After months of speculation, delayed shareholder votes, and hostile bids, Frontier Group Holdings (NASDAQ: ULCC), the parent company of Frontier Airlines, was the loser in the Spirit Airlines (NYSE: SAVE) sweepstakes.  JetBlue Airways (NASDAQ: JBLU) wound up the victor thanks to its winning bid of $33.50 per share, or $7.6 billion.  Is Frontier truly the loser though?  Maybe not, and missing on Spirit may turn out to be a blessing in disguise.

It’s no secret that CEOs tend to overpay for acquisition targets, as egos and aspirations of empire building can supersede rationality.  With Spirit terminating the merger agreement, Frontier will receive $25 million upfront and an additional $69 million when the JetBlue deal is completed.  The addition of $94 million in liquid assets to the balance sheet will help Frontier navigate an environment of rising fuel and labor costs.

Frontier also forced a competitor to spend an additional $1 billion on the Spirit acquisition, which may weaken JetBlue as it digests the acquisition.  When the dust settled and Frontier was left at the altar, the stock actually popped nicely, demonstrating that investors may think a shotgun marriage was a bad idea to begin with.

Airlines may not be good at much, they certainly struggle with arriving on time, transporting luggage, and budgeting for future costs, but one thing they excel at is merging with one another.  It is quite conceivable that Frontier will feel the sting of rejection, and go on the hunt for a rebound romance.  One potential target could be Allegiant Travel (NASDAQ: ALGT) which operates Allegiant Airlines, another discount carrier.

Recently Allegiant reported disappointing earnings and weak guidance, which has the company in a weakened position.  The company is seeing robust ticket demand, which is a positive, but has struggled to get a handle on costs, including fuel.  It would not be surprising to see a scenario where Frontier uses its cash windfall to make a run at Allegiant.  In theory, Spirit could be helping fund a Frontier acquisition of Allegiant.

A potential merger is arguably the last thing Frontier should be pursuing however.  Frontier’s fleet of aircraft is among the industry’s most fuel efficient, and Allegiant’s fleet may be a poor fit.  With an economic slowdown on the horizon, paying down debt and pursuing organizational efficiencies seem to be much better uses of the balance sheet cash than chasing another dance partner.

Two of Frontier’s main competitors, Spirit and JetBlue are starting down the barrel of a multi-year integration effort combine the aircraft fleet, optimize the routes and airport gates, and work through staffing levels.  Letting the new combined company’s management deal with this myriad of issues may be the best thing for Frontier, if it can remain focused on operating efficiently and serving customers.  Admittedly, that’s traditionally a high bar for any airline, but Frontier has an opportunity should it choose to accept it.

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