Spirit-JetBlue merger takes flight after Frontier deal terminated
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Spirit Airlines and JetBlue Airways announced that they have agreed to a merger Thursday, less than a day after Spirit terminated its proposed merger with budget airline Frontier.
Driving the news: JetBlue said in a news release that it will pay $33.50 a share in cash for Spirit in a $3.8 billion deal, which was higher than Frontier's $2.6 billion offer in cash and stock.
- Spirit had said Wednesday it planned to hold discussions with JetBlue about a possible deal, Axios' Nathan Bomey reports.
- Spirit announced the Frontier deal's collapse after the company's shareholders were poised to vote on it.
Why it matters: The deal, which still needs regulatory approvals and approval from Spirit stockholders, would create the nation's fifth largest airline.
- The companies expect to conclude the regulatory process and close the transaction no later than the first half of 2024.
JetBlue and Spirit merger
Details: The combined airline with a fleet of 458 aircraft will be based in New York but would have a "significant presence in Florida," according to a fact sheet on a new merger website.
- JetBlue said the acquisition would accelerate its growth plan with 1,700-plus daily flights to more than 125 destinations in 30 countries based on December 2022 schedules.
- The acquisition will increase relevance for JetBlue in certain key focus cities (Fort Lauderdale, Orlando, San Juan, and Los Angeles) as well as Big Four airline hubs (Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami), the company said.
- The airlines will continue to operate independently until after the transaction closes.
JetBlue said if the deal doesn't close due to antitrust reasons, it will pay Spirit a reverse break-up fee of $70 million and Spirit stockholders a "reverse $400 million less any amounts paid to stockholders of Spirit before termination."
What they're saying: JetBlue CEO Robin Hayes said in a statement that the two airlines will work to "continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines."
- "By enabling JetBlue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone," Hayes said, noting that combined the airlines would "still be significantly smaller than the Big Four."
- Spirit president and CEO Ted Christie said the merger will be a "game changer" and would "create the most compelling national low-fare challenger to the dominant U.S. carriers."
