Frontier Airlines Ruthlessly REJECTED And Ghosted By Bankrupt Spirit After Monumental Bid…

Frontier Airlines is back for another round of rejection, sliding into Spirit Airlines’ DMs with a merger proposal that has officially gotten left on read. Spirit, currently battling through Chapter 11 bankruptcy, swatted down Frontier’s advances on Wednesday, saying the deal would be less valuable to its stakeholders than its existing plan to crawl out of financial purgatory. Translation: “We’d rather take our chances with bankruptcy court than deal with you.”

(Source: Giphy) 

Now if this feels like déjà vu, that’s because it is. Frontier tried to lock down Spirit back in 2022, but JetBlue swooped in with $3.8 billion and a promise of better synergy—however, that deal got obliterated earlier last year when regulators decided it would make budget air travel about as affordable as a first-class seat on Emirates. Spirit then filed for bankruptcy in November, and now it seems Frontier is hoping to capitalize on Spirit’s financial woes to finally seal the deal.

The pitch this time around? A mix of $400 million in debt, a 19% stake in Frontier for Spirit’s stakeholders, and a $350 million stock offering to chip away at Spirit’s debt. Oh, and whatever scraps are left would go to the balance sheet of the new combined company. Frontier’s Chairman Bill Franke explained how the merger would create a “stronger low-fare airline” to keep up with competition—but Spirit’s response gave them the good ole Denzel Washington treatment. 

(Source: Giphy) 

Smart? Ehh. I don’t think so. Spirit has lost more than $2.5 billion since 2020, faces over $1 billion in looming debt payments, and has been shedding assets to stay afloat. It’s also dealing with a brutal leisure travel market, where even its core budget-conscious customers are being poached by full-service airlines offering stripped-down “basic economy” tickets. Add to that the fact that U.S. airfare prices have sagged thanks to a glut of flights, and you’ve got a recipe for financial misery. So really, Frontier just gave them a lifeboat that Spirit said “Nah” to. 

On the other hand, Frontier seems unfazed by the let down.The company claims its proposal is the better path forward, and it’s reportedly been chatting with Spirit’s board, management, and financial stakeholders to make its case. But Spirit’s regulatory filing made it clear: barring any new developments, it’s sticking to its plan to emerge from bankruptcy in early 2025. Yeah… we’ll see about that. 

(Source: Fox News) 

Now with that said, let’s not pretend that Frontier is winning the “Airline of the Year” award either. Both carriers are struggling to fully recover from the pandemic, while larger competitors keep eating their lunch by offering cheap tickets without the ULCC-level indignities, like paying extra to breathe air on the plane. Which is why upon the news of the bid, Frontier’s stock saw some life, popping 6%. 

Of course, although Spirit is playing hard to get right now, the question remains: if Spirit disappeared tomorrow, would anyone even notice? Sure, its $9 “Fare Club” has lured plenty of travelers looking for rock-bottom prices, its reputation as a flying Greyhound bus hasn’t exactly won over the masses. Regulators, however, seem keen on keeping Spirit (or at least its concept) alive, arguing that budget airlines are critical to maintaining competition and keeping ticket prices in check.

(Source: Giphy) 

Meaning, Frontier might not be out of the race yet. But if Spirit keeps ghosting, they may become a ghost themselves. In the meantime, keep an eye on this story and we’ll update you when more information comes out. For now, place your bets accordingly, and as always, stay safe and stay frosty, friends! Until next time… 

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Stocks.News does not hold positions in companies mentioned in the article.