Frontier Airlines (F9, Denver International) is considering making a renewed bid for Spirit Airlines (NK, Fort Lauderdale International), according to the Wall Street Journal, which reports that new merger discussions are at an early stage and that a deal may not materialise.
Citing "people familiar with the matter," the WSJ said that if a deal is reached it would likely be part of debt restructuring during a potential Chapter 11 bankruptcy protection procedure. Spirit has struggled to turn a profit recently and is reportedly discussing strategies with bondholder advisers to address upcoming debt maturities, including possible bankruptcy protection.
Frontier Airlines declined to comment, while Spirit Airlines did not respond by the time of publication.
Spirit Airlines came close to a merger in 2022 with Indigo Partners-controlled Frontier Airlines Holdings which was terminated after JetBlue Airways (B6, New York JFK) won a bidding war. However, in January 2024, a US court ruled against the proposed USD3.8 billion merger between Spirit and JetBlue, agreeing with the concerns of the United States Department of Justice that it would reduce competition in the US airline industry.
As previously reported, Spirit is facing financial challenges including losses, declining revenues, and a USD3.3 billion debt pile. More than USD1.1 billion in secured bonds is set to mature within the year. The carrier last week reached an agreement with its credit card processor, US Bank National Association, to extend a debt refinancing deadline by two months until December 23, 2024.
