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JetBlue, Spirit End $3.8B Merger After Antitrust Suit Loss

4 March 2024
3472
2 min.
3
JetBlue, Spirit End $3.8B Merger After Antitrust Suit Loss

Flight to Nowhere

JetBlue Airways and Spirit Airlines have announced the termination of their merger agreement, a decision following a recent federal antitrust lawsuit setback.

In a January twist, a federal judge stepped in to halt JetBlue's pursuit of budget airline Spirit following a lawsuit from the Justice Department. The Justice Department's contention? The merger could stifle competition in the skies, potentially eliminating Spirit as a go-to option for savvy, budget-conscious travelers.

JetBlue and Spirit promptly appealed the judge's ruling, albeit JetBlue clarified that the appeal was a contractual obligation stemming from the merger agreement. Despite this effort, industry analysts remained skeptical of a favorable outcome.

The news reverberated in the stock market, with Spirit shares plummeting 17% in premarket trading, while JetBlue experienced a modest uptick of around 4%.

Nearly two years ago, JetBlue made an unexpected bid for Spirit Airlines, which was already in talks for a merger with fellow budget carrier Frontier. JetBlue successfully secured shareholder approval for the acquisition, envisioning a move that would disrupt the industry's norms and provide ample growth opportunities for its workforce.

JetBlue's CEO, Joanna Geraghty, reflected on the endeavor, acknowledging its ambitious nature. "It was a bold strategy, aimed at challenging the industry's status quo. We believed in competing with Frontier and seizing an opportunity that could have propelled our growth and enriched our team," she remarked in a message to employees.

"Nevertheless, given the recent court ruling and the persistent opposition from the Department of Justice, the likelihood of obtaining approval for the merger in the foreseeable future is minimal."

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