The bankrupt American airline Spirit Airlines Inc. has rejected Frontier Group Holdings Inc.'s new merger proposal, but remains open to merging with low-cost carriers. This is reported in a press release from Spirit Airlines.
Frontier Group Holdings held talks with Spirit's management regarding the acquisition of the company's assets for $2.2 billion secured by Frontier's debt obligations and shares.
From Frontier's point of view, the deal is preferable to Spirit's bankruptcy restructuring, which will create a "loss-making airline with a high debt burden," since Spirit's bankruptcy plan involves transferring control of the airline to bondholders after exchanging $795 million in debt for shares and liquidating capital without compensation.
At the same time, the bondholders pledged to invest $350 million in new capital and provide $300 million to finance the bankruptcy process.
However, Spirit rejected Frontier's offer, calling the conditions "inadequate and unworkable." Despite the rejection of the deal, Frontier is ready to continue negotiations, as it believes that the combination of companies will be able to compete with larger air carriers.
In 2022, JetBlue Airways Corp. She made a proposal to acquire Spirit for $3.8 billion, but the deal was blocked on antitrust grounds. In 2024, Spirit Airlines declared bankruptcy amid increased competition from carriers and financial problems that arose after the unsuccessful merger with JetBlue.
Spirit Airlines is an American low—cost airline headquartered in Miramar, Florida. The company operated flights to major destinations in North and South America.
Frontier is a US mainline airline with headquarters in Denver, operating scheduled passenger flights to 83 destinations in the USA, Mexico and Costa Rica. The company is a subsidiary of the Republic Airways Holdings aviation holding company.
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