After the Spirit Airlines ((save) Announced that Chapter 11 protection had been applied for last November, and rumors about the future of the low-cost airline were feverish.
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While strong brands and loyal customer base are unlikely to shut down completely, investors who will be able to get struggling airlines back on track are limited – now, the spirit rejects Frontier’s merger offer ((Furlong) The second time got smaller.
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Why the spirit rejects the proposal of the border, twice
The competitive Denver-based low-cost airline first offered to buy Spirit Airlines in 2022, but it sold for $3.8 billion ((jblu) trade. A federal judge eventually blocked the deal over antitrust concerns.
In January 2025, Frontier returned to the table and announced that “a convincing proposal was made to combine with the spirit by issuing newly issued border debt and common stock.”
Related: Investors call up Spirit Airlines CEO’s pre-bank bonus
Spirit confirmed that the offer includes $400 million in mortgage debt and approximately 19% of Frontier shares to repay Spirit Preditors, totaling $2.1 billion.
The proposal fell from $580 million in collection debt and 26.5% equity, and Frontier reportedly offered Spirit in the summer of 2024 after Spirit announced the Spirit announcement.
According to the airline executive, the offer is not sufficient because it is based on a $350 million debt financing, which is a spirit of demanding that the debtor financing that continues to operate will be resolved before the transaction is completed.
The fallout talks between the two airlines resulted in the agreement not making this claim and waived the $35 million termination fee approved by the court, but the spirit remains unhappy with the total amount provided. After years of decline in sales, it has been in debt by $4 billion and recently delayed by $1.1 billion.
Spirit said “the value of the new proposal will be reduced” and “substantially more expensive”.
“The new proposal is worth more to the company’s stakeholders than the company’s existing restructuring plan considers, uncertainty about time and completion will lead to expansion and materially more expensive and uncertain Chapter 11 lawsuits, and The Chapter 11 lawsuit was related to the relevant Chapter 11 lawsuit, and the relevant uncertainty, and said in a statement to Spirit.
Spirit also said it submitted objections, in which shareholders would receive $600 million in debt and $1.185 billion in equity, but the border eventually rejected it and was generally reluctant to negotiate beyond what had agreed.
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The airline further stated: “The spiritual reverse proposes a market-based mechanism to determine the number of equity in the consolidated company interests proposed as a spiritual stakeholder.”
With the deadlock between the two airlines, Spirit rejected Frontier’s merger offer, and if you look back on the 2022 attempt, it turned down the second or third time. The direct restructuring plan proposed by Spirit’s first filing for bankruptcy involves converting $795 million in debt into Spiritual Equality shareholders. Direct protections allow it to postpone the most imminent debt deadline.
Frontier said in a statement about the rejected plan: “Remaining[s] Confidence that the “merged airline” will create more value than Spirit’s independent plan. ”
Related: Senior Fund Manager Issues Dire S&P 500 Warnings 2025
