JetBlue Terminates Merger With Spirit Airlines

04.03.2024 - 16:23 / skift.com / Ted Christie / Spirit Ceo / Meghna Maharishi / Airlines

JetBlue announced Monday it reached an agreement with Spirit Airlines to terminate its merger. 

Both airlines said they thought it was unlikely that all the conditions for the merger would be approved by July 24.

“With the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low,” Geraghty said in a message to crewmembers Monday morning. “Additionally, the lingering uncertainty is distracting and taking our resources away from more pressing priorities — particularly our work to return to profitability and reinvigorate our brand and culture.”

As part of the merger agreement, JetBlue will pay Spirit $69 million in cash by March 5, according to a regulatory filing. Spirit shareholders received $425 million in prepayments while the merger was still in effect. 

“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,” Geraghty said in a statement. 

Spirit shares fell around 14% following the announcement. JetBlue’s were up approximately 2%.

Without the merger, Geraghty said JetBlue plans to solely focus on its strategy to return to profitability — a strategy that includes increasing capacity on leisure routes while cutting operating costs.

“JetBlue has a strong organic plan and unique competitive advantages, including a beloved brand, a unique value proposition, and high-value geographies,” Geraghty said. “We have already begun to advance our plan to restore profitability. We look forward to sharing more on our progress in the coming months.”

Geraghty said “it was time to write the next chapter,” in the note to crewmembers. 

“Almost two years ago, we believed that combining with Spirit would bring many benefits to crewmembers, customers, and communities,” Geraghty said in the note. “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.”

Spirit CEO Ted Christie said he believed Spirit could survive as an independent airline. 

“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,” Christie said. “However, we remain confident in our future as a successful independent airline.” 

A federal judge blocked the merger in January on the grounds that a combined airline would raise fares and harm the most