JetBlue will no longer acquire Spirit Airlines, the two U.S. carriers confirmed on Monday. The merger agreement announced in July 2022 was terminated by mutual agreement by the two companies.
According to a statement, although they still believed in the competitive advantages of combining their businesses, JetBlue and Spirit agreed that the uncertainty surrounding legal and regulatory approvals would not be met until July 24, 2024, when the contract would expire.
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” said Joanna Geraghty, chief executive officer, JetBlue.
“After discussing our options with our advisors and JetBlue, we concluded that current regulatory obstacles will not allow us to close this transaction in a timely manner under the merger agreement,” said Ted Christie, Spirit’s President and Chief Executive Officer.
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As part of the termination, JetBlue will pay Spirit $69 million and outstanding issues related to the transaction will be considered resolved.
Both JetBlue and Spirit said they believe that even alone they will be able to remain competitive and return to profit.
5h largest U.S. carrier
The merger between the two companies would create the 5th largest carrier in the United States, behind Delta, American, United and Southwest.
But the Department of Justice considered their union to be harmful to customers as it predicted that ticket prices would rise and routes would be removed.
In February 2022, Spirit had reached a preliminary agreement with Frontier Airlines, another US low-cost airline.
The agreement, however, ended up being canceled months later after an aggressive approach by JetBlue to Spirit’s shareholders.
