Spirit Airlines has recently made a significant decision regarding a merger offer from Frontier Group, the parent company of Frontier Airlines. The latest proposal from Frontier was rejected by Spirit, as the airline deemed it to be less beneficial to its shareholders compared to its current restructuring plan.

In a statement released on February 11, 2025, Spirit Airlines updated the public on its ongoing restructuring process in light of the new proposal from Frontier Group. This new offer mirrored a previous proposal made on February 4, 2025, which included $400 million in second-lien debt for Spirit’s stakeholders and a 19% stake in Frontier’s common equity. While this offer aimed to eliminate the need for Spirit's planned $350 million equity rights offering, it also required a waiver of the Bankruptcy Court-approved $35 million termination fee.

However, Spirit raised concerns that Frontier's proposal did not adequately address certain risks and issues previously identified by the airline. According to Spirit, the offer would deliver less value to the company’s stakeholders than what was envisaged in its existing reorganization plan. The airline also voiced apprehensions about the potential delays and increased costs associated with the proposal, as well as uncertainties about obtaining necessary regulatory and court approvals.

This is not the first time Spirit has turned down a merger proposal from Frontier Airlines. Previous to this, on January 31, 2025, Spirit rejected a similar offer from Frontier Group, deeming it insufficient. Despite this rejection, Spirit countered with its own proposal on February 7, 2025, offering a total value of $600 million in debt and $1.185 billion in equity to its stakeholders. This counterproposal would have allowed Spirit to bypass its planned equity rights offering, but it required Frontier to pay a $35 million termination fee.

Frontier, however, refused Spirit’s counterproposal on February 10, 2025, and reiterated its original merger offer. As Spirit moves forward with its restructuring process, the airline remains focused on positioning itself for long-term success. A hearing to confirm Spirit’s reorganization plan is scheduled for February 13, 2025, with almost all voting creditors, representing approximately 99.99% of the votes, in approval of the plan. With only two objections left to resolve, Spirit expects to complete its restructuring process in the first quarter of 2025.