March 4 (UPI) — JetBlue and Spirit Airlines on Monday called off a planned merger deal that began two years ago after it was blocked by a federal judge.
Both airlines signaled the decision was amicable and made clear that among other reasons, ongoing regulatory hurdles would have made the merger a very difficult task to complete.
“We concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement,” Ted Christie, President and Chief Executive Officer of Spirit Airlines, said in a statement.
Under the terms of their mutual agreement, JetBlue said it will pay $69 million to Spirit Airlines which “resolves all outstanding matters related to the transaction and under which any claims between them will be mutually released,” both airlines noted how they were making a series of cost-saving measures intended to save their company bottom-lines millions of dollars.
Regulators said the merger between the two airlines would have created an unfair disadvantage for consumers, but JetBlue’s CEO Joanna Geraghty said Monday that the merger “would have unleashed a national low-fare, high-value competitor to the Big Four airlines.”
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four Airlines,” JetBlue CEO Joanna Geraghty said. “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.”
The airlines signaled at the end of January that the original $3.8 billion deal agreed to in July 2022 — which would have created the fifth-largest airline in the United States after American Airlines, Delta, Southwest and United — appeared to be faltering just days after a federal judge on Jan. 16 blocked the merger, calling it anti-competitive.
The day after the merger was blocked, Sen. Chris Murphy, D-Conn., explained how the Biden administration had tried to take steps to block the merger. If the merger took place as planned, Murphy said the “downward pressure on price would be removed everywhere that Spirit flies.”
“JetBlue admitted that it was planning to increase fares by 25% or more after they merged with Spirit on the routes that Spirit flies,” Murphy said on X.
