Frontier, Spirit Airlines revive merger talks, WSJ reports

(Reuters) – Frontier Airlines is exploring a renewed bid for Spirit Airlines (NYSE:), the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

The two budget carriers have had recent discussions about a possible merger though the talks are at an early stage and a deal may not come to fruition, the WSJ report said.

If a deal between Spirit and Frontier is reached, it would likely happen as part of Spirit restructuring its debt and other liabilities in bankruptcy, the report added.

Spirit and Frontier did not immediately respond to Reuters’ requests for comment.

Spirit Airlines came close to a merger deal with Frontier Group Holdings in 2022, the parent company of Frontier Airlines, which was terminated after JetBlue won the bidding war for Spirit.

The report comes as Spirit faces an uncertain future following the collapse of its $3.8 billion merger deal with JetBlue Airways (NASDAQ:) after the merger was blocked in March by the U.S. Department of Justice.

The Journal had reported earlier in the month that Spirit was in talks with bondholders over the terms of a potential bankruptcy filing in the wake of its failed merger with JetBlue.

Spirit has been losing money despite strong travel demand and has failed to report a profit in five out of the last six quarters, raising doubts about its ability to manage looming debt maturities.

The ultra low-cost carrier said last week it has reached an agreement with its credit card processor U.S. Bank National Association to extend a debt refinancing deadline by two months until Dec. 23.