JetBlue and Spirit Airlines have officially terminated their proposed merger agreement due to regulatory roadblocks. The two airlines had initially announced the deal in July 2022, with JetBlue hoping to establish a low-fare competitor to the dominant Big Four U.S. airlines. However, the inability to meet closing conditions and obtain necessary legal and regulatory approvals led to the cancellation of the merger.
The termination of the merger agreement was mutually agreed upon by both JetBlue and Spirit. In a statement, JetBlue expressed its belief in the procompetitive benefits of the combination but acknowledged that meeting the required conditions by the deadline was unlikely. Spirit also cited regulatory roadblocks as the reason for terminating the merger.
Under the proposed deal, JetBlue would have acquired Spirit for $3.8 billion, aiming to create a fifth-biggest airline in the United States. The merger would have allowed JetBlue to compete with the Big Four airlines by incorporating Spirit’s existing planes into its fleet. The combined airline would have had 458 aircraft and an order book of over 300 Airbus planes, with a roughly 9 percent market share.
JetBlue CEO Joanna Geraghty expressed her disappointment over the termination of the merger agreement. She believed that the merger would have unleashed a national low-fare, high-value competitor, challenging the status quo. However, she acknowledged that moving forward independently was in the best interest of both airlines.
In order to dissolve the merger agreement, JetBlue will pay Spirit $69 million. This termination releases any claims between the two carriers and resolves all outstanding matters.
Meanwhile, JetBlue’s alliance with American Airlines also came to an end in May 2023. A federal judge ruled that the partnership, known as the Northeast Alliance, was anti-competitive and harmful to customers. The court argued that consolidating operations in Boston and New York City violated antitrust laws.
Following this decision, JetBlue focused its efforts on pursuing the merger with Spirit, which has now been terminated. However, American Airlines has appealed the ruling, seeking to reverse the dissolution of its partnership with JetBlue.
While the proposed mergers have faced regulatory obstacles, both JetBlue and Spirit remain confident in their future as independent airlines. They express their well wishes to each other and continue to pursue their respective goals in the aviation industry.
In conclusion, the termination of the merger agreement between JetBlue and Spirit Airlines highlights the challenges faced in the aviation industry when it comes to regulatory approvals. Despite the potential benefits of the merger, the inability to meet closing conditions and obtain necessary approvals led to its cancellation. Both airlines now look forward to moving forward independently, focusing on their individual growth and success.
