JetBlue Makes Major Announcement About Controversial Merger With Spirit Airlines

JetBlue announced on Monday morning that its potential acquisition of Spirit Airlines is no more. It puts an end to the $3.8 billion potential merger, which was blocked by a federal judge less than two months ago.

According to The Points Guy, though the two airlines initially intended to appeal the ruling, they decided to dissolve the merger because it seemed unlikely that they would be able to close the deal by the July 24, 2024 deadline due to the regulatory challenges.

“Even if the ruling was overturned on appeal, we simply don’t see a path to regulatory approval by the required July 24 deadline,” JetBlue’s newly minted CEO, Joanna Geraghty, said in a statement to employees. “Additionally, the lingering uncertainty is distracting and taking our resources away from more pressing priorities—particularly our work to return to profitability and reinvigorate our brand and culture.”

JetBlue and Spirit have reached an agreement to end the merger, which sees JetBlue paying the smaller airline $69 million in breakup fees in addition to the $425 million JetBlue already paid Spirit shareholders as part of the initial acquisition contract.

The acquisition was initially meant to bolster JetBlue’s performance, which has dipped precipitously in the wake of the pandemic. It was also intended to preserve Spirit’s affordability; the airline is struggling to compete with its low-cost business model. Under the deal, JetBlue was to assume Spirit’s aircrafts and crew members to accelerate its own growth and hopefully return to profitability.

However, while JetBlue seems to have a semblance of a plan moving forward, the same can’t definitively be said for Spirit. The possibility exists that if Spirit continues to lose money, JetBlue might be able to acquire the airline for a bargain rate (or less than they would have paid now) somewhere down the line.

But during their fourth-quarter earnings call last month, in which it declared a loss of $184 million for the quarter, Spirit’s CEO bucked back at the “misguided narrative” that “has been advanced by an assortment of pundits.”

“Throughout the transaction process, given the regulatory uncertainty, we have always considered the possibility of continuing to operate as a standalone business and have been evaluating and implementing several initiatives that will enable us to bolster profitability and elevate the guest experience,” Ted Christie said. “We remain confident in our future as a successful independent airline.”