JetBlue and Spirit Airlines announce termination of merger agreement
JetBlue and Spirit Airlines said Monday that they have reached an agreement to terminate their merger agreement announced in July 2022.
JetBlue and Spirit mutually agreed that terminating is the best path forward for both companies as required closing conditions, including receiving necessary legal and regulatory approvals, were unlikely to be met by the merger agreement’s outside date of July 24, 2024.
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” said Joanna Geraghty, chief executive officer, JetBlue. “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.”
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“After discussing our options with our advisors and JetBlue, we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement,” said Ted Christie, Spirit’s President and Chief Executive Officer. “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”.
Under the agreement, JetBlue will pay Spirit $69 million and the termination resolves all outstanding matters related to the transaction and under which any claims between them will be mutually released.
As outlined on the company’s fourth quarter earnings call, JetBlue is taking decisive action to return to sustained profitability and drive shareholder value. As part of this work, the company is refocusing on its core strengths – deepening its network relevance in proven geographies and better segmenting its product offerings to enhance its competitive position – while delivering meaningful cost savings.
Spirit is confident in its strengths and is focused on returning to profitability. The Company has been taking, and will continue to take, prudent steps to ensure the strength of its balance sheet and ongoing operations, including assessing options to refinance upcoming debt maturities.
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