The two largest airlines at Fort Lauderdale-Hollywood International Airport are calling off their merger. Today, Spirit Airlines announced it will not be purchased by JetBlue. It brings an end to the effort 18 months after it was first announced.
JetBlue won the bidding war for Spirit in the summer of 2022. Earlier that year, Spirit had a deal to be sold to a different suitor — Frontier Airlines. But JetBlue came in and kept upping its offer, eventually willing to pay $3.8 billion for Spirit. The two companies gave themselves two years to get the deal done.
But a federal judge in Boston stopped the corporate marriage in January, ruling it would hurt competition. It was a victory for the Biden Administration's Justice Department’s more critical position on corporate mergers. The airlines appealed and a court hearing was scheduled for June, just a month before the deal was due to expire.
Instead, the two ultra low cost carriers have agreed to end their merger efforts. In a news release, Spirit CEO Ted Christine said they decided the “current regulatory obstacles” meant it wasn’t going to get the deal closed by its July deadline.
He was more pointed in his criticism of the federal court’s decision during Spirit’s fourth quarter conference call with analysts and shareholders.
“It is beyond absurd for the government to claim a victory for the American consumer. In fact, it is ridiculous,” he said in early February.
READ MORE: Spirit is defiant about merging with JetBlue and optimistic about business
Combined, Spirit and JetBlue are responsible for half of the passenger traffic at the Fort Lauderdale airport.
JetBlue will pay Spirit $69 million to break up the deal. Spirit already had received $425 million in prepayments. JetBlue had agreed to pay $33.50 per share for Spirit. At the time of the original deal, Spirit stock was almost $25 a share. It traded below $6 on Monday as news of the merger termination was released.
Spirit has not reported a quarterly profit since before the COVID-19 pandemic. One stock analyst has raised concerns about its ability to go it alone without merging with another airline.
In announcing it was ending its merger efforts with JetBlue, Spirit said it was “confident in its strengths and is focused on returning to profitability.” Spirit lost $447 million last year. It has forecast that it will be cash flow positive during the second quarter, and through the rest of the year.
