On Monday, JetBlue Airways and Spirit signed a joint agreement to end their acquisition to merge the two airways. Announced in July of 2022, JetBlue Airlines CEO Joanna Geraghty exclaimed the deal “would have unleashed a low-fare, high-value competitor to the big four airlines.”
Almost two years ago, JetBlue unexpectedly came to Spirit with an unrequested bid for Spirit Airlines, which a few weeks prior struck a merger agreement with another budget airline Frontier. In response, Spirit shareholders accepted the JetBlue acquisition to take over the budget airline.
The two carrier companies had many regulatory challenges at the end of their merger agreement. The two companies believed that they needed to combine to better compete with the larger airlines that are in control of the airfare market.
It was a bold and courageous plan intended to shake up the industry status quo, and we were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers.
— JetBlue CEO Joanna Geraghty
In January a federal judge sided with the justice department and blocked the attempt of JetBlue taking over the budget carrier Spirit. In the ruling, Judge William Young said JetBlue’s takeover of Spirit would “harm cost-conscious travelers who rely on Spirit’s low fares.”
In response to the two airlines agreeing to terminate their agreement, Spirit’s stock was down 14% Monday morning as opposed to JetBlue’s stock being up a small margin.
With the end of the deal, Spirit must face its financial problems alone. The leaders say they are equipped and ready to confront their debt and are working to refinance.
