DENVER- Frontier Group Holdings presents a merger proposal to Spirit Airlines (NK) through a combination of new debt issuance and common stock.
The proposal aims to surpass Spirit’s standalone restructuring plan by offering enhanced value to Spirit’s financial stakeholders.
Photo: Clément AlloingFrontier Spirit Airlines Merger
Bill Franke, Frontier’s Board Chair and Indigo Partners’ managing partner emphasizes the merger’s potential to create a more competitive low-fare airline with enhanced market penetration capabilities. The proposal promises significant operational synergies through combined airline operations.
Frontier CEO Barry Biffle highlights the merger’s potential to expand service offerings, reduce costs, and improve travel reliability. The proposed combination builds upon Frontier’s existing business strategy while targeting expanded growth opportunities.
Frontier has engaged with Spirit’s board, management team, and financial stakeholders regarding the proposal. The airline has shared detailed materials demonstrating the merger benefits and analyzing Spirit’s standalone restructuring plan, which Frontier argues would result in an unprofitable airline burdened by high debt.
The proposal documentation has been filed with the Securities and Exchange Commission through Form 8-K. Frontier expresses readiness for continued discussions to reach a prompt agreement that benefits consumers, employees, communities, partners, creditors, and shareholders.
Photo: Clément AlloingFormal Merger Letter
Frontier Airlines delivers a formal merger proposal letter to Spirit Airlines’ Chair and CEO, emphasizing the shared recognition of strategic benefits in combining both airlines. The communication follows previous discussions between the companies and their respective advisors.
The letter, signed by Frontier’s Board Chair Bill Franke and CEO Barry Biffle, stresses the proposal’s superior value compared to Spirit’s current bankruptcy court restructuring plan. Frontier expresses readiness for comprehensive negotiations while noting the absence of a specific counterproposal from Spirit.
Frontier warns about Spirit’s potential emergence from bankruptcy as a heavily leveraged, operationally unprofitable entity under its standalone plan. The letter emphasizes urgency in reaching an agreement, citing concerns about Spirit’s financial viability without the merger.
Citigroup Global Markets Inc. serves as Frontier’s financial advisor for the proposed transaction, with Latham & Watkins LLP providing legal counsel.
Photo: By Tomás Del Coro from Las Vegas, Nevada, USA – N619NK Spirit Airlines Airbus A320-232 s/n 5517, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=77926311Failed Talks
Last year in October, Spirit Airlines initiated new merger discussions with Frontier Airlines, reviving their 2022 consolidation attempt that aimed to create the fifth-largest U.S. carrier. The Wall Street Journal reports preliminary talks as Spirit confronts potential bankruptcy proceedings.
However, the talk did not go through and Spirit Airlines filed for bankruptcy on November 18, 2024.
The carriers operate compatible ultra-low-cost business models with aligned Airbus narrowbody fleets. The proposed merger integrates with Spirit’s ongoing financial restructuring efforts and bondholder negotiations regarding bankruptcy terms.
Frontier Airlines maintains a network of 78 domestic and 18 international routes across 12 countries from its Denver hub, with additional bases in Las Vegas, Orlando, and Philadelphia. Spirit Airlines serves 57 domestic and 28 international destinations spanning 17 countries, operating primarily from Fort Lauderdale with six secondary hubs.
The airlines exhibit complementary route structures, with Frontier concentrating on regional services while Spirit balances domestic and international operations. Both carriers regularly adjust their route networks and flight frequencies to match market demands.
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