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JetBlue and Spirit Airlines Call Off $3.8 Billion Merger
March 4, 2024
JetBlue and Spirit Airlines have called off a planned merger that began two years ago. The airlines said the decision was amicable but claimed that ongoing regulatory hurdles would have made merging the two companies difficult. JetBlue will pay Spirit a $69 million termination fee.
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” Joanna Geraghty, chief executive of JetBlue, said in a press release. “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. We wish the very best going forward to the entire Spirit team.”
The deal would have created the fifth-largest carrier in the United States, according to The Washington Post. But there’s been trouble brewing for the merger since January 2024, when a Boston judge ruled it would harm consumers by reducing competition. The airlines appealed the ruling, and a hearing was originally set for June 2024, and the deal-closing deadline for the merger agreement was July 24.
Spirit’s CEO Ted Christie agreed that regulatory obstacles served as the primary reason for calling off the merger. In a statement, he said, “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. However, we remain confident in our future as a successful independent airline.”
JetBlue will hold an Investor Day on Thursday, May 30, to provide additional detail on its long-term strategy and ongoing revenue and cost initiatives. Further information regarding Investor Day will be shared with analysts and investors in the coming weeks.
From December 2022 to November 2023, American, United, Delta, and Southwest account for 80% of the domestic market share, according to the most recent data from the Transportation Department.
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