Here We Go Again: Frontier Makes Another Bid for Spirit Airlines
Since presenting the proposal, Frontier has held discussions with Spirit’s board of directors, executive team, and key creditors.
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Frontier Group Holdings, the parent company of Frontier Airlines, confirmed that it has submitted a proposal to merge with Spirit Airlines by issuing new debt and Frontier common stock.
The proposed transaction would benefit Spirit’s creditors and investors more than its standalone restructuring plan. According to Frontier, the merger would create a more competitive low-cost airline, generating greater operational synergies and enabling expansion into new markets.
Bill Franke, chairman of Frontier’s board and managing partner of Indigo Partners LLC, emphasized that the proposal represents a "strategic opportunity" to strengthen the low-fare sector and improve the long-term viability of both airlines. "We are prepared to continue discussions with Spirit and its creditors to reach an agreement that benefits consumers, employees, communities, partners, and shareholders," he stated.
Meanwhile, Frontier CEO Barry Biffle reaffirmed that the merger with Spirit would create new value opportunities. "As a combined airline, we could offer more choices, greater savings, and a more reliable service for passengers," he said.
Since submitting the proposal, Frontier has engaged in discussions with Spirit’s board of directors, executive team, and key creditors. The company also shared financial analyses based on court documents from the bankrupt airline, arguing that Spirit’s standalone restructuring plan would leave it with a high debt burden and limited profitability.
A history of failed mergers
Spirit Airlines has attempted to merge twice in recent years. In February 2022, it announced an agreement to merge with Frontier Airlines in a deal valued at approximately $6.6 billion. The goal was to create the fifth-largest airline in the U.S., with a low-cost structure and greater expansion capacity. However, the offer faced resistance from shareholders and caught the attention of JetBlue Airways, which made a competing bid in April of that year.
JetBlue proposed acquiring Spirit for approximately $3.8 billion in cash, arguing that its offer was more favorable to Spirit’s shareholders. Although Spirit initially rejected JetBlue’s bid due to regulatory concerns, JetBlue increased its offer multiple times. Eventually, in July 2022, Spirit accepted the proposal, canceling its deal with Frontier. However, the merger faced strong regulatory hurdles over concerns about competition in the airline market.
In 2023, the U.S. Department of Justice sued to block the merger between Spirit and JetBlue, arguing that it would reduce competition and increase fares for consumers. In January 2024, a federal judge ruled against the merger, leading both airlines to cancel the agreement in March of that year. With the JetBlue deal off the table, Spirit Airlines has struggled financially, leading to these renewed discussions about a potential merger with Frontier in 2025.
Frontier pushes for negotiations
As part of the process, Frontier submitted a formal letter to Spirit’s executives outlining the terms of its proposal and its willingness to continue negotiations. In the document, Frontier emphasized that its offer would provide greater value to Spirit’s shareholders and expressed concerns about the airline’s financial viability if it proceeded with its current plan. "Time is a critical factor," Frontier’s executives concluded.
For the transaction, Citigroup Global Markets, Inc. is acting as Frontier’s financial advisor, while Latham & Watkins LLP is providing legal counsel.
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