By George Glover

Embattled carrier Spirit Airlines rejected a second merger bid from rival Frontier Group on Wednesday -- but the renewed efforts to reach a deal could be a sign of what's to come for the aviation industry now that Donald Trump is back in the White House.

Frontier confirmed it had bid for Spirit in a statement early Wednesday. Shortly after, Spirit said in an 8-K form that it would be rejecting the offer.

Under the terms of the offer, Spirit shareholders would receive $400 million in Frontier debt and shares worth a 19% stake in Frontier. Spirit said the proposal would deliver less value for shareholders than its bankruptcy plan, adding that it expects to conclude the restructuring sometime this quarter.

Spirit shares fell 9.2% at Wednesday's market open, while Frontier stock was up 2.1%.

Shares in rival JetBlue Airways slid 1.5%, having cratered 26% Tuesday after the carrier's first-quarter unit revenue guidance came in softer than analysts had expected.

Frontier made its first offer for Spirit in 2022. It was outbid by JetBlue, but a federal judge blocked that merger in early 2024, arguing the deal would harm Spirit's price-sensitive customers.

Even though this latest bid has been rejected, it's a sign that Trump's second term could lead to an airline-industry shake-up. In November, Barron's wrote that a Trump presidency would make the Spirit-Frontier merger process easier, because his administration is expected to ease regulation.

The NYSE Arca Airline Index gauge of airline stocks has risen 9% since Trump won the presidential election on Nov. 5. The benchmark S&P 500 has climbed 6.2% over the same period.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 29, 2025 10:20 ET (15:20 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.