Frontier and Spirit and Are Once Again Discussing Potential Merger
Frontier Airlines is once again exploring the possibility of a merger with Spirit Airlines. The news was first reported by the Wall Street Journal, citing people familiar with the matter.
Spirit has been losing money despite strong travel demand and, raising doubts about its ability to manage looming debt maturities.
The two budget carriers have had previous discussions about a possible merger, first in 2016 and then again in 2022 when a $2.9 billion merger agreement fell apart after a JetBlue bid.
While JetBlue and Spirit reached an agreement, they ended their proposed $3.8 billion merger in March of this year, just weeks after a federal judge blocked the deal.
If a deal does go through this time around between Frontier and Spirit, it would likely happen as part of Spirit restructuring its debt and other liabilities.
Earlier this month, Spirit stock tanked following a report that the company was exploring the possibility of filing for bankruptcy. But the ultra-low-cost carrier said last week it had reached an agreement to extend a debt refinancing deadline by two months until Dec. 23.
However, it still sees tough times ahead. The airline has warned of a bigger third-quarter loss due to a tough race for price-sensitive leisure travelers and an oversupply of airline seats in the domestic market.
Spirit Airlines currently ranks 6th with a 5.1% domestic market share, while Frontier Airlines is 8th with 3.6%. A merger would make them the 5th largest domestic carrier after Delta, Southwest, American and United.
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