Frontier Makes Another Bid to Merge with Spirit Airlines

For the second time in three years, Frontier Airlines is attempting to merge with Spirit Airlines. Frontier confirmed its bid on Wednesday, coming after Spirit filed for bankruptcy protection late last year following the collapse of its acquisition by JetBlue. While the bid amount was not disclosed, Frontier's offer is said to be financed through newly issued debt and common stock. This merger attempt marks another chapter in the ongoing saga of the low-cost airline industry’s consolidation.

Spirit Airlines had been struggling financially, particularly as it emerged from the pandemic. The proposed deal with Frontier was initially seen as a lifeline for the airline, offering a path toward stability and growth. However, previous merger talks hit a wall when Spirit’s shareholders rejected the proposal, opting instead for JetBlue's $3.8 billion acquisition offer. JetBlue’s attempt to buy Spirit, however, was ultimately blocked by the U.S. Department of Justice over concerns about reduced competition in the airline industry.

With the failed JetBlue deal and Spirit’s subsequent bankruptcy, Frontier sees another opportunity to create a stronger low-cost carrier. Bill Franke, chair of Frontier’s board of directors, expressed confidence that the merger would secure Spirit’s future while enhancing both companies’ ability to compete on a larger scale. He added that the deal would allow the new combined entity to enter new markets more effectively and ensure long-term viability. Frontier is hopeful that discussions can move forward quickly to reach an agreement that benefits all stakeholders, including consumers, employees, and shareholders.

The proposed merger follows a history of fluctuating bids and regulatory challenges. Spirit and Frontier’s previous attempt to merge in 2022 was stalled by shareholder disapproval. Shortly after, JetBlue stepped in with a higher offer, but the deal faced significant regulatory hurdles and was eventually abandoned in March 2024. Despite the setbacks, JetBlue CEO Joanna Geraghty expressed pride in the effort, noting that the merger was designed to create a strong competitor to the nation’s largest airlines. She acknowledged, however, that regulatory challenges made it impossible to complete the transaction.

With a new administration now in power in the U.S., regulatory conditions could shift in favor of airline mergers. Frontier’s renewed attempt to merge with Spirit may find more favorable reception in the current political climate, as the airline industry continues to recover from the pandemic and faces ongoing challenges. The outcome of this latest bid could reshape the landscape of the ultra-low-cost airline sector, impacting both competition and pricing in the industry.