Spirit Airlines has rejected a second offer by Frontier Group to merge, citing financial conditions.
In a statement issued on January 29, 2025, Frontier argued that the newly proposed merger would provide “meaningful value to Spirit financial stakeholders, in excess of Spirit’s standalone restructuring plan.”
Frontier believes that Spirit’s financial stakeholders could participate in the upside of a stronger low-cost carrier while benefiting from the significant synergies Frontier expects to achieve by combining the airlines’ operations.
“As a combined airline, we would be positioned to offer more options and deeper savings, as well as an enhanced travel experience with more reliable service,” said Barry Biffle, CEO of Frontier.
Since submitting the proposal, Frontier has held discussions with members of Spirit’s board of directors and management team, as well as representatives of Spirit’s financial stakeholders, the statement read.
During these discussions, Frontier shared information with Spirit and its financial stakeholders regarding the benefits of the merger, while claiming that Spirit’s standalone plan “will likely result in an unprofitable airline with a high debt load and limited likelihood of success.”
“This proposal reflects a compelling opportunity that will result in more value than Spirit’s standalone plan by creating a stronger low fare airline with the long-term viability to compete more effectively and enter new markets at scale,” Bill Franke, Chair of Frontier’s Board of Directors, added.
However, in a separate regulatory filing submitted on January 29, 2025, Spirit announced that the offer was rejected.
“We have discussed the new Frontier proposal with the advisors to our bondholders as contemplated by your letter and required by our restructuring support agreement,” Ted Christie, Spirit President and CEO, and McIntyre Gardner, Chairman of the board, said. “We are told they believe your current proposal is so insufficient as not to merit a counter.”
“We share your view on the logic of a combination of our companies and are willing to work with you constructively to see if there is a deal that can be reached that is acceptable to all parties,” Spirit concluded.
Spirit and Frontier already engaged in merger talks in 2022. However, Frontier withdrew when JetBlue made its own offer to buy Spirit, which the latter accepted. After the US Department of Transportation (DOT) blocked the JetBlue-Spirit merger in 2024 due to competition concerns, Spirit and Frontier opened talks again. However, these discussions eventually fell through in November 2024.
In November 2024, Spirit announced that it had entered a prearranged Chapter 11 process in the US Bankruptcy Court for the Southern District of New York citing ongoing maintenance issues surrounding its Pratt & Whitney geared turbofan engines and the failed merger with JetBlue.
