Will the third try be the charm?
Spirit Airlines is discussing a possible merger with rival ultra-low-cost carrier Frontier, Bloomberg first reported on Tuesday.
The discussions would mark the third time in as many years that the two airlines have discussed merging. The first fell through after Spirit accepted a separate proposal from JetBlue, one that was ultimately blocked by a federal judge on antitrust grounds.
Frontier approached Spirit about merging again and made a $2.2 billion offer in January, shortly after Spirit declared bankruptcy. Spirit rejected Frontier's proposal as "inadequate and unactionable."
The current offer comes as the airlines face a dramatically different landscape, however. Spirit is under Chapter 11 bankruptcy protection for the second time in two years. The carrier's cash reserves have been closely watched by industry observers, but the airline won some breathing room Monday when it gained access to $50 million in funding under an amended debtor-in-possession agreement.
Known for its bright yellow planes, add-on fees and no-frills service, the airline has frequently been the butt of late-night television jokes — but also has moved during the past year to perks that more closely mirror its major rivals. The carrier has aggressively worked to cut costs this year, slashing jobs and shrinking its network to become a smaller, leaner airline; however, these changes have struggled to stem losses nonetheless. In October, the airline lost $3.1 million per day on operations, according to a document filed with the Securities and Exchange Commission.
Spirit has seen a merger as a possible solution to its shaky financial situation, and has reportedly been exploring options "with a number of interested counterparties."
Frontier itself has struggled during a difficult year for low-cost airlines, which have lacked the premium revenue from wealthier travelers that has disproportionately boosted the bottom lines of its major airline rivals. Furthermore, legacy airlines' introduction of basic economy offerings has made it even harder for budget airlines to compete. Against that backdrop, Frontier's stock has fallen more than 28% since the beginning of 2025, and the company lost $190 million in the first nine months of the year.
Frontier announced on Monday that longtime CEO Barry Biffle would be stepping down immediately, although no reason was given for the abrupt change. Frontier President James Dempsey, an industry veteran formerly with European low-cost carrier Ryanair, will take over on an interim basis as the carrier's top executive.
It was not immediately clear how the merger would be structured or what it would mean for the airlines' separate brands, so stay tuned to TPG for the latest.
