Frontier Airlines Considers Merger with Spirit Airlines

According to a report by the Wall Street Journal on Tuesday, Frontier Airlines is looking into a renewed bid for Spirit Airlines (NYSE:SAVE).

The two budget carriers have engaged in preliminary discussions regarding a potential merger; however, the conversations are still in the early stages, and there is no guarantee of a finalized agreement, as noted by the WSJ.

If Frontier and Spirit reach an agreement, it will likely be part of Spirit’s efforts to restructure its debts and liabilities amid a bankruptcy situation, the report indicated.

As of now, neither Spirit nor Frontier has responded to inquiries from Reuters.

Spirit Airlines was close to merging with Frontier Group Holdings in 2022, but that deal collapsed after JetBlue won the bidding battle for Spirit.

This report surfaces as Spirit Airlines faces a precarious situation following the failed $3.8 billion merger with JetBlue Airways (NASDAQ:JBLU), which was blocked by the U.S. Department of Justice in March.

Earlier this month, the Journal reported that Spirit was discussing potential bankruptcy terms with its bondholders due to the unsuccessful merger with JetBlue.

Despite a high demand for travel, Spirit has struggled financially, failing to record a profit in five of the last six quarters, prompting concerns about its ability to address upcoming debt maturities.

Last week, the ultra-low-cost carrier announced it reached an agreement with its credit card processor, U.S. Bank National Association, extending its debt refinancing deadline by two months, now due on December 23.