Frontier Airlines Spirit AirlinesThe two biggest low-cost airlines in America have merged to create the nation’s fifth-largest airline. After the boards of each company approved the deal, the CEOs announced the news in New York City.

It is worth $6.6 billion. Frontier Airlines controls 51.5%, while Spirit holds the remaining 48.5%. Spirit shareholders will be able to receive 1.91126 Frontier shares and $2.13 cash per Spirit share. According to the companies, the deal would have a $25.83 Spirit share value. This is 19% more than the Spirit shares valued at the end last week.

The name and location of the headquarters of the new airline are still to be decided. Bill Franke will serve as the chair for the airline. He is also the managing partner at Indigo Partners and the chair of Frontier. Franke announced that the combination of the two airlines would create America’s top ultra-low-fare airline, which will benefit consumers.

Franke sees the deal as the culmination of a long career that has included investments and oversight in low-fare airlines worldwide, such as Spirit. Indigo Partners had a stake of Spirit from 2006 to 2013, with Franke as its chair. He resigned after Indigo purchased the carrier. Indigo purchased Frontier Airlines from Republic Airways shortly after the move. The purchase cost $145 million.

Frontier, a Denver-based airline, has been steadily expanding its network of routes with new destinations and more flights since that acquisition. It often targets cities in which larger carriers like Southwest are strong. Frontier is able to offer low-cost flights in almost all cases, allowing it to establish a strong foothold among travelers looking for lower-cost tickets.

Spirit, which is based in Miramar in Florida, has been expanding aggressively over the past decade. Frontier plans to carry on that expansion once it’s merged with Spirit. Spirit CEO Ted Christie said that this transaction is about creating an ultra-low cost competitor in order to provide better service for our guests.

The Department of Transportation reported that Spirit and Frontier represented 2.8% of all revenue passenger miles flown annually by U.S. airlines in 2013. They had 5.4% market share by 2019 and were the fourth largest U.S. airlines. American Airlines, Delta, UnitedAnd SouthwestControlled 73.9% revenue passenger mile

Flying only with both airlines AirbusA Spirit/Frontier merger is sensible on paper, even though neither planes nor one market dominates the other. Corporate America has been informed by the Biden Administration that it will be scrutinizing potential mergers much more vigorously than Trump’s administration. They expect that the deal will close by the end of the year.

This article was contributed by Meghan Reeder, CNBC