Spirit Airlines Rejects Latest Frontier Merger Bid - Advances Solo Restructuring, and More

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Spirit Airlines Charts Independent Course After Dismissing Third Frontier Takeover Attempt

Spirit Airlines has firmly rejected Frontier's latest acquisition proposal worth $2.16 billion, which offered $400 million in second-lien debt and a 19% equity stake.

The rejection comes as Spirit moves forward with its standalone restructuring plan, with a crucial reorganization hearing scheduled for tomorrow, February 13, 2025.

Spirit's management believes Frontier's proposal would deliver less value to stakeholders and create more uncertainty compared to their current reorganization strategy.

Key Points

• Frontier Airlines submitted the proposal on February 4, dropping the requirement for Spirit's $350 million equity rights offering and requesting a waiver of the $35 million termination fee

• Spirit countered on February 7 with a proposal for $600 million in debt and $1.185 billion in equity, which Frontier rejected on February 10

• Nearly 99.99% of Spirit's voting creditors have approved the current restructuring plan, with only two objections remaining unresolved

• Spirit expects to complete its restructuring process by the end of Q1 2025

• This marks the third failed merger attempt involving Spirit Airlines since 2022, following JetBlue's intervention and subsequent regulatory blockage

What It Means

I believe this rejection marks a definitive end to years of merger attempts between these two ultra-low-cost carriers.

The focus now shifts to Spirit's standalone recovery strategy, which could offer a clearer path to financial stability.

While consolidation could have created a stronger competitor, I expect Spirit's debt reduction through restructuring will position it better in the budget airline market (regarding the current scenarios).

Other Key Aviation and Aerospace Industry Updates for Today 👇

2. Boeing Starts 2025 Strong With 45 Aircraft Deliveries in Jan

Boeing delivered 45 aircraft in January 2025, marking its best monthly performance since 2023.

The deliveries included 40 737 MAX planes, four 787 Dreamliners, and one 777 freighter. This represents a significant increase from 30 deliveries in December and 25 in January 2024.

United Airlines, Southwest Airlines, and several Chinese carriers were among the recipients.

The company also secured 36 new orders, with no cancellations reported.

3. FAA Taps AURA for Drone Air Traffic Integration Tests

AURA Network Systems received an FAA contract to test and validate technologies for integrating uncrewed aircraft into national airspace.

Working with North Dakota's UAS Test Site, AURA will demonstrate voice relay capabilities that allow remote pilots to communicate with air traffic control as if onboard.

The project focuses on measuring voice quality, latency, and intelligibility to meet RTCA standards, aiming to enable safe beyond-visual-line-of-sight operations.

4. Global Airlines Project 36 Billion Dollar Profit for 2025

Airlines are seeing stronger profits in 2025 as limited capacity and robust demand allow them to maintain higher ticket prices.

U.S. domestic airfares are up 12% from last year, with the average fare at $304. Global airlines expect $36.6 billion in profits for 2025, with a 3.6% net margin.

North American carriers anticipate a 15% increase in per-passenger profits, while European airlines project a 12% rise.

Despite rising labor costs, lower fuel prices are helping offset expenses.

5. Rheinmetall Wins Netherlands Embraer C-390 Flight Simulator Contract

Rheinmetall secured a contract from Embraer to deliver C-390 flight simulators to the Royal Netherlands Air Force by late 2026.

The package includes a Level D Full Flight and Mission Simulator capable of replicating 350 malfunctions, plus a Cargo Handling Station Trainer for loadmaster training.

This marks Rheinmetall's third major C-390 simulator order globally.

Embraer and Rheinmetall are also considering establishing a dedicated training center in Europe.

6. Airlines Push Back Against Passenger Compensation Rules

Major U.S. airlines asked the Transportation Department to end a Biden-era rule of mandatory passenger compensation for flight disruptions.

The proposed rules would require airlines to pay $200-$775 for carrier-caused delays.

Airlines for America, representing major carriers, argues the DOT lacks authority and that such requirements would increase ticket prices.

The International Air Transport Association (IATA) claimed similar programs have cost airlines billions without reducing disruptions.

7. AutoFlight Lands Major Wuhan eVTOL Aircraft Deal

AutoFlight secured a $21 million (157 million yuan) contract from Wuhan Hanyang Investment Development Group for 12 eVTOL aircraft.

The order includes cargo, firefighting, and five-seat passenger aircraft.

The project aims to develop unmanned applications for logistics, emergency response, and tourism along the Yangtze River's north bank.

8. FAA Clears Largest Ever Autonomous Commercial Farm Drone

Pyka's Pelican 2, the world's largest autonomous agricultural drone, received FAA commercial approval.

The $550,000 electric aircraft features a 300-liter payload capacity, covering 90 hectares per hour.

It includes advanced LIDAR and RADAR systems for day-night operations, five hot-swappable batteries, and an 18-meter spray width.

Pyka secured a 20-aircraft order from Brazil and will showcase the drone at the World Ag Expo in California.

9. Hong Kong Airlines Removes Team After 128 Flight Cancellations

Greater Bay Airlines has fired its management team after they canceled 128 flights affecting 5,500 passengers. The affected flights are from February to March 2025.

The cancellations impacted routes to Thailand, South Korea, Japan, and Taiwan.

The team, hired in late 2024, failed to follow cancellation protocols, made delayed decisions, and poorly communicated changes.

The airline has now implemented stringent weekly reviews and requires high-level approval for future cancellations.

10. Trump Backs Major Sustainable Aviation Fuel (SAF) Project

The Trump administration approved a loan for Calumet's Montana Renewables refinery to expand its sustainable aviation fuel production from 140 to 315 million gallons annually.

The $1.44 billion loan, initially finalized under Biden on January 10, will help the Great Falls facility produce about half of North America's sustainable aviation fuel.

The project will use fats from seed oils and tallow to produce lower-emission jet fuel.