After playing COY for a few months, Frontier Group Holdings will be “great interest” on January 29 to create the fifth largest airline in the United States through the acquisition of ultra -low -cost carriers (ULCC) Spirit Airlines. I admitted that I had.
“We are ready to commit all the resources necessary to get the spirit,” said Denver -based airlines, who submitted to the US Securities and Exchange Commission.
It's not the first dance with the spirit of the frontier. Frontier tried to acquire in 2022 before Jet Blue Airways intervened with a more advantageous all -cash oofer. The $ 3.8 billion proposal is blocked by the Federal Judge on anti -competitive basis, and the US Ministry of Justice prosecutors claim that it eliminates low -cost carriers from the market and harms consumers who are sensitive to budgets. I am doing it.
Frontier Airlines, Frontier Group Holdings, claims that the acquisition proposal will provide a “greater value” to Spirit's stakeholders rather than the current standalon business plan for the resurrection of the spirit after bankruptcy. Masu.
A letter from Bill Franke, the chairman of the Frontier Board of Directors, and the highest executive Officer Barry Biffle, the frontier's proposal, “It's important for your creditors and shareholders to invest in the spirit. The proposed transactions are stated in the planning of an attractive opportunity to receive important premiums.
In the minutes of Chapter 11, the spirit has promoted the latest progress of the frontier, but has left the door open to the potential combination of ULCC in the United States.
“The company has decided, except for new developments, so that the planned appearance from Chapter 11 is not delayed,” says Spirit.
Under the proposal, Spirit's stakeholders provided $ 400 million debt and 19 % of Frontier.
Potential “synergistic effect”
Both carriers fly a large airbus narrow body jet, so it makes a reasonable partnership from the viewpoint of operation, staffing, and maintenance. Frontier operates about 150 A320 family aircraft, but the spirit has 165 powerful fleets.
Frontier has submitted a proposal to get a spirit on January 7. This is a representative of a company after the Convena as a “more powerful, more competitive airline” and a “US low -cost carrier” with enough size to compete with American Airlines Big Four. I am claiming. Delta Airlines, Southwest Airlines, United Airlines.
According to Frontier, ULCC after the binding will overtake Alaska Airlines (recently acquired Hawaiian Airlines) as the fifth largest airline in the United States, but the fifth largest fleet compared to large fleets operated by Big For. It will be far away.
Both careers accept changes. For air travelers who try to pay more than most fees and pay more than naked bones under pressure from large network carriers dialed with their own, frontier, spirit low -cost products. The product band ring was introduced.
The spirit has been dragging since Jetblue's transaction was refused. In recent months, hundreds of pilots have relyed on selling A320 aircraft, greatly reducing passenger abilities throughout the network. Some analyst suggest that the final liquidation of the spirit fleet is on the table.
However, the spirit claims that the recovery plan after bankruptcy is more reasonable than the latest proposal of the frontier. ULCC, based in Miramar, Florida, states that the potential acquisition by the Frontier states that “the value of our stakeholders will decrease more than what was assumed in the company's existing plans.”
“The company is continuing the reorganization process. This will significantly leverage the company and position it for long -term success,” says the airline.
Frontier claims that the spirit of the spirit is suffering from several “tasks”, such as “assumption of a robust evaluation of business plan with important execution risks.” Frontier has argued that the proposed combination will increase the value of creditors and investors after the spirit shares are effectively wiped out by the bankruptcy application.
The “upward possibility” of “larger and more competitive airlines” is important, and the “estimated synergistic effect” is expected to exceed $ 600 million. Frontier also says that US consumers also benefit from “hundreds of millions of savings” compared to the airline charged by major US airlines.
Spirit will ask for a restructuring plan in the total hearing on February 13. It will appear from the 11th process in the second half of the first quarter, and at that time it may be involved in negotiations with Frontier again.
Frontier reports on the fourth quarter and year's financial results on February 7, but the spirit has not been calling for revenue since entering the bankruptcy process.