Spirit Airlines has once again rejected a takeover bid by rival ultra-low-cost airline Frontier, saying that it will pursue its Chapter 11 bankruptcy and recapitalization alone.
It emerged late last month that Denver-based Frontier Airlines wanted to acquire embattled competitor Spirit in a $400 million deal that would create the fifth-largest airline in the United States and the first low-cost carrier capable of taking on the dominant Big Four carriers.
At the time, Spirit’s chief executive Ted Christie had seemed less than impressed with the offer, describing it as “woefully insufficient” in correspondence between the airlines that was made public in SEC filings.
This is the third time that Frontier has made an offer to acquire Spirit, with the first attempt upended by a left-field bid from JetBlue. That deal, however, ended in disaster when the Department of Justice mounted and won a legal bid to block the merger over competition fears.
Last summer, Frontier again returned to make an offer to acquire Spirit in a deal which would have valued Spirit at $580 million and given shareholders a 26.5% stake in the combined company. Following months of talks, however, Frontier unilaterally decided to walk away from negotiations and Spirit eventually went down the Chapter 11 bankruptcy path in a pre-packaged deal.
Frontier then made a third unsolicited offer to acquire Spirit in early 2025, but this time, the airline was only offering $400 million and 19% in equity for Frontier’s shareholders.
In response, Spirit made a counter proposal but on February 10, Frontier Airlines rejected it in its entirety.
“Spirit will continue swiftly to advance and conclude its restructuring process, which will significantly deleverage the Company and position it for long-term success,” the airline said in a statement on Tuesday.
Nearly all of Spirit’s voting creditors approve the plan and a confirmation hearing of Spirit’s plan of reorganization is scheduled to take place on Thursday.
I don’t think Spirit can make it on its own, they will emerge from bankruptcy but go back into it at some point again.
NK’s hub airport FLL has wild growth plans including a new people mover train. FLL’s CPE (cost per enplanement) is projected to jump nearly 300% over the next 5-10 years. At those cost levels it’s virtually untenable for NK to survive with FLL as its main hub and I expect B6 to struggle mightily there there. Local leaders and the FLL Director have visions of grandeur that are going to lead to its death spiral because they think they should be MIA but they’re customer base is very very different.