Spirit Airlines, whose shareholders approved the merger with JetBlue in October 2022, expects the Department of Justice (DOJ) to decide whether to allow the airline to proceed with the merger in the next 30 days.
“We anticipate hearing from the DOJ in the next 30 days or so and that’s really all we have to say on that topic for now,” said Ted Christie, the Chief Executive Officer (CEO) of Spirit Airlines, during the company’s Q4 2022 earnings call on February 7, 2023.
According to an earnings presentation from the same period, the two sides aim to complete the merger “no later than the first half of 2024”.
JetBlue swooped in to buy Spirit Airlines with an all-cash offer in April 2022 after Frontier Airlines, another United States (US)-based low-cost carrier, offered a 2.9% billion cash-and-stock deal in February 2022. Initially, JetBlue offered $3.6 billion, sweetening the deal over the course of the following few months with enhanced reverse break-up fees and accelerated prepayment for Spirit’s shareholders.
Eventually, the board of directors at both JetBlue and Spirit settled for a $3.8 billion all-cash deal in July 2022, with a $2.5 per share prepayment to Spirit Airlines’ shareholders, as well as a ticking fee payment of $0.10 per share per month between January 2023 and the finalization of the merger. The stockholders of the yellow-branded carrier approved the merger with JetBlue in October 2022.
Concerns about DOJ approval will remain, as JetBlue is already in the crosshairs of the department because of its Northeast Alliance with American Airlines.
The DOJ issued a statement in September 2021 noting that it had filed a lawsuit to block the alliance’s agreements to consolidate operations in New York and Boston. “The Northeast Alliance would eliminate significant competition in this important industry,” said Richard Powers, the now-former Acting Assistant Attorney General at the DOJ’s Antitrust Division. “This sweeping partnership is unprecedented among domestic airlines and amounts to a de facto merger between American and JetBlue in Boston and New York City,” Powers added.
The alliance between JetBlue and American Airlines is yet to be approved, The DOJ and the two airlines went to count in November 2022 and the case is still ongoing.