11:24 AM EST, 01/29/2025 (MT Newswires) -- Bankrupt budget carrier Spirit Airlines rejected a fresh merger offer from Frontier Group ( ULCC ) , saying the proposed deal terms were "woefully insufficient" from a financial perspective.

The Frontier Airlines parent and Spirit agreed to merge in 2022 but JetBlue ( JBLU ) swept in with a stronger proposal. JetBlue ( JBLU ) and Spirit terminated their agreement last March, citing in part concerns that they would not have been able to receive necessary legal and regulatory approvals on time.

Earlier this month, Frontier proposed offering Spirit's debtors and their stakeholders a $400 million principal amount of debt and 19% of Frontier's common equity, Spirit said in a Securities and Exchange Commission filing on Wednesday. The offer also required stakeholders to complete a previously announced $350 million equity rights offering.

In a letter to Frontier dated Tuesday and contained within the SEC filing, Spirit called the latest proposal terms "both inadequate and unactionable."

"Unfortunately, despite the clear guidance we and others have provided for three weeks as to the proposal's many deficiencies, you have addressed virtually none of them," Spirit wrote. The company called it "risky" and "woefully insufficient financially."

Spirit and Frontier restarted negotiations around a possible combination in the summer of 2024, though those talks were discontinued, according to the filing.

Spirit, which filed for Chapter 11 bankruptcy protection in November, said in the Wednesday filing that it expects to complete its restructuring process in the first quarter of 2025 as a deleveraged company that's positioned for long-term success.

In a separate statement, Frontier said its proposal would "provide meaningful value to Spirit financial stakeholders, in excess of Spirit's standalone restructuring plan." The low-cost carrier's shares climbed 5.4% in Wednesday trade.

"We stand ready to continue discussions with Spirit and its financial stakeholders and believe that we can promptly reach agreement on a transaction," said Bill Franke, chair of Frontier's board. Spirit's bankruptcy court filings indicate that the company's standalone plan will "likely result in an unprofitable airline with a high debt load and limited likelihood of success," Frontier said.

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