JetBlue Airways and Spirit Airlines have dissolved their July 2022 merger agreement due to recent setbacks that mean legal and regulatory approval is unlikely to be reached by the plan’s proposed cut-off point of 24 July 2024.
Federal antitrust regulators blocked JetBlue’s proposed USD$3.8 billion (AUD$5.8 billion) acquisition of Spirit in January amid concerns the merger would adversely affect competition and access to low-price fares.
Under the termination deal, JetBlue will pay Spirit USD$69 million (AUD$106 million) and the termination resolves all outstanding matters related to the transaction.
The LLC supermerger would have seen the nation’s sixth- and seventh-largest carriers take 10.2 per cent of the domestic market share dominated by four larger airlines.
It proposed a national low-fare challenger brand to the ‘Big Four’ US carriers of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines, holding 80 per cent of US seats.
JetBlue confirmed on its website that the US budget airlines mutually agreed termination was the best way forward for both companies.
JetBlue CEO Joanna Geraghty said: “We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the ‘’Big Four’ airlines.”
“We are proud of the work we did 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.”
Ms Geraghty added that the airline has already progressed its plan to restore profitability.
Spirit’s President & CEO Ted Christie said the LCC is also focused on returning to profitability.
“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 Four’ US airlines,” he said.
“However, we remain confident in our future as a successful independent airline.”
