Frontier Says It’s Making Another Attempt to Buy Spirit

Spirit, a Florida-based carrier, entered Chapter 11 bankruptcy proceedings in November 2024.

In a release, Frontier said it made a “compelling” offer to combine with Spirit by issuing new Frontier debt and common stock. Frontier said combining the competing ultra-low-cost carrier would create “very significant synergies.”

Representatives of both Frontier and Spirit declined to comment further on the proposed transaction.

“We have long believed a combination with Spirit would allow us to unlock additional value creation opportunities,” Frontier CEO Barry Biffle said in a release. “As a combined airline, we would be positioned to offer more options and deeper savings, as well as an enhanced travel experience with more reliable service.”

Also on Wednesday, Frontier published a number of documents related to the potential transaction with the U.S. Securities and Exchange Commission (SEC). The filing said both companies have spoken about a proposal that would be financed by the issuance of $400 million in debt by Frontier and 19 percent of Frontier’s common equity.

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In a Jan. 7 letter to Spirit’s leadership, CEO Biffle and Bill Franke, the chairman of Frontier’s board, said the aggregate value of that transaction would be “no less than $2.162 billion.”

A Jan. 11 letter from Spirit CEO Ted Christie and Mac Gardner, the chairman of Spirit’s board, released in the Wednesday SEC filings, said the deal “falls far short” of the distressed airline’s current financial needs.

The SEC disclosure included numerous other materials, including emails and letters between the leadership and two presentations made to Spirit shareholders. However, the final item in the packet is a letter dated Jan. 28 from Christie and Gardner, which says Frontier has addressed “virtually none” of the “many deficiencies” that Spirit sees in the acquisition plan.

The letter dismissed the current proposal, which it called “both inadequate and unactionable,” but it left the door open for future talks.

“Should you wish to make a revised proposal that is in fact capable of closing, and addresses the material deficiencies catalogued here and in our many communications, we would be happy to consider it and again work to activate our stakeholders to do so as well,” the letter stated.

In the past, Frontier made an offer to acquire Spirit, but JetBlue Airways Corp. ultimately outbid it. The Long Island City, New York-based airline’s $3.8 billion deal was ultimately dashed in January 2024 by a federal judge. U.S. District Judge William Young blocked the transaction on anti-trust grounds.

When Spirit last filed disclosures with the SEC, it told investors it had about $2.54 billion in overall liabilities, including $1.25 billion in long-term debt and leases. That was about twice its overall assets, valued at about $1.21 billion.

According to its latest quarterly report, filed with the SEC on Oct. 29, 2024, Frontier was profitable through the first nine months of 2024. Frontier reported a net income (profit) of $31 million on overall revenue of about $2.8 billion through Sept. 30, 2024.

By comparison, according to the company’s most recent filing published with the SEC on Nov. 25, 2024, Spirit said it had lost about $643.8 million on about $3.7 billion in overall revenue through the first nine months of 2024.

Frontier is due to issue its next earnings report on Feb. 7.