JetBlue, Spirit Airlines call off $3.8B merger following court ruling

JetBlue and Spirit Airlines have decided to terminate their proposed $3.8 billion merger after a court ruling blocked the deal, The Washington Post reported. 

Despite believing in the benefits of the merger, both companies acknowledged the challenge of meeting required closing conditions before the July 24 deadline. 

They mutually concluded that ending the deal was the most prudent decision. The Justice Department had sued to prevent the merger, asserting it would diminish competition and raise fares, particularly for low-fare Spirit travellers. 

In January, a federal judge sided with the government, deeming the deal in violation of antitrust law. Although the airlines had appealed, with an appeal hearing scheduled for June, they opted to abandon the merger.

Despite an appeal from both JetBlue and Spirit, the decision to terminate the agreement comes as JetBlue sees an "extremely low probability" of regulatory approval.

JetBlue's CEO, Joanna Geraghty, defends the initial intent, emphasising the competitive stance against Frontier and the growth opportunities it would have provided.

While Spirit Airlines stock takes a hit due to the failed merger that would have made it the 5th largest US carrier, Spirit expresses confidence in achieving profitability independently.

Spirit forecasts revenue between $1.25 billion and $1.28 billion this quarter, surpassing estimates, with $1.3 billion in liquidity reported at the end of 2023.