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After a failed attempt at merging with JetBlue (JBLU+0.39%), ultra-low-cost carrier Spirit Airlines (SAVE) is reportedly turning back to a familiar frenemy.
The Wall Street Journal (NWSA-0.25%), citing people familiar with the matter, reports that Spirit and Frontier Airlines (ULCC+3.87%) are in early talks over a potential merger. The news sent Spirit’s stock soaring 37% at market open on Wednesday.
A deal would likely be part of debt restructuring plans as Spirit is weighing a possible bankruptcy, according to the Journal.
This isn’t the first time that Frontier and Spirit are playing footsie. The pair have been in on-and-off merger talks since 2016. In February 2022, the companies announced a $2.9 billion definitive merger agreement. That deal fell apart in July of that year.
Spirit abandoned that deal for another offer from another low-cost rival: JetBlue. But after a federal judge blocked the merger over concerns that the combination of the two budget airlines would be anti-competitive, Spirit and JetBlue called off their $3.8 billion deal this past March.
Since then, Spirit has struggled to find its footing (and JetBlue isn’t faring much better). Earlier this month, Spirit stock tanked following reports that it may soon file for bankruptcy. Speculation has swirled for months that Spirit might be approaching insolvency.
In a regulatory filing Friday, however, the company said it pushed back its deadline to refinance roughly $1.1 billion in debt until Dec. 23. Spirit also said that it had borrowed the entirety of a $300 million revolving credit facility it had set up in March 2020. Borrowings under that facility are scheduled to mature at the end of September 2026. The company also reiterated that it expects to end 2024 with more than $1 billion in liquidity.
— Melvin Backman contributed to this article.