Bankruptcy and restructuring on the road, Frontier (ULCC.US) once again rejects the olive branch from Spirit (SAVEQ.US) and insists on "flying solo".

On February 11, Spirit Airlines (SAVEQ.US) announced their rejection of Frontier Group's (ULCC.US) merger proposal again, stating that the proposal offered less value to the company's stakeholders than their ongoing restructuring plan envisioned. It was reported that Frontier submitted a new proposal to Spirit on February 4, proposing that stakeholders of Spirit would receive $4 billion in debt and a 19% stake in Frontier after the merger. The offer eliminated the requirement for Spirit to complete a $350 million equity issuance and use the proceeds to exit debtor-in-possession facilities, but it required a waiver of the $35 million termination fee that needed bankruptcy court approval. Spirit Airlines filed for bankruptcy in November 2024, and the company stated that the new proposal did not address certain significant risks and issues previously identified, which would result in prolonged Chapter 11 proceedings, increased costs, and increased uncertainty. On February 7, 2025, Spirit made a counter proposal to Frontier, offering their shareholders $6 billion in debt and $11.85 billion in equity, but this was rejected by Frontier. Currently, Spirit is seeking to undergo an independent capital restructuring and plans to complete the process in the first quarter of 2025. It is worth mentioning that Spirit Airlines had previously rejected a second acquisition proposal from competitor Frontier Group (ULCC.US) on January 29, 2025. According to Frontier's proposal at the time, Spirit shareholders would receive $4 billion in Frontier debt and stock, and hold a 19% stake in Frontier. However, Spirit believed that the value provided to shareholders in this proposal was lower than their bankruptcy restructuring plan, and stated that they expected to complete the restructuring within this quarter. Frontier had originally proposed to acquire Spirit in 2022, but ultimately JetBlue Airways Corporation (JBLU.US) made a higher bid. However, in early 2024, a US federal court blocked the merger between JetBlue Airways Corporation and Spirit, ruling that the transaction could harm the interests of Spirit's primarily price-sensitive consumers.