Frontier Airlines Ends 2021 With US$2.06 Billion In Revenue, Announces US$6.6 Billion Merger With Spirit Airlines

Frontier Airlines, Inc. (Nasdaq: ULCC) released today its fourth quarter and full-year 2021 financial results. The company posted US$2.06 billion in annual revenue, an increase from 2020’s revenue of US$1.25 billion.

However, with operating expenses larger than the revenue, the firm ended the year with an operating loss of US$117 million. This compares to the operating loss of US$365 million last year.

This also led to notching an annual net loss of US$102 million compared to a net loss of US$225 million in the previous year. Calibrating for financial items, adjusted EBITDA for the year came in at a loss of US$364 million, an improvement from last year’s loss of US$466 million.

In 2021, the airline flew 20.7 million passengers with average revenue of US$99.49 per passenger. This compares to its 2020 numbers of 11.2 million passengers with US$111.23 revenue per passenger.

For Q4 2021, the company generated US$609 million in revenue, up from Q4 2020’s US$267 million. Still with operating expenses higher than its quarterly revenue, the firm ended with a net loss of US$53 million for the quarter. This compares to the previous year’s net loss of US$127 million. The quarterly loss translates to US$0.25 per share.

The Colorado-based airline also announced the definitive merger agreement with Spirit Airlines, Inc. (NYSE: SAVE), creating a low-cost airline with more than 350 aircraft in its fleet.

“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 Frontier Airlines’ chairman William Franke.

Based on its 2021 financials, the combined company has a potential annual revenue of up to US$5.3 billion, with annual run-rate operating synergies of US$500 million.

According to the terms of the agreement, Spirit Airlines shareholders will receive 1.9126 Frontier shares and US$2.13 in cash for each Spirit share. This values Spirit at roughly US$2.9 billion, and including the assumed debt and operating liabilities as part of the agreement, puts the transaction value at US$6.6 billion.

Upon closing, Frontier Airlines shareholders are expected to own 51.5% of the resulting company while Spirit Airlines shareholders will hold 48.5% equity. The merged firm will have seven seats on the board for Frontier and five seats for Spirit, with Franke assuming the chairmanship.

Frontier Airlines last traded at US$12.39 on the Nasdaq.

Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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