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The
offer this week, like the last bid, offers Spirit stakeholders
$400 million in newly issued debt and a 19% stake in Frontier
Group Holdings Inc., the parent company of Frontier.
“We remain convinced that the combination of Spirit and Frontier
would have created more value than Spirit’s stand-alone plan,”
Frontier said late Tuesday. “That said, we are disciplined
acquirors and are focused on delivering for Frontier
shareholders at a time when our airline is performing well in a
dynamic market environment.”
The offer from Frontier late last month was also rejected almost
immediately by Spirit.
Spirit said that it did offer a counterproposal to Frontier this
month, but that was rejected. The Florida airline has a hearing
in court on its reorganization plan Thursday.
Spirit anticipates completing the restructuring in the first
quarter.
Frontier's first attempt to merge with Spirit was in 2022, but
it was outbid by JetBlue. However, the Justice Department sued
to block JetBlue's $3.8 billion proposal, saying that it would
drive up prices for Spirit customers who depend on low fares. A
federal judge agreed in with the Justice Department in January.
JetBlue and Spirit dropped their merger bid two months later.
Spirit, the biggest U.S. budget airline, filed for bankruptcy
protection in November after working out terms with bondholders.
The airline has lost more than $2.5 billion since the start of
2020 and faces looming debt payments totaling more than $1
billion in 2025 and 2026.
The biggest U.S. airlines have snagged some of Spirit’s
budget-conscious customers by offering their own brand of
bare-bones tickets. And fares for U.S. leisure travel — Spirit’s
core business — sagged this past summer because of a glut of new
flights.
Shares of Frontier Group fell 5% in afternoon trading Wednesday.
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