Frontier (ULCC.US) repeatedly offers Spirit (SAVEQ.US) a chance to join its bankruptcy restructuring efforts, but Spirit is determined to pursue its own path.

On February 12, 2025, Spirit Airlines (SAVEQ.US) once again declined Frontier Group's (ULCC.US) merger proposal, believing it would offer less value to its stakeholders than its ongoing restructuring plan. Frontier had submitted a new proposal to Spirit on February 4, offering Spirit's stakeholders $400 million in debt and 19% of Frontier's shares in a merger. The offer canceled Spirit's requirement to complete a $350 million equity offering and use the proceeds to exit the debtor-in-possession facility, but required a $35 million termination fee approved by the bankruptcy court. Spirit, which filed for bankruptcy in November 2024, said the new proposal did not address certain significant risks and issues identified earlier, which would result in an extended Chapter 11 process, increased costs, and increased uncertainty. On February 7, 2025, Spirit submitted a counterproposal to Frontier, offering its shareholders $600 million in debt and $1.185 billion in equity, but it was rejected by Frontier. Currently, Spirit is seeking an independent capital restructuring and plans to complete the process in the first quarter of 2025. It is worth noting that Spirit Airlines previously announced on January 29, 2025, that it had rejected Frontier Group's (ULCC.US) second merger proposal. According to Frontier's proposal at the time, Spirit's shareholders would receive $400 million in Frontier debt and stock and hold 19% of Frontier. However, Spirit believed the proposal provided less value to its shareholders than its bankruptcy restructuring plan and said it expected to complete the restructuring in the current quarter. Frontier first proposed acquiring Spirit in 2022, but ultimately Jetblue Airways (JBLU.US) made a higher offer. However, in early 2024, the U.S. federal court blocked Jetblue's merger with Spirit, ruling that the transaction could harm Spirit's price-sensitive consumers.