JetBlue and Spirit Airlines drop planned $3.8 billion merger

JetBlue and Spirit Airlines announced they mutually agreed to terminate their merger agreement after a federal court blocked the planned deal earlier this year.

The Department of Justice sued the two airlines to block the proposed merger, winning in a federal district court in January, with the two airlines appealing the ruling shortly after. The two airlines cited the unlikelihood of the regulatory hurdles being overcome ahead of the merger agreement’s July 24 deadline as the key reason for the decision on Monday.

JetBlue’s CEO Joanna Geraghty said the company is “proud” of the work it did with Spirit and believed the proposed merger was “worth pursuing.”

“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,” Geraghty said.

Spirit’s President and CEO Ted Christie also noted the regulatory challenges and said the company was “disappointed” the deal was unable to go forward.

“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. We wish the JetBlue team well,” Christie said in a statement on Monday.

A JetBlue Airways Airbus A320, left, passes a Spirit Airlines Airbus A320 as it taxis on the runway, July 7, 2022, at the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida. JetBlue and Spirit Airlines are ending their proposed $3.8 billion combination after a court ruling blocked their merger. JetBlue said Monday, March 4, 2024, that even though both companies still believe in the benefits of a combination, they felt they were unlikely to meet the required closing conditions before the July 24 deadline and mutually agreed that terminating the deal was the best decision for both. (AP Photo/Wilfredo Lee, File)

As part of the deal termination, JetBlue has agreed to pay Spirit $69 million. Both companies have stressed that they are confident in their plans to remain independent airlines and have both said they are pushing forward plans to get back to profitability.

“JetBlue has a strong organic plan and unique competitive advantages, including a beloved brand, a unique value proposition, and high-value geographies,” Geraghty said. “We have already begun to advance our plan to restore profitability. We look forward to sharing more on our progress in the coming months.”

JetBlue also says it will provide details on its long-term strategy at its investor day on May 30. Spirit has also said it remains “confident” in its strengths as an airline and is focusing on a return to profitability.

“Throughout the transaction process, given the regulatory uncertainty, we have always considered the possibility of continuing to operate as a standalone business and have been evaluating and implementing several initiatives that will enable us to bolster profitability and elevate the Guest experience,” Christie said.

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“As we go forward, I am certain our fantastic Spirit team will continue delivering affordable fares and great experiences to our Guests,” he added.

The merger breaking down comes less than a year after another agreement between JetBlue and an airline ended. In 2023, the DOJ successfully broke up JetBlue’s Northeast Alliance with American Airlines, arguing the agreement violated antitrust laws.

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