Advertisement|Remove ads.
Shares of Spirit Airlines Inc ($SAVE) skyrocketed by as much as 36% before markets opened on Wednesday after reports indicated Frontier Airlines ($ULCC) has rekindled its interest in a merger with the carrier.
Frontier’s stock also jumped by nearly 7% in pre-market trading on Wednesday.
According to the Wall Street Journal, the two airlines have recently engaged in early-stage discussions about a potential merger. If an agreement is reached, it would likely coincide with Spirit's efforts to restructure its debt and liabilities during bankruptcy proceedings.
Frontier and Spirit have had a long history of on-and-off merger discussions since 2016. They came closest to a deal in 2022 when Frontier agreed to acquire Spirit in a $2.9 billion transaction. However, JetBlue Airways Corporation ($JBLU) intervened with a competing offer that ultimately swayed Spirit investors.
Despite the massive uptick in Spirit’s share price, retail sentiment on Stocktwits has dipped to ‘bullish’ (73/100) from ‘extremely bullish’ a day ago.
Meanwhile, retail sentiment around Frontier has improved to ‘neutral’ (46/100) from ‘bearish’ a day ago.
Spirit has faced significant financial challenges after a failed merger with JetBlue and years of operating losses.
However, the airline received some relief last week after it secured a deal with its credit card processor to extend the deadline for refinancing its debt. Spirit must refinance $1.1 billion in bonds by late December to avoid jeopardizing its credit card processing capabilities in the upcoming year.
In its attempt to revamp the business, Spirit is shifting toward a more premium approach, enhancing its basic offerings with upgraded ticket packages. The company’s executives believe this new direction will attract high-spending travelers, fend off increasing competition, and boost revenue.
Spirit’s stock is currently trading at all-time lows, having lost 84% of its value so far in 2024.
For updates and corrections email newsroom@stocktwits.com.
Read more: Archer, Joby Stocks Surge As FAA Finalizes Air Taxi Rules: Retail Sentiment Reaches New Highs