Frontier said it is acting swiftly to make reach a merger deal with Spirit Airlines.
“We obviously know Spirit very well and are prepared to move quickly to engage to make this compelling opportunity happen,” said Frontier CEO Barry Biffle in its fourth quarter earnings call.
Biffle pointed to Spirit extending the tender deadline for their equity rights offering by a week, it stated in an SEC filing on February 6, 2025. “We stand ready to engage with Spirit regarding our proposal,” he added.
Biffle maintained that the proposal would offer more value than Spirit's current standalone plan. “This includes substantial value for equity holders who will otherwise receive nothing through Spirit's plan with the bankruptcy court,” he said. “As a combined airline, we would be positioned to provide more options and deeper savings as well as enhanced travel experience and service for consumers.”
Spirit Airlines had rejected Frontier's second proposal to merge the two US low-cost carriers, the airline revealed in an SEC filing on January 29, 2025, adding it planned to emerge from its bankruptcy proceedings as a standalone company.
Spirit filed for bankruptcy in November last year and is working on a deal with bondholders to swap $795 million of its debt for equity as part of its reorganisation. On January 16, 2025, Spirit secured an additional $300 million in financing from its exit revolving credit facility upon exit of its financial restructuring. Spirit said that with this now secured, the combined companies would be “burdened” by the additional debt.
In a joint letter from Franke and Frontier CEO Barry Biffle, addressed to Gardner and Christie, they said that Spirit's standalone plan means it will emerge “highly levered, losing money at the operating level" and said Frontier would not pursue a merger with Spirit in this state. “As a result, time is of the essence,” the letter concluded.
Spirit said it would be “happy” to consider a revised proposal from Frontier. In addition, Frontier said it would “stand ready” to negotiate any and all parts of its offer.