Ultra-low-cost carriers Spirit Airlines Inc. and Frontier Airlines will merge in a deal valued at $6.6 billion.

The merger deal, which was announced on  Feb. 7, will lead to Frontier owning roughly 51.5% of the combined company and Spirit about 48.5%. This will be the first merger of two large U.S. airlines since 2016, when Alaska Airlines merged with Virgin America Inc..

Private equity firm Indigo Partners LLC held a stake in Spirit from 2006 to 2013. Shortly after liquidating its stake in Spirit, Indigo Partners purchased Frontier Airlines for $145 million from Republic Airways.

Since then, the two airlines have grown rapidly in the past few years, both successfully adding new routes, introducing more flights and continuously cutting prices for their customers. Once the merger goes through, the combined companies will be able to introduce many new routes that aren’t already covered by the airlines.

This merger will benefit customers, employees and shareholders of the two companies. It will lead to more than a billion dollars in savings for customers and provide more stability for the airlines’ combined 15,000 professionals.

All current employees will join the new merger, which is also expected to create 10,000 new jobs by 2026. While the CEO, headquarters location, name and branding of the new company haven’t been announced yet, it has been decided that the board of directors will comprise 12 directors, seven of whom will be elected by Frontier and Spirit.

The combined company is also promising that its new fleet will be the youngest and the most environmentally friendly in the United States.

While the deal was approved by the shareholders, it is expected to go through some scrutiny with antitrust regulators. The Biden administration has been relatively strict regarding big corporate mergers, suing a partnership between American Airlines Inc. and JetBlue Airways in September 2021. Even after the merger, American, Delta Air Lines Inc., United Airlines Inc. and Southwest Airlines Co. would still have about 80% of the market. The regulators will eventually end up approving this merger.

The deal emerged from the troubles brought by the pandemic. Seeing losses throughout 2021, both Frontier and Spirit announced losses for the fourth quarter. Frontier lost $102 million in net income with public offerings decreased by $0.48 per share, while Spirit lost $79.2 million in net income with public offerings decreased by $0.64 per share.

Frontier and Spirit face an increasing number of complaints due to canceled or delayed flights. Together, they stood last in the Department of Transportation’s latest monthly figures. However, it should be kept in mind that the entire airline industry has struggled in the past two years.

When looking at the industry at large, Spirit and Frontier are still better positioned. These two airlines primarily focus on customers flying for leisure while the other legacy airlines see most of their revenue from international and business travel, both of which have been hit the hardest during the pandemic.

After the transaction goes through, Spirit shareholders are expected to receive 1.9126 Frontier shares plus $2.13 cash premium for each Spirit share owned, giving them an implied $25.83 per share, which represents a premium of 19% over Feb. 4.

“Together, Frontier and Spirit will be America’s Greenest Airline and deliver more ultra-low fares to more people in more places,” Frontier President and CEO Barry Biffle said in a statement.

As Biffle said, the merger will enable the two companies to build a more robust financial profile that will help accelerate growth and encourage the legacy operators to lower prices. With Spirit powerful in the East and Frontier strong in the West, their merger makes sense.