by Donald Wood
Last updated: 9:00 AM ET, Mon March 4, 2024
JetBlue Airways and Spirit Airlines announced the companies
have agreed to terminate their July
2022 merger agreement.
Officials from JetBlue and Spirit mutually agreed that
terminating is the best path forward for both companies as required closing
conditions, including receiving necessary legal and regulatory approvals, were
unlikely to be met by July 24, 2024.
“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. “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.”
JetBlue will pay Spirit $69 million as part of the
agreement, and the termination resolves all outstanding matters related to the
transaction, under which any claims between them will be mutually released.
Both airlines have already shifted gears as part of an
effort to return to sustained
profitability, with JetBlue and Spirit representatives refocusing on core
strengths, delivering meaningful cost savings and deepening network relevance.
“After discussing our options with our advisors and JetBlue,
we concluded that current regulatory obstacles will not permit us to close this
transaction in a timely fashion under the merger agreement," said Ted
Christie, Spirit's President and Chief Executive Officer.
“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 continued. “However, we remain
confident in our future as a successful independent airline. We wish the
JetBlue team well.”
In January, a federal judge handed down a decision barring
JetBlue and Spirit from merging to form a single airline in their current
state, citing antitrust concerns. The judge found that eliminating Spirit would
harm consumers by removing an ultra-low-cost competitor that had driven other
carriers to lower their fares.
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