indigo Partners, Frontier's majority shareholder, said, "We continue to believe in the strategic rationale of a combined Spirit and Frontier, which brings together two complementary businesses to create America's most competitive ultra-low fare airline. Given our conviction that regulators will find this combination to be pro-competitive, we have agreed to institute a reverse termination fee. We look forward to bringing these two companies together and delivering on the benefits for all stakeholders."

Ted Christie, President and CEO of Spirit, said, "Since announcing our transaction with Frontier, we have had extensive constructive conversations with our stockholders, who have expressed support for the strategic rationale of our combination but a desire for additional stockholder protections. After discussing this feedback with the Frontier Board and management team, we have agreed to amend the merger agreement. We look forward to closing the transaction and bringing more ultra-low fares to more people in more places."

Spirit has employed a firm more used to lobbying politicians to lobby shareholders to accept the Frontier deal, rather than the rival and way more lucrative offer from the New York hometown airline JetBlue. 

JetBlue issued a statement in which it blamed conflict amoung members of Spirit's board for the way they continue to prompote a deal against the best interests of shareholders. "yet again, they have failed to do. Spirit’s Board only went back to Frontier under pressure, when it became increasingly clear their shareholders would decisively reject the Spirit Board’s flawed process and Frontier’s inferior transaction.

The addition of a reverse termination fee in the face of a likely defeat is simply an acknowledgement that the regulatory profiles and timelines of both deals are indeed similar. Spirit had already admitted that its own prior unreasonably optimistic projections of receiving approval this year were in fact not accurate. Experts agree both transactions will receive the same level of scrutiny.

JetBlue will review and assess the revised terms of the amended merger agreement once it has been made available. We believe we have put forward a clearly superior offer and remain prepared to negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence. We urge Spirit shareholders to continue to let the Spirit Board know they want an open, fair process, providing us a level playing field and full access to the same information available to Frontier. There is still time for the Spirit Board to do the right thing for their shareholders."

As this take-over battle continues the reputation of all three firms is taking a knocking, many of JetBlue's own management are against the propsotion to take over Spirit. A top level leader in another of Indigo Partners airlines has said the Frontier / Spirit merger will not survive regulatiory investigation and has already put a strain on future development for the rest of the group.  

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Spirit's board still against JetBlue take over deal

The board of the budget airline Spirit has yet again rejected the advances of JetBlue,  in favour of a takeover bid from Frontier.  The low-cost airline's bosses are still claiming that the JetBlue deal would face substantial regulatory hurdles, especially while the Northeast Alliance NEA with American Airlines remains in effect. The U.S. Department of Justice (DOJ) is currently suing JetBlue and American Airlines, alleging that the NEA is anti-competitive. Spirit is opposed to the NEA on grounds that it is anti-competitive,  Spirit does not believe the DOJ, or a court, will be persuaded that JetBlue should be allowed to form an anticompetitive alliance that aligns its interests with a legacy carrier (American) and then undertake an acquisition that will eliminate the largest ULCC carrier in the U.S. (Spirit).

In response, JetBlue issued the following statement  'It’s no surprise that Spirit shareholders are getting more of the same from the Spirit Board. The Spirit Board, driven by serious conflicts of interest, continues to ignore the best interests of its shareholders by distorting the facts to distract from their flawed process and protect their inferior deal with Frontier.

Regarding regulatory approval, Spirit would have you ignore the current regulatory climate to think that approval of their Frontier deal is assured. That is simply not true. Both deals are subject to regulatory review, and both deals have a similar risk profile. Spirit shareholders recognize that and are showing great interest in hearing more about our superior offer and the regulatory commitments and protections we have made, including a reverse break-up fee.

Frontier offers less value, more risk, and no regulatory commitments, despite a similar regulatory profile. We are confident that as we continue to share the facts directly with Spirit shareholders, they will be even more perplexed than they already are about why the conflicted Spirit Board has refused to negotiate with us in good faith. We believe that the Spirit shareholders will make their views known by voting against the Frontier offer and tendering their shares into our offer.'

Which way Spirit's shareholders will go remains to be seen, however, if nothing happens and Spirit is left to flounder, it will be toast before the end of this year. The company has more debts than it can realistically cope with, it is running at a loss and some of its legal fees are being picked up by another airline entity. Its management has been making calls with the senior leadership of another mega-carrier and has effectively not been completely honest with shareholders, as the merger or takeover by Frontier would also face anti-competition opposition and investigation from authorities.  

From the outside, it would seem like Spirit's board is acting against the company's and shareholders' interests, one might even say there is a whiff of dishonesty in the air, oh how that aroma of corruption seems to linger. However,  that's not to say the JetBlue deal would present problems, even if it did go through.  It would be an uphill battle for the New York based airline to win the hearts and minds of Spirit employees that have been poisoned against JetBlue and everything it stands for.  The reputation of JetBlue hangs in the balance either way, which is something that costs millions and takes decades to achieve, but only moments to lose. 

 

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JetBlue Urges Spirit Shareholders to Protect Their Interests and ‘Vote No’ on Frontier Transaction

JetBlue has spent a special message to Spirit shareholders asking them to “Vote No” to an inferior deal from Frontier.

JetBlue commenced an all-cash, fully financed tender offer to acquire all of the outstanding shares of Spirit for $30 per share, without interest and less any required withholding taxes. Given the Spirit Board of Directors’ complete unwillingness to share the same necessary diligence information that was shared with Frontier, JetBlue is now offering to acquire Spirit for $30 per share in cash through a fully financed tender offer. This represents a 60% premium to the value of the Frontier transaction as of May 13, 2022 – a very compelling offer and higher than the premium implied by JetBlue’s original proposal. JetBlue is fully prepared to negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence.

JetBlue launched a website at www.JetBlueOffersMore.com and issued a letter to Spirit shareholders detailing the benefits of its transaction, the certainty of closing, and the misleading statements made by Spirit. In the letter, JetBlue CEO Robin Hayes states:

“JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges."

“Yet the Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted."

“Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.”

The letter goes on to note that JetBlue’s current proposal still offers more value and certainty for Spirit shareholders than Frontier, and stresses that the company is prepared to engage on the basis of its original proposal, if the Spirit Board acts in good faith:

“Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.”

JetBlue makes its bid to buy Spirit better.....

Despite customer concern, the New York airline JetBlue has confirmed it has enhanced its offer to buy out budget carrier Spirit this week which smashes the offer from Frontier.   JetBlue now says it will divest some of the overlapping routes and will pay $33 cash per share for all of the outstanding common stock of Spirit. 

To further sweeten the deal, JetBlue has announced it would agree to divest assets of JetBlue and Spirit up to a material adverse effect on Spirit, with a limited carve-out for actions that would adversely impact JetBlue’s Northeast Alliance (NEA) with American Airlines.

The full proposal is here.

Remedy package to address NEA and regulatory concerns: JetBlue would offer a remedy package that includes the divestiture of all Spirit assets in New York and Boston so that JetBlue does not increase its presence in the airports covered by the NEA. The package would also include gates and assets at other airports, including Fort Lauderdale.

Reverse breakup fee: JetBlue would provide for a $200 million reverse break-up fee, representing approximately $1.80 per Spirit share, that would become payable to Spirit in the unlikely event the JetBlue transaction is not consummated for antitrust reasons.

Superior, all-cash premium: JetBlue’s proposal continues to offer Spirit shareholders $33 in cash per common share, a 47% premium to the value of the Frontier transaction as of April 29, 2022 (a) and a 52% premium to Spirit’s share price as of February 4, 2022 (b) (the last trading day prior to the Spirit-Frontier announcement).

“By creating a national competitor to the Big Four airlines, this transaction would deliver meaningful benefits for customers, superior value for shareholders of both airlines, and new opportunities for our combined crewmembers,” said Robin Hayes, chief executive officer, JetBlue. “We have confidence that we can complete this transaction to bring more low fares and great service to more customers. A JetBlue-Spirit combination will deliver enhanced financial strength and accelerate revenue growth and profitability for JetBlue shareholders.”

The regulatory commitments in JetBlue’s enhanced offer represent a significant improvement compared to those offered by Frontier. The revised offer comes after Spirit limited JetBlue’s access to important due diligence data yet requested unprecedented commitments from JetBlue that far exceed those in prior airline transactions.

“Spirit shareholders would be better off with the certainty of our substantial cash premium, regulatory commitments, and reverse break-up fee protection,” Hayes said. “The Frontier transaction has a similar regulatory profile to ours but offers no divestiture commitment and no reverse break-up fee, while the uncertain value of Frontier’s stock exposes Spirit shareholders to significant risk. We hope the Spirit Board will now recognize that ours is clearly a superior proposal and engage with us more constructively than they have to date. We are making our offer public so their shareholders are aware this attractive value-creating opportunity is available to them.”

Spirit shareholders will assume a number of risks if the Frontier transaction moves forward:

Frontier is not required to undertake any divestitures to obtain the necessary regulatory approvals to close its transaction, despite having greater overlap with Spirit on nonstop routes than JetBlue does, among other regulatory hurdles.

Frontier is not required to pay a reverse break-up fee if the transaction is not consummated for antitrust reasons even though the Frontier transaction has a similar regulatory profile as the proposed transaction with JetBlue.

The value of Frontier’s stock, the basis for the transaction’s value to Spirit shareholders, is subject to significant risks and has already declined approximately 14% since Frontier’s offer was announced. Specifically, the value of Frontier’s stock declined from $12.39 on February 4, 2022, to $10.61 on April 29, 2022, which translated into a deterioration of the value of the Frontier transaction of $3.41 per Spirit share or approximately $370 million .

The financial projections underpinning the transaction with Frontier are based on unrealistically optimistic assumptions, especially with respect to costs associated with personnel attrition and wage inflation. Their model does not consider any wage increases for team members, including pilots, at a time of high attrition and an anticipated shortage of pilots.

JetBlue Effect 3x Greater than ULCCs; Similar Regulatory Profile to Frontier

A combined JetBlue-Spirit will create a more compelling national low-fare competitor to challenge the Big Four airlines that control more than 80% of the U.S. market. When JetBlue introduces its unique combination of low fares and award-winning service onto new routes, legacy carriers lower their fares and customers win with more choice. With its positive effect on competition, and backed by its regulatory commitments, JetBlue has a high degree of confidence in its ability to achieve regulatory approval of its acquisition of Spirit.

JetBlue’s entry into new nonstop routes triggers fare decreases from legacy airlines that are more significant than those resulting from ultra-low-cost carriers (ULCCs) – approximately 16%, or three times the result of ULCCs on legacy nonstop routes – known as the JetBlue Effect.

The faster expansion of JetBlue and the JetBlue Effect, coupled with a proposed remedy package and the continued expansion of other ULCCs, will address regulatory concerns that Spirit, the regulators, or the courts may have.

Both transactions would result in companies of similar size, creating the No. 5 U.S. airline: JetBlue/Spirit would have a 9% market share based on full year 2022 seats compared to 8% for a combined Frontier/Spirit.

Contrary to common misperceptions, JetBlue has significantly less overlap with Spirit in terms of flights, seats, and ASMs than Frontier in the metropolitan areas served by both (c). JetBlue overlaps with Spirit only on 48 nonstop routes compared to Spirit and Frontier’s overlap on 76 nonstop routes (d).

The NEA – which JetBlue strongly believes will be allowed to continue because the alliance is delivering the customer benefits promised – is not a factor in this transaction. Given the remedy package, JetBlue's analysis finds that the presence of the NEA would have no meaningful economic effect in a JetBlue-Spirit transaction.

“Customers shouldn’t have to choose between a low fare and a great experience, and with JetBlue, it’s possible for customers to have both,” Hayes said. “Both the NEA and the proposed Spirit transaction are strategic actions that accelerate our existing growth plan and bring the JetBlue Effect to more customers in the Northeast, Florida, and around the country. By bringing together the power of the JetBlue and Spirit teams, this combination would strengthen JetBlue’s ability to grow, deliver outstanding service, and compete in a domestic market dominated by the four largest airlines. We look forward to delivering these benefits to all stakeholders once Spirit determines our proposal to be superior and we close the transaction.”

JetBlue's Revised and Superior Proposal 

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