Low-cost carrier Spirit Airlines has rejected a second bid to merge with Frontier Airlines, saying the Denver-based airline’s offer was too low.
Frontier said in a statement Wednesday that the merger “would provide meaningful value to Spirit financial stakeholders” in excess of Spirit’s restructuring plan. And combining with Spirit would create opportunities for Frontier, Barry Biffle, Frontier CEO, said.
Frontier ended a 2022 bid to merge with Spirit after deciding it didn’t have the votes in the face of a larger offer by JetBlue Airways.
Spirit, which filed for reorganization bankruptcy last year, said in a filing submitted Wednesday to the Securities and Exchange Commission that after a review, the airline and other parties determined the offer would provide less value to stockholders than the company’s existing plan to emerge from bankruptcy.
“We stand ready to continue discussions with Spirit and its financial stakeholders and believe that we can promptly reach agreement on a transaction,” said Bill Franke, chairman of Frontier’s board of directors. “We are hopeful we can achieve a resolution that delivers significant value for consumers, team members, communities, partners, creditors and shareholders.”
Frontier’s proposal, offered Jan. 7, would issue $400 million in debt to be held by Spirit stakeholders and 19% of Frontier’s stock. Spirit would have sold $350 million of its stock to cover its debt.
Spirit said in its SEC filing that the timing and completion of the proposal were uncertain and that it would need regulatory and court approvals. The airline and investors weren’t willing to invest $350 million “based on the terms of the Proposal.”
In 2022, Frontier pulled out of a bidding war with JetBlue Airways for Spirit Airlines. JetBlue and Spirit called off their merger agreement in 2024.
Spirit, the biggest U.S. budget airline, has lost more than $2.5 billion since the start of 2020 and faces debt payments totaling more than $1 billion in 2025 and 2026, The Associated Press reported.
Budget airlines have struggled as larger carriers have targeted budget-minded travelers. That has prompted lower-cost airlines such as Frontier to start catering to customers who want more premium features. Frontier Airlines is beginning to offer first-class seating and created four fare classes: basic, economy, premium and business.
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