Jetblue has announced that it will purchase carrier Spirit for US$3.8 billion, creating America’s fifth-largest airline.
This announcement comes after Florida-based Spirit terminated a US$2.9 billion deal to merge with fellow US low-cost carrier Frontier.
Spirit and Frontier had been in talks since February, but Jetblue made a surprise bid for Spirit in April and has today come out on top.
Jetblue aims to create a “national low-fare challenger” to the US airline industry’s dominant ‘Big Four’: American, United, Delta and Southwest Airlines.
The combined airline would have a fleet of 458 aircraft and an order book of over 300 Airbus aircraft, including new A220s and A320 neos. It plans to operate over 1,700 daily flights to more than 125 destinations in 30 countries.
The two airlines will continue to operate independently until the closing of the deal, which is expected to conclude “no later than the first half of 2024” subject to regulatory approval.
Once complete, the combined airline would be based in New York and headed by Robin Hayes (the current CEO of Jetblue).
Jetblue said that the proposed transaction would be expected to deliver $600-$700 million in net annual synergies following the completion of integration.
Robin Hayes commented on the news:
“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling Jetblue to bring our unique blend of low fares and exceptional service to more customers, on more routes.
“We believe we can uniquely be a solution to the lack of competition in the US airline industry and the continued dominance of the Big Four… By enabling Jetblue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone. Even combined with Spirit, Jetblue will still be significantly smaller than the Big Four, but we’ll be much better positioned to bring the proven Jetblue effect to many more routes and locations.”
Ted Christie, president and CEO of Spirit, added:
“We are thrilled to unite with Jetblue through our improved agreement to create the most compelling national low-fare challenger to the dominant US carriers, and we look forward to working with Jetblue to complete the transaction.
“Bringing our two airlines together will be a game changer, and we are confident that JetBlue will deliver opportunities for our guests and team members with Jetblue’s unique blend of low fares and award-winning service. We especially appreciate the commitment of our Spirit family throughout this process. Today’s exciting announcement reflects Jetblue’s admiration for Spirit and a shared belief in what the combined airline can bring for our guests.”