Spirit Airlines rejects Frontier's latest merger bid, plans to proceed on its own
A merger of America's two largest budget airlines appears increasingly unlikely.
Spirit Airlines on Thursday rejected Frontier Airlines' latest proposal for a merger, which would have helped bring the Florida-based carrier out of bankruptcy to join forces with its top competitor.
Instead, Spirit planned to move forward with restructuring under Chapter 11 bankruptcy, reiterating its intention to exit the proceedings by the end of March.
In a statement Thursday, Spirit said Frontier's proposal — which included the merger and involved Frontier assuming Spirit's debt — would have produced less value for its shareholders than its own massive commercial overhaul planned as part of its emergence from bankruptcy.
In a filing last fall with the U.S. Securities and Exchange Commission, Spirit said it would make sweeping changes — from adding free inflight Wi-Fi for Free Spirit loyalty members to overhauling its frequent flyer program and improving its customer service.
The carrier has been embroiled in financial turmoil in recent years, which led to the airline declaring bankruptcy in November. Like most budget carriers in the U.S., Spirit has had to contend with stiff competition on routes, and travelers flocking to larger network carriers offering premium amenities like lie-flat seats and airport lounges — not to mention robust international networks.
But Spirit has also faced mounting debt and a disproportionate impact from engine troubles at a third-party supplier, grounding a sizable portion of its fleet for prolonged maintenance.
FAQ: Spirit Airlines' bankruptcy and how it might affect your travel
Frontier executives had hoped to woo Spirit shareholders with the latest attempt at a joining of forces between the two budget carriers; the two airlines explored a merger in 2022 before Spirit instead pursued an ill-fated deal with JetBlue.
"Our proposal offers more value than Sprit's stand-alone plan," Frontier CEO Barry Biffle said on the Denver-based carrier's Feb. 7 earnings call.
After Frontier announced its latest merger attempt late last month, the two sides went back and forth with a series of counteroffers, Spirit said Thursday — but the carrier said it now plans to move forward on its own.
"Spirit will continue swiftly to advance and conclude its restructuring process, which will significantly deleverage the Company and position it for long-term success," the airline said.
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