Shares of JetBlue are rising more than 15% before the market open on Tuesday, Feb 13, 2024, as activist investor Carl Icahn took a nearly 10% stake in the airline. (AP Photo/David Zalubowski/file The Canadian Press)
JetBlue Airways and Spirit Airlines have jointly announced the termination of their merger agreement, which was initially set in July 2022.
The decision came as officials from both airlines agreed that proceeding with the merger was no longer viable. They determined that meeting the required closing conditions, including obtaining necessary legal and regulatory approvals, would be unlikely by the deadline of July 24, 2024.
Joanna Geraghty, JetBlue's CEO, expressed the belief that the merger had the potential to introduce a national low-fare, high-value competitor to the major airlines. However, given the remaining challenges in closing the deal, both companies agreed that pursuing independent paths would better serve their interests.
As part of the termination agreement, JetBlue will compensate Spirit Airlines with $69 million, resolving all outstanding issues related to the merger. Any claims between the two airlines will be mutually released.
Both JetBlue and Spirit Airlines have redirected their focus towards returning to sustained profitability. They aim to leverage their core strengths, implement significant cost-saving measures, and enhance their network relevance.
Ted Christie, Spirit's President and CEO, acknowledged the regulatory obstacles hindering the timely completion of the merger. He expressed disappointment that the deal, which could have generated substantial savings for consumers and fostered competition against the dominant airlines, could not proceed as planned. Nevertheless, he expressed confidence in Spirit's future as an independent airline and extended well wishes to the JetBlue team.
Earlier in January, a federal judge ruled against the merger, citing antitrust concerns. The decision emphasized the importance of preserving Spirit Airlines as an ultra-low-cost competitor to benefit consumers and maintain fare competitiveness among carriers.
