Jan 29 (Reuters) - Spirit Airlines ( SAVEQ ) said on

Wednesday it has rejected a bid from rival Frontier Group ( ULCC )

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 said in a

regulatory filing.

The proposal implied a total consideration of about $2.16

billion, Frontier said in a letter to Spirit that was made

public along with the filing.

Ultra-low-cost carriers, which excelled at keeping expenses

low and offering no-frills travel, have struggled since the

pandemic as travelers prefer to pay extra for a more comfortable

journey.

"As a combined airline, we would be positioned to offer more

options and deeper savings, as well as an enhanced travel

experience with more reliable service," Frontier CEO Barry

Biffle said in a statement.

Analysts have said a successful merger with Frontier could

establish a nationwide discount airline more capable of

attracting price-sensitive passengers.

But Spirit rejected the proposal as it would not provide the

anticipated shareholder value and raised concerns over the

timing and successful completion of the deal.

"We are told they (advisors to Spirit's bondholders) believe

your current proposal is so insufficient as not to merit a

counter," Spirit CEO Ted Christie and board chair Mac Gardner

said in a letter to Frontier that was made public on Wednesday.

In 2022, Spirit Airlines ( SAVEQ ) came close to a merger deal with

Frontier but the talks were halted in favor of JetBlue, which

won the bidding war for the airline.

Spirit and JetBlue had to scrap that deal last year, after a

U.S. judge blocked the merger on anti-competition concerns

The Florida-based airline declared bankruptcy in November

after grappling with prolonged periods of financial losses,

unsuccessful merger efforts and a substantial levels of debt.

The airline said it expects to complete its restructuring

process in the first quarter.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun

Koyyur)