Frontier Airlines is making another attempt to merge with Spirit Airlines, offering a $2.1 billion deal in stock and cash.
If successful, the merger would unite the two largest ultra-low-cost carriers in the United States, creating a budget airline powerhouse.
However, Spirit has rejected the initial offer, stating that it was too low—but the door remains open for further negotiations.
A Second Chance After a Failed Deal
This is not the first time Frontier has tried to acquire Spirit. In 2022, the two airlines announced a $2.9 billion merger, but the deal fell apart when JetBlue Airways made a higher counteroffer. Spirit walked away in favor of JetBlue, only for the Justice Department to block the merger on antitrust grounds.
Since then, Spirit has struggled financially, facing rising debt and fierce competition in the budget airline market. In November 2023, Spirit filed for bankruptcy, forcing the airline to explore ways to restructure its finances.
Frontier seized the opportunity, submitting a fresh bid on January 7, 2025, in hopes of finally securing the long-discussed merger.
Why the Merger Makes Sense
If the two airlines join forces, they would become the fifth-largest airline in the U.S., surpassing Alaska Airlines. Together, Spirit and Frontier control 8.5% of the domestic air travel market, still far behind industry giants like United, Delta, American, and Southwest, but large enough to increase competition.
According to an aviation analysis commissioned by Frontier, the merger could generate an additional $500 million in revenue while cutting costs by $100 million annually. The two airlines already operate with a similar business model, both using Airbus A320 aircraft and offering ultra-low fares with paid add-ons. Additionally, they only overlap on 18% of their routes, meaning the merger could help expand their networks rather than eliminate competition.
Spirit’s Concerns and the Road Ahead
Despite the potential benefits, Spirit’s leadership is not fully convinced. The airline rejected the $2.1 billion offer, arguing that it was too low and carried significant financial risks. Spirit’s executives, Ted Christie and Mac Gardner, also pointed out that Frontier’s offer required Spirit’s creditors to invest $350 million, a condition they were unwilling to meet.
However, Spirit made it clear that they are open to further discussions, leaving room for Frontier to adjust its offer. Analysts believe that the rejection is not a definitive “no” but rather an invitation to negotiate a better deal.
Will the U.S. Government Allow It?
Even if Frontier and Spirit agree on new terms, the merger still faces regulatory scrutiny. The Biden administration has aggressively challenged airline mergers, including blocking JetBlue’s attempt to acquire Spirit and a partnership between JetBlue and American Airlines. However, with the 2024 presidential election behind, a change in administration could lead to a more merger-friendly regulatory environment.
A bankruptcy court hearing for Spirit is scheduled for February 13, which could determine the airline’s next steps. If negotiations continue, Frontier may need to sweeten the deal to secure Spirit’s approval and regulatory clearance.
For now, the future of Spirit Airlines remains uncertain—whether it will merge with Frontier, restructure on its own, or explore another buyer is still up in the air.
