JetBlue and Spirit Airlines have decided to end their proposed $3.8 billion merger following a court ruling that blocked the deal. The decision was made as both airlines felt they were unlikely to meet the necessary closing conditions before the July 24 deadline. Despite believing in the benefits of the combination, they mutually agreed that terminating the deal was in the best interest of both parties.
JetBlue CEO Joanna Geraghty expressed pride in the collaborative work done with Spirit to challenge the status quo. However, given the remaining hurdles to closing the deal, both airlines concluded that moving forward independently was the most suitable course of action. Spirit CEO Ted Christie also shared his disappointment over not being able to proceed with a deal that could have saved consumers hundreds of millions and created a strong competitor to the dominant 'Big 4' U.S. airlines.
As part of the termination agreement, JetBlue will pay Spirit a $69 million fee. The Justice Department had filed a lawsuit last year to block the merger, citing concerns that it would reduce competition and lead to increased fares, particularly affecting low-fare Spirit customers. In January, a federal district judge in Boston ruled in favor of the government, stating that the merger violated antitrust laws.
JetBlue had argued that the merger would enhance its competitiveness against larger airlines, but ongoing losses and challenges at Spirit, based in Miramar, Florida, raised concerns. Last week, JetBlue had hinted at the possibility of terminating the agreement.
Following the news, JetBlue Airways Corp. saw a more than 5% increase in its stock value, while Spirit's stock declined by over 13% before the market opened.
