Low-fare carrier JetBlue Airways has officially announced the termination of its planned 2022 merger agreement with fellow US low-fare carrier Spirit Airlines.
The merger, already blocked by a federal judge earlier in the year for breaching anti-competition laws, is now dead in the water after JetBlue reached an agreement with Spirit to terminate the US$3.8 billion deal. Both JetBlue and Spirit now agree that this is the best path forward, as closing conditions of the merger would be difficult to meet by July 2024.
JetBlue will still pay Spirit a US$69 million termination fee, and all ongoing matters related to the transaction will be settled. While the merger agreement was in effect, Spirit stockholders received around US$425 million in total prepayments.
Joanna Geraghty, Chief Executive Officer of JetBlue, said: “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.”
In a separately released statement, Spirit’s President and Chief Executive Officer, Ted Christie, said that although he was disappointed Spirit couldn’t move forward with “a deal that would save hundreds of millions for consumers and create a real challenger to the dominant ‘Big 4’ US airlines,” he was still confident in its future as a successful airline.
JetBlue will now look to focus on its organic strategy and a return to profitability for the foreseeable future. According to Geraghty, it has already begun to advance its plan to restore profitability and will share more on its progress in the coming months.
