Frontier Airlines continues to pursue a merger with Spirit Airlines, but Spirit is asking for more concessions than Frontier is willing to give.
Leaders at Spirit Airlines say they would rather pursue their own course out of bankruptcy before offering the terms of Frontier Airlines’ latest bid for a merger.
The Florida-based carrier gave the public an update on February 12, 2025, offering a behind-the-scenes look at communications between the two companies as discussions continue.
Spirit Demands Debt Considerations, Breakup Fees in Merger
The opening months of February saw a flurry of communication between Spirit and Frontier about a possible merger, including entering confidentiality agreements with Spirit noteholders.
By February 7, 2025, Spirit sent Frontier a counterproposal for consideration. While their plan agreed to many of the points Frontier brought to the table, Spirit asked for $600 million in first lien takeback debt, around $1.2 billion of equity value in the combined airline, and a reverse termination fee if their merger was cancelled for reasons other than a spirit breach.
Frontier chief executive Barry Biffle and board chair Bill Franke pushed back on the proposal and resubmitted their own offering. In the e-mail to Spirit president Ted Christie, the two reiterated they believed “…this approach is the only way to fairly compare the two plans and we have detailed in our prior correspondence that our proposal is superior even using reduced valuation metrics to calculate the value delivered by either plan.”
In turn, the Florida-based airline publicly announced they would “continue swiftly to advance and conclude its restructuring process, which will significantly deleverage the Company and position it for long-term success.” Spirit expects their restructuring to be complete in the first quarter of 2025.
Spirit and Frontier originally agreed to a $6 billion merger in 2022, before it was ultimately broken up by a counter offer to Spirit from JetBlue.
