Spirit Airlines And JetBlue Cancel Their $3.8 Billion Merger Following a Court Ruling

(CTN News) – JetBlue and Spirit Airlines will terminate their proposed $3.8 billion merger following a court ruling blocking the deal.

Although both companies believe that the merger will bring many benefits to both companies, there is still the challenge of meeting all the closing conditions before the 24th of July.

As a result of their mutual discussions, they both decided that terminating the deal was the wisest course of action. In order to prevent the merger from taking place, the Justice Department filed a lawsuit and claimed that it would weaken competition and lead to higher fares for Spirit’s low-fare customers.

It was announced in January that a federal judge sided with the government, deeming the pending deal to be in violation of antitrust laws. In spite of the fact that the airline merger was appealed, and the appeal hearing had been set for June, the airlines decided to abandon the deal.

Even though JetBlue and Spirit both appealed to the government to approve the deal, JetBlue still decided to terminate it as it sees an “extremely low probability” of getting regulatory approval in the near future.

In response to this, JetBlue’s CEO, Joanna Geraghty, defends the initial intent, emphasising the competitive advantage JetBlue would have gained by competing against Frontier and the growth opportunities it would have offered.

Despite the stock price of Spirit Airlines taking a hit since the failed merger that would have made it the 5th largest US carrier failed, Spirit Airlines expresses confidence that it will be able to achieve profitability as a standalone company.

There is an expectation that Spirit’s revenue will be between $1.25 billion and $1.28 billion this quarter, surpassing estimates, with a liquidity balance of $1.3 billion expected at the end of 2023.

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