JetBlue Airways and Spirit Airlines have announced they will no longer pursue a merger that they hoped would challenge the ‘Big 4’ US Airlines of United, American, Delta and Southwest.
In seperate statements on March 4, 2024, JetBlue and Spirit confirmed that the two airlines had agreed to terminate their July 2022 merger agreement.
The two airlines cited “current regulatory obstacles” that would not allow them to finalize the transaction in a “timely fashion under the merger agreement”.
On January 16, 2024, a federal judge blocked JetBlue’s $3.8 billion takeover of the ultra-low-cost airline.
It was successfully argued by the US Department of Justice that customers who rely on Spirit’s cheaper fares “would likely be harmed” by the merger and lessen competition.
Both JetBlue and Spirit have always maintained that the deal would in fact reduce the price of tickets for passengers.
An appeal submitted by the airlines which was required under the merger agreement was expected to fail.
“We are disappointed we cannot move forward with a deal that would save hundreds of millions for consumers and create a real challenger to the dominant “Big 4″ U.S. airlines. However, we remain confident in our future as a successful independent airline. We wish the JetBlue team well,” Ted Christie, Spirit’s President and CEO, said.
Under the agreement, JetBlue will pay Spirit $69 million and the termination resolves all outstanding matters related to the transaction.
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” Joanna Geraghty, CEO of JetBlue, said. “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.”
JetBlue launched a takeover bid for Spirit in 2022.
