Frontier Airlines has reignited its proposal to merge with Spirit Airlines, a fellow budget carrier currently navigating bankruptcy. Spirit Airlines filed for bankruptcy protection in November, seeking refuge from financial turmoil exacerbated by post-pandemic challenges. Meanwhile, Frontier Airlines aims to reconfigure its business strategy, which has historically emphasized low fares paired with additional fees for extras. Both airlines have shared struggles in adapting to shifting consumer preferences and rising operational costs.
Spirit has been working to reshape its business model by eliminating cancellation and change fees for certain tickets. However, the airline has faced significant obstacles, including a Pratt & Whitney engine recall that has grounded dozens of its jets. Frontier Airlines, in an effort to streamline operations, has recently cut costs by shedding 200 jobs and selling some of its Airbus aircraft. The airline has also introduced a premium section at the front of its planes, aiming to attract customers willing to pay more for enhanced comfort.
The merger between Frontier and Spirit was initially announced in 2022 but was disrupted by a competing offer from JetBlue Airways. Despite this setback, Frontier has continued discussions with Spirit’s board and executives since renewing its proposal. However, Spirit executives, including Chairman Mac Gardner and CEO Ted Christie, have dismissed the deal, labeling the terms as "inadequate and unactionable."
"inadequate and unactionable"
- Spirit Chairman Mac Gardner and CEO Ted Christie
Frontier's executives argue that their merger plan is superior to Spirit's existing strategy for emerging from bankruptcy. They believe that combining resources and streamlining operations could strengthen both airlines' positions in the competitive aviation market. Despite this confidence, Spirit remains focused on exiting Chapter 11 bankruptcy within this quarter.
Both airlines have struggled in the wake of the pandemic, grappling with increased costs and a market leaning towards more expensive travel options. In response, they have started offering bundled perks with tickets to enhance passenger appeal. Nonetheless, the path forward remains uncertain as Spirit weighs its recovery options and Frontier persists with its merger bid.