Bankrupt Spirit Air again rebuffs new takeover offer from Frontier Airlines

Bankrupt Spirit Airlines Inc. rejected a new acquisition offer from the parent of Frontier Airlines but said it remains open to a long-discussed combination of the budget carriers.

Frontier Group Holdings Inc. met with Spirit’s leaders in recent days to discuss a proposal that it values at about $2.2 billion, supported by the issuance of new Frontier debt and stock, according to a statement Wednesday. It’s seeking to convince Spirit bondholders that the plan is preferable to bankruptcy restructuring, which Frontier said would result in “an unprofitable airline with a high debt load.”

Spirit rebuffed the offer, calling the terms “inadequate and unactionable.” The company said in a regulatory filing that it would continue to pursue a restructuring plan through bankruptcy but also “would be happy to consider” a revised bid that addresses deficiencies.

The previously undisclosed talks, which began with a letter from Frontier on Jan. 7, revive a yearslong courtship between the two pioneers of deep-discount air travel. Frontier agreed to buy Spirit in 2022 before JetBlue Airways Corp. came in with a bigger offer. After the JetBlue deal was blocked on antitrust grounds, Frontier again pursued Spirit but talks broke down last year, Bloomberg has reported.

The carriers have argued that joining forces could fortify their operations in the face of serious challenges in the ultra-low-cost segment of the market, which has been pummeled since the pandemic as competition from larger rivals has increased. Both Frontier and Spirit have been adapting their business models to add premium offerings as consumers increasingly seek out higher-end options.

Tesla profit misses Wall Street’s estimates

Tesla fell short of Wall Street’s earnings estimates in the fourth quarter, underscoring the challenges the automaker faces as demand for electric vehicles fades.

The company on Wednesday reported adjusted earnings of 73 cents a share for the quarter, missing analysts’ average estimates of 75 cents per share.

Tesla said its plans for more affordable vehicles remain on track for production to start in the first half of this year. The Cybercab also is on track for 2026.

The company cautioned its production approach, which will use a mix of its current methods and a next-generation platform, will lead to less cost reduction than previously expected. However, this will allow Tesla to expand vehicle volumes more efficiently during “uncertain times.”

Starbucks sees better-than-expected sales

Starbucks on Tuesday reported better-than-expected sales in its fiscal first quarter as some of its turnaround efforts start to deliver results.

The Seattle coffee giant, helmed by Newport Beach resident Brian Niccol, said its revenue was flat at $9.4 billion for the 13-week period ending Dec. 29. That beat Wall Street’s forecast of $9.3 billion, according to analysts polled by FactSet.

In a conference call with investors Tuesday, Niccol said Starbucks is planning to cut its food and beverage offerings by 30% over the course of this year to simplify operations and speed service. Starbucks will also add digital menus to all of its company-owned U.S. stores over the next 18 months to make ordering options clearer and make it easier to shift its offerings depending on the time of day.

Other customer-focused changes include a decision to stop charging extra for nondairy milk and improving service inside stores and at drive-thrus.

Compiled from Bloomberg and Associated Press reports.