Frontier makes a second bid for Spirit with budget airlines struggling

abcnews.go.com:

Frontier Airlines is attempting for a second time to merge with the now bankrupt Spirit Airlines, which declared bankruptcy late last year as budget airlines struggle

NEW YORK — Frontier Airlines is attempting for a second time to merge with the now bankrupt Spirit Airlines, which declared bankruptcy late last year as budget airlines struggle.

Frontier Group Holdings Inc., the parent company of Frontier Airlines, said Wednesday that the proposed deal would include newly issued Frontier debt and common stock.

Frontier tried to merge with Spirit in 2022 but was outbid by JetBlue. However, the Justice Department sued to block the $3.8 billion JetBlue deal, saying it would drive up prices for Spirit customers who depend on low fares, and a federal judge agreed in January. JetBlue and Spirit dropped their merger bid two months later.

Spirit filed for bankruptcy protection in November. The biggest U.S. budget airline, Spirit filed a Chapter 11 bankruptcy petition 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.

Frontier is optimistic that it can get a deal done this time around.

“This proposal reflects a compelling opportunity that will result in more value than Spirit’s standalone plan by creating a stronger low fare airline with the long-term viability to compete more effectively and enter new markets at scale,” Frontier Chair Bill