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Colorado AG expresses concerns about Frontier, Spirit merger plans

frontier airlines, denver international airport, r m
Posted at 11:37 AM, Mar 08, 2022

DENVER — On Tuesday, Colorado Attorney General Phil Weiser urged the U.S. Department of Transportation to investigate the proposed merger between Denver-based Frontier Airlines and Spirit Airlines, as well as Frontier's policies and customer service practices.

In early February, Frontier Airlines’ parent company announced it planned to buy Spirit Airlines in a $2.9 billion cash-and-stock deal.

In a letter sent to Secretary of Transportation Pete Buttigieg, Weiser wrote: "The proposed merger of two airlines with such a sub-par record of consumer service creates a real and pressing risk, should such merger be approved, that these suspect practices will worsen. Without competition between these two carriers, the merged entity will have fewer incentives to appropriately address complaints and treat their consumers fairly and in accordance with the law."

Weiser wrote a similar letter to former U.S. Secretary of Transportation Elaine Chao in September 2020, where he laid out his concerns about Frontier. He said the Department of Law received multiple complaints about the airline's customer service issues, which included failing to provide refunds or issue them promptly.

In his 2022 letter to Buttigieg, Weiser said these complaints, on top of the merger plans, mean that USDOT must take action.

"Spirit and Frontier were ranked at the bottom of a group of carriers in the American Customer Satisfaction Index in each of the past seven years," he wrote. "Both were also in the bottom three of the Wall Street Journal’s recent ranking of nine U.S. airlines, which examined factors such as cancellations, extreme delays, and mishandled baggage, and Spirit received the highest rate of complaints of any airline analyzed."

He also brought up the same complaints to the Department of Law that he mentioned in his 2020 letter.

Weiser said he recommends that USDOT examine that both airlines have "practices and policies in place that comply with laws requiring carriers to treat consumers fairly and honestly," he wrote.

When the merger plans were announced in February, the two companies said in a joint press release that they plan to change the industry to benefit the customers by introducing more low-fare flights to more destinations. The merger will make Frontier the fifth-largest airline in the U.S.

"The stronger financial profile of the combined company will empower it to accelerate investment in innovation and growth and compete even more aggressively, especially against the dominant 'Big Four' airlines, among others," the statement read.

After the announcement, some analysts warned that the deal may face opposition from regulators, as President Joe Biden’s administration has taken a tough stance on big corporate mergers. For years, the Justice Department has been concerned about consolidations in the industry leading to less competition and higher fares in the airline industry.

The companies pledged to have the “youngest, most fuel-efficient and greenest fleet” of planes in the U.S. while also adding 10,000 direct jobs by 2026.

The merger is expected to close in the second half of this year.