Reports indicate that Frontier Airlines is exploring the possibility of re-bidding for Spirit Airlines (SAVE, Financial). Sources familiar with the matter state that both low-cost carriers have engaged in discussions, which are still in the early stages and may not result in a finalized agreement. If successful, this acquisition could help Spirit restructure its bankruptcy debt and other liabilities.
On Monday, Spirit's stock surged over 53% after the airline managed to secure additional time to address its debt issues, which had heightened the threat of bankruptcy. The momentum continued into Tuesday's after-hours trading, with Spirit's stock rising more than 17%.
Frontier's initial attempt to acquire Spirit in 2022 fell through due to a competing bid from JetBlue Airways (JBLU). However, the deal between JetBlue and Spirit was blocked in January on antitrust grounds. Since then, Spirit has faced challenges, including grounding some aircraft due to engine component defects and experiencing restricted ticket prices amid an industry-wide capacity surplus during the key summer travel period.
