JetBlue Airways and Spirit Airlines announced the termination of their proposed $3.8 billion merger, a development nearly two years in the making. The decision follows a federal court’s move to block the merger, siding with the government’s antitrust lawsuit that argued the deal would reduce competition and eliminate Spirit as a low-cost travel option.
The U.S. Justice Department maintained that the merger would significantly cut down competition in the airline industry. Spirit Airlines’ CEO, Ted Christie, expressed disappointment over the inability to proceed with the merger.
“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,” Christie said. “However, we remain confident in our future as a successful independent airline. We wish the JetBlue team well.”
Joanna Geraghty, CEO of JetBlue Airways, echoed a similar sentiment, emphasizing the decision to move forward independently after evaluating the remaining hurdles to closing the deal.
“Given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently,” Geraghty said.
Financial uncertainties loom for both airlines in the wake of this terminated agreement. JetBlue reported a loss for the year ending 2023 and anticipates continued declines in early 2024.
Spirit faces even greater challenges, with analysts speculating about potential bankruptcy — a narrative firmly rejected by CEO Ted Christie. With $1.1 billion in debt due in 2025, Spirit plans to explore refinancing options, reinforcing its stance on operating as a standalone entity throughout the merger discussions.
As part of dissolving the merger agreement, JetBlue will compensate Spirit $69 million. This comes after JetBlue’s previous payments to Spirit shareholders, totaling about $425 million in prepayments while the merger agreement was active.
