Frontier Airlines announced on Wednesday (29) a new proposal to merge with Spirit Airlines, which currently faces financial difficulties and is in the process of bankruptcy. The attempted merger between the two low -cost airlines occurs after a previous proposal was barred by an offer by Jetblue Airways, which was later blocked by a federal judge.
Since the initial proposal, Frontier has met with Spirit’s board and executives to discuss the merger. In a statement, Frontier executives stated that their plan is more advantageous than Spirit’s current strategy to get out of bankruptcy. Bill Franke, president of Frontier, and Barry Biffle, CEO, expressed in an email that they believe that Spirit, under its current plan, would emerge highly indebted and with operational losses.
However, Spirit rejected Frontier’s proposal, classifying the terms as “inadequate and unenforceable,” according to a letter released in a regulatory document. Spirit hopes to leave Chapter 11 (US Bankruptcy Law mechanism that allows financial difficulties to restructure their debts) in this quarter, having reduced costs, including the resignation of about 200 employees and the sale of some aircraft aircraft.
Low-cost aerials, such as Frontier and Spirit, have been postpandy, with increasing operating costs and consumers’ preference for international travel in companies that offer more comfort. Both companies have tried to reformulate their business models, eliminating cancellation and moving rates for some tickets and opening sections premium in their aircraft.
