Frontier-Spirit combination could create ‘sufficient scale’ to compete with ‘Big Four’ US airlines

After months of playing coy, Frontier Group Holdings acknowledged on 29 January it has “significant interest” in creating the USA’s fifth-largest airline through the acquisition of ailing ultra-low-cost carrier (ULCC) Spirit Airlines. “We are prepared to commit all the resources necessary to acquire Spirit,” the Denver-based airline company reveals in a filing with the US Securities and Exchange Commission. It is not Frontier’s first dance with Spirit, which Frontier attempted to acquire in 2022 before JetBlue Airways stepped in with a more lucrative all-cash offer. That $3.8b proposal was blocked by a federal judge on anti-competitive grounds, with prosecutors at the US Department of Justice arguing it would eliminate a low-cost carrier from the market and harm budget-sensitive consumers. Frontier Group Holdings, parent of Frontier Airlines, maintains its acquisition proposal would deliver “greater value” to Spirit’s stakeholders than the current standalone business plan for Spirit’s post-bankruptcy revival. A letter to Spirit shareholders from Bill Franke, chairman of Frontier’s board of directors, and CE Barry Biffle asserts that Frontier’s proposal ”represents a compelling opportunity for your creditors and stockholders to receive a significant premium for their investment in Spirit, with greater value than the proposed transaction as described in the plan”. <br/>