Spirit Airlines said on Wednesday it has rejected a bid from rival Frontier Group as it was not favorable for the low-cost carrier and expects to exit bankruptcy in the first quarter. Frontier offered Spirit shareholders $400 million in debt and a 19% stake in Frontier earlier this month,

Spirit Airlines has rejected yet another takeover bid by discount carrier Frontier Airlines of Denver, saying its debtholders rejected the idea.

Frontier Airlines is attempting for a second time to merge with the now bankrupt Spirit Airlines, which declared bankruptcy late last year as budget airlines struggle.

Frontier Airlines said Wednesday it has again proposed combining with Spirit Airlines, which is in bankruptcy.

The parent of Frontier Airlines made a new offer to combine with bankrupt Spirit Airlines Inc., renewing its pursuit of the struggling budget carrier after talks fell apart last year.

Spirit, which filed for bankruptcy protection in November, called off a deal with Frontier in 2022 after receiving a higher bid from JetBlue that was ultimately thwarted by a federal judge.

Spirit Airlines has rejected a second offer by Frontier Group to merge, citing insufficient financial conditions.

After walking away from a deal twice last year, Frontier is now making an offer involving fresh debt and stock.

Frontier says a merger would be a better path out of bankruptcy for Spirit, as budget carriers struggle with high costs and competition.

Frontier Airlines is again pursuing a merger with Spirit Airlines, with Spirit mired in chapter 11 bankruptcy proceedings.