A merger of America's two largest budget airlines appears increasingly unlikely. Spirit Airlines on Thursday rejected Frontier Airlines' latest proposal for a merger, which would have helped bring the Florida-based carrier out of bankruptcy to join forces with its top competitor.

Spirit Airlines is rebuffing the latest takeover offer from Frontier Group, with the discount airline saying that it prefers focusing on its current reorganization plan.

While the strong brand and loyal customer base make a full closure unlikely, the pool of investors who will be able to pull the struggling airline back on track is limited — and, now that Spirit has rejected a merger offer from Frontier ( FRON) for a second time, got even smaller.