Frontier, Spirit Airlines revive merger talks, WSJ reports
Updates Oct. 22 story to add stock movement in paragraph 2
Oct 22 (Reuters) -Frontier Airlines is exploring a renewed bid for Spirit Airlines SAVE.N, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
Shares of Spirit rose nearly 18%in premarket trade while Frontier was marginally lower.
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 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 Spirit and Frontier reach a deal, it would likely happen as part of Spirit restructuring its debt and other liabilities in bankruptcy, the report added.
Spirit declined to comment on the report, while Frontier did not immediately respond to a Reuters request for comment.
In 2022, SpiritAirlines came close to a merger deal with Frontier Group Holdings ULCC.O, the parent company of Frontier Airlines. It wasterminated after JetBlue Airways JBLU.O won the bidding war for Spirit.
However, that $3.8 billion deal was blocked by the U.S. Department of Justice in March.
The Journal 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.
The ultra-low-cost carrier said last week it had 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.
The airline has also warnedof a bigger third-quarter loss due to a tough race for price-sensitive leisure travelers and an oversupply of airline seats in the domestic market.
Reporting by Rishabh Jaiswal in Bengaluru; Additional reporting by Surbhi Misra; Editing by Savio D'Souza and Devika Syamnath
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