JetBlue Scraps Spirit Merger

JetBlue and Spirit Airlines announced they are terminating their $3.8B merger, citing the unlikelihood of meeting legal and regulatory approvals by the agreement's July deadline. The news follows a federal judge's block in January ruling the merger would have driven up fares for price-conscious travelers and hurt competition. The airlines appealed the decision, and a hearing had been set for June. JetBlue will pay Spirit a $69M termination fee (see 101). 

JetBlue initiated a takeover in 2022 after Spirit's deal with Frontier Airlines collapsed. Both airlines grapple with financial challenges, with JetBlue reporting declining revenue and Spirit addressing losses following the grounding of numerous aircraft in the past year due to engine problems. The merger would have created the fifth-largest airline in the US, giving the combined entity control of roughly 10% of the domestic market. American, United, Delta, and Southwest account for roughly 70% of the domestic market share.

The announcement raises questions about whether Alaska Airlines (the fifth-largest carrier) will be able to proceed with its proposed purchase of Hawaiian Airlines.