Frontier Buying Spirit Airlines May Still Be on the Table

Spirit Airlines has been in financial trouble for the last several years. Unable to pull away from it, the budget airline is not only teetering toward bankruptcy, it’s also cutting jobs and selling aircraft.

However, there is a potential buyer waiting in the wings. Reportedly, Frontier Airlines might be again interested in swallowing up the struggling carrier. Frontier previously offered to buy Spirit in February 2022 but was outbid by fellow budget airline JetBlue.

For now, Spirit is on track to cut costs by nearly $80 million, which will be mostly accomplished by laying off workers. While the airline did not give an official number, it did note capacity will be significantly lower in 2025 compared to 2024.

By selling 23 older craft in its fleet, Spirit will get a needed cash injection. According to the company’s filing with the Securities and Exchange Commission, the sale of the jets could bring in $519 million.

Hoping to avoid the bankruptcy route, Spirit is now negotiating with bondholders and trying to restructure its debt. The airline has even convinced its credit card processor to delay any adverse action while it figures out how to pay $1.1 billion of bonds by the end of the year.

A Frontier-Spirit Merger

Ever since the pandemic changed the travel industry, labor costs began to increase, and the airline had to ground multiple jets due to engine problems, Spirit Airlines has been unable to adjust and make a profit. The advertised ultra-low fares the carrier became famous for began hurting the bottom line.

Anticipating an opportunity, Frontier showed up with a proposal worth $2.9 billion. Yet it was JetBlue that swooped in and successfully wooed Spirit investors. However, fearing reduced competition would hurt consumers, the U.S. Department of Justice grounded the JetBlue-Spirit merger deal earlier this year.

Reportedly, Frontier is now back in talks to absorb Spirit. If such a merger deal comes to fruition, it will have to resolve Spirit’s outstanding debt and other liabilities as well as get approval from the U.S. government. Neither airline has officially stated that renewed merger talks are actually in the works.