Will the third try be the charm?
Spirit Airlines is discussing a possible merger with rival ultra-low-cost airline Frontier. Bloomberg first reported Tuesday.
The discussions would mark the third time in as many years that the two airlines have discussed a merger. He first failed after Spirit accepted a separate proposal from JetBlue, which was ultimately blocked by a federal judge on antitrust grounds.
Frontier approached Spirit about merging again and made a $2.2 billion offer in January, shortly after Spirit filed for bankruptcy. Spirit rejected Frontier’s proposal as “inappropriate and unactionable.”
However, the current offer comes at a time when airlines face a dramatically different landscape. Spirit is under Chapter 11 bankruptcy protection for the second time in two years. Industry observers have closely monitored the airline’s cash reserves, but the airline gained some breathing room Monday when it gained access to $50 million in financing under a modified debtor-in-possession agreement.
Known for its bright yellow planes, extra fares and no-frills service, the airline has frequently been the butt of late-night television jokes, but it has also over the past year adopted benefits that more closely reflect its main rivals. The airline has worked aggressively to cut costs this year, cutting jobs and shrinking its network to become a smaller, more efficient airline that has nevertheless struggled to curb its losses. In October, the airline lost $3.1 million a day in operations, according to a filing with the Securities and Exchange Commission.
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Spirit has seen a merger as a possible solution to its unstable financial situation and has has reportedly been exploring options “with several interested counterparts.”
Frontier itself has struggled during a tough year for low-cost airlines, which have lacked the premium income from wealthier travelers that has disproportionately boosted the bottom lines of its biggest rivals. Furthermore, the introduction of basic economy by traditional airlines has made it even more difficult for low-cost airlines to compete. In that context, Frontier shares have fallen more than 28% since the beginning of 2025 and the company lost $190 million in the first nine months of the year.
Frontier announced Monday that former CEO Barry Biffle I would resign immediatelyalthough no reason was given for announcing the abrupt change. Frontier President James Dempsey, an industry veteran who previously worked at European low-cost airline Ryanair, will take over as interim CEO of the airline.
It was not immediately clear how the merger would be structured or what it would mean for the airlines’ separate brands, so stay tuned to TPG for the latest.
