Just hours after the bargain carrier’s attempt to merge with Frontier Airlines was abandoned, JetBlue Airways has secured an agreement to purchase Spirit Airlines.
For the $3.8 billion transaction, the airline has offered Spirit $33.50 per share in cash, making Spirit the fifth-largest carrier.
If regulators accept the airline’s purchase of Spirit, Frontier would become the biggest bargain carrier in the US.
JetBlue Airways’ unexpected all-cash offer for Spirit in April called into question the cheap carriers’ intentions to merge with Frontier.
Following months of back and forth as Frontier and JetBlue fought for control of the airline, the original merger plan was abandoned yesterday.
After terminating the Frontier contract, Spirit indicated that they would continue selling while JetBlue would take over.
Yesterday, Spirit’s management was eventually unable to secure the majority of its shareholders’ approval to finalise the Frontier purchase.
The CEO of JetBlue, Robin Hayes, stated: “We are thrilled to deliver this compelling combination that accelerates our strategic growth and enables JetBlue to bring our distinctive blend of low fares and exceptional service to more customers, on more routes.
We are excited to welcome Spirit’s exceptional Team Members to JetBlue and work with them to build the country’s fifth-largest airline into a customer-focused organisation.
“Spirit and JetBlue will continue to push our joint objective of industry disruption to lower fares from the Big Four airlines,” they said.
“This combination is a wonderful chance to broaden and increase our network, offer positions and new opportunities for Crewmembers, and grow our platform for successful growth.”
Executives at JetBlue have been arguing for months that the acquisition would enable them to compete with major carriers that dominate the US market, including American Airlines, Delta, United Airlines, and Southwest.
Additionally, they assert that it would give them access to a combined fleet of 458 aircraft on a pro forma basis as well as an order book of over 300 Airbus aircraft, which would enable them to accelerate their growth.
Due to a shortage of both Airbus aircraft and pilots, JetBlue intends to upgrade the aircraft with seatback screens and additional legroom in the JetBlue style.
Spirit, a Florida-based company, previously rejected JetBlue’s offers and claimed that regulators weren’t likely to approve a merger.
They said that part of the reason for their initial rejection was due to JetBlue’s partnership with Americans, which the Justice Department attempted to prevent last year.
“We are excited to join forces with JetBlue through our enhanced agreement to establish the most attractive national low-fare rival to the main U.S. carriers,” said Ted Christie, CEO of Spirit. “We look forward to working with JetBlue to close the transaction.”
“Combining our two airlines will be a game-changer, and we are convinced that JetBlue will deliver opportunities for our Guests and Team Members with JetBlue’s distinctive blend of affordable fares and award-winning service,” the statement continued.
We are very grateful for our Spirit Family’s perseverance throughout this journey.
The happy news of today demonstrates JetBlue’s respect for Spirit and a shared conviction in the benefits that the merged airline will provide for our passengers.