JetBlue Airways (NASDAQ:JBLU) and Spirit Airlines (NYSE:SAVE) said Monday that they have mutually agreed to terminate their $3.8 billion merger agreement not long after they lost a federal antitrust lawsuit challenging the deal.
The companies said the decision to end the agreement was reached as the necessary legal and regulatory approvals required for the merger were unlikely to be obtained by the specified closing date of July 24, 2024. Although both companies believed in the benefits of the combination, they concluded that moving forward independently was the best path.
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” said Joanna Geraghty, chief executive officer, JetBlue. “We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently."
Under the agreement, JetBlue will pay Spirit $69 million. Geraghty added that JBLU “has a strong organic plan and unique competitive advantages, including a beloved brand, a unique value proposition, and high-value geographies.”
“We have already begun to advance our plan to restore profitability. We look forward to sharing more on our progress in the coming months," she added.
JetBlue will hold an Investor Day on Thursday, May 30, 2024, to provide additional details on its long-term strategy and ongoing revenue and cost initiatives.