The conversation in Florida centered on Spirit’s efforts to rebuild and the broader state of the U.S. airline industry, according to a report by Bloomberg News.
Spirit Airlines (FLYY) has reportedly held high-level talks with Frontier Group (ULCC) amid the struggling airline’s ongoing efforts to move forward after emerging from bankruptcy.
According to a Bloomberg News report, citing a person familiar with the matter, Spirit Chairman Robert Milton spoke with Bill Franke, the Frontier chair, earlier this week near Spirit’s headquarters in Dania Beach, Florida. Milton reportedly initiated the meeting, and Dave Davis, Spirit’s CEO, also attended.
The conversation in Florida focused on Spirit’s efforts to rebuild and the broader state of the U.S. airline industry, with no discussion of an acquisition, the report stated.
Retail sentiment on Stocktwits about Spirit was in the ‘bullish’ territory, while traders were ‘neutral’ about Frontier.
The companies have held merger talks as late as early this year. However, Spirit had rejected the $2.2 billion deal from Frontier, after labeling it as “inadequate.” The offer came after Spirit declared bankruptcy in November to restructure about $1.6 billion in debt.
The meeting took place less than a week after Spirit secured a lifeline by borrowing the entire $275 million available through a revolving credit facility, and got relief from a liquidity crisis that raised doubts over its ability to accept credit card payments.
This year, airline demand unexpectedly shrank in the first half amid a dip in consumer sentiment due to uncertain trade policies.
Spirit had raised going concern doubts earlier this month as it scrambled to raise cash. The company said it may sell aircraft, real estate, and excess airport gates. It was also looking at renegotiating aircraft leasing agreements.
Last week, The Wall Street Journal reported that Spirit was exploring strategic alternatives to navigate the crisis.
Ratings agency Moody’s noted that Spirit will burn over $500 million of cash in 2025 due to “weak domestic leisure demand, elevated domestic capacity, and a challenging pricing environment.” The firm also downgraded the airline’s credit rating further into junk territory.
Low-cost carriers, such as Spirit and Frontier, have struggled to boost earnings following the pandemic, due to a rise in costs and a shift in passenger preference toward larger players, including United and Delta.
One Stocktwits user wrote that the worst is priced in Spirit shares.
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