Spirit Airlines And Jetblue Call Off Their Merger

(PatriotWise.com) — Spirit Airlines and JetBlue Airways announced on Monday that they were ending their agreement to merge the airlines after losing the federal antitrust lawsuit challenging the merger, CNBC reported.

Citing federal regulatory hurdles, the CEOs of Spirit and JetBlue ended the planned merger, which they argued was necessary to compete with the larger US airlines that control most of the market.

In January, US District Court Judge William Young blocked JetBlue’s attempt to merge with Spirit, agreeing with the Justice Department’s contention that the merger would drive up airfares and “harm cost-conscious travelers” by removing the discount carrier from the market.

While the airlines appealed Judge Young’s decision, JetBlue noted that, under the terms of the merger deal, an appeal of the decision was required.

In 2022, Spirit Airlines struck a merger deal with Frontier, another budget airline. However, weeks later, JetBlue presented an unsolicited bid to take over Spirit. The merger agreement was ultimately approved by Spirit Airlines shareholders in October 2022.

In a memo to JetBlue staff on Monday, CEO Joanna Geraghty described the merger as a “bold and courageous plan” that would have shaken up the status quo in the airline industry. She said the decision to compete with Frontier Airlines for Spirit was the right one and could have “supercharged our growth.”

Geraghty added that the federal court decision, along with the Justice Department’s “continued opposition,” made it unlikely that the merger would get a “green light to move forward.”

Geraghty replaced CEO Robin Hayes in February with the task of improving JetBlue’s operations, cutting costs, and reversing the airline’s losses.

JetBlue’s planned purchase of Spirit would have helped the struggling discount airline that has been dealing with the grounding of dozens of Airbus planes due to inspections prompted by a defect in the Pratt & Whitney engines.

With the merger called off, Spirit will be forced to deal with its financial difficulties on its own, something the airline said it would be able to do.