Will a third try still have the charm?
Spirit Airlines is discussing a possible merger with rival ultra-low-cost carrier Frontier, Bloomberg first reported on Tuesday.
The discussions would be the third time in as many years that the two airlines have discussed a merger. The first project failed after Spirit accepted another proposal from JetBlue, which was ultimately blocked by a federal judge on antitrust grounds.
Frontier again approached Spirit about a merger and made a $2.2 billion takeover offer shortly after Spirit declared bankruptcy in January. Spirit rejected Frontier’s proposal, calling it “inadequate and unactionable.”
However, the current offer comes as airlines face very different circumstances. Spirit filed for Chapter 11 bankruptcy protection for the second time in two years. The airline’s cash reserves have been closely watched by industry observers, but it won some breathing room on Monday, securing $50 million in funding under an amended debtor-in-possession agreement.
Known for its bright yellow planes, surcharges and no-frills service, the airline is often the butt of late-night TV jokes, but in the past year it has also adopted benefits measures that bring it closer to its main rivals. The airline has aggressively cut costs this year, cutting jobs and downsizing its network to become a smaller, leaner carrier, but has struggled to stem losses. The airline suffered operating losses of $3.1 million per day in October, according to a filing with the U.S. Securities and Exchange Commission.
Reward your inbox with the TPG daily newsletter
Join over 700,000 readers and get breaking news, in-depth guides and exclusive offers from TPG experts
Spirit sees a merger as a possible solution to its precarious financial situation and has reportedly been exploring options “with a number of interested counterparties.”
Frontier itself struggled in a difficult year for low-cost carriers that lacked the premium revenue from wealthy travelers that has significantly boosted the profits of its major airline rivals. In addition, the introduction of basic economy class by legacy airlines has made it more difficult for budget airlines to compete. Against this backdrop, Frontier’s shares have fallen more than 28% since the start of 2025, and the company lost $190 million in the first nine months of the year.
Frontier announced Monday that longtime CEO Barry Biffle will resign effective immediately, without giving a reason for the sudden change. Frontier President James Dempsey, an industry veteran formerly of European low-cost carrier Ryanair, will take over as the airline’s CEO on an interim basis.
It’s unclear how the merger will work or what it will mean for the airline’s independent brands, so stay tuned for the latest news from TPG.
