JetBlue has announced that it has terminated its merger agreement with Spirit Airlines, after a US judge blocked the deal on anti-competition concerns in January.
JetBlue announced plans to purchase Florida-based carrier Spirit for US$3.8 billion in July 2022, aiming to create America’s fifth-largest airline and a “national low-fare challenger” to the dominant ‘Big Four’ in the US – American, United, Delta and Southwest Airlines.
Spirit’s stockholders then approved the merger agreement in October 2022, having previously terminated a US$2.9 billion deal to merge with fellow US low-cost carrier Frontier.
The low-cost carriers said that “terminating is the best path forward”, as the required closing conditions which included receiving necessary legal and regulatory approvals were “unlikely to be met by the merger agreement’s outside date of July 24, 2024.” Under the agreement, JetBlue will pay Spirit US$69 million.
Joanna Geraghty, CEO of JetBlue, commented:
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines.
“We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently. We wish the very best going forward to the entire Spirit team.”
Geraghty added:
“JetBlue has a strong organic plan and unique competitive advantages, including a beloved brand, a unique value proposition, and high-value geographies.”
“We have already begun to advance our plan to restore profitability. We look forward to sharing more on our progress in the coming months.”
We spoke to the former CEO in 2022 regarding the plans to merge with Spirit Airlines:
