JetBlue and Spirit Airlines to Merge After Frontier Bows Out

The joint company will become the fifth-largest airline in the nation

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After months of an aggressive battle between Frontier and JetBlue, Spirit Airlines is set to be acquired by JetBlue, a move that will make the airline the country's fifth-largest.

The price tag for this acquisition? $3.8 billion, with the budget airline's shares being bought at $33.50 a piece. The merger is expected to close at the beginning of 2024, and the combined airline will be based in New York, where JetBlue's headquarters are.

The airline will eventually operate a fleet of 458 aircraft to more than 125 destinations in up to 30 countries. JetBlue also stated that the merger would create brand relevance in key cities, including Fort Lauderdale, Orlando, San Juan, and Los Angeles. 

"We are thrilled to unite with JetBlue through our improved agreement to create the most compelling national low-fare challenger to the dominant U.S. carriers, and we look forward to working with JetBlue to complete the transaction," said Ted Christie, Spirit's president and CEO, in a statement.

JetBlue plans to alter the consumer experience to be more in line with its current offering, creating what the company's CEO, Robin Hayes, describes as a "unique blend of low fares and exceptional service to more customers, on more routes."

News of the acquisition comes only a day after Spirit and Frontier Airlines ended talks for a potential union. "We're disappointed in this outcome, and the Spirit shareholders will miss an opportunity to meaningfully participate in the rebound of leisure travel," Frontier CEO Barry Biffle said in a company call, reported by USA Today

Although JetBlue and Spirit are both celebrating the idea of becoming the go-to low-fare airline, industry experts are concerned that Spirit's famous low-cost seating will fade and be replaced by traditional JetBlue prices.

The merger might also face regulatory disapproval, as both the Biden administration and the Department of Justice are making moves against corporate consolidation, as shown in the executive order signed by President Biden in July of last year that worked to "reduce the trend of corporate consolidation" and "increase competition." Most recently, the administration's Justice Department blocked an alliance between American Airlines and JetBlue, breaking up what could have been a complete merger. If this deal goes through, this will be the first U.S. airline merger since 2016, when Alaska Airlines acquired Virgin America for $2.6 billion.

JetBlue and Spirit hope to become "a solution to the lack of competition in the U.S. airline industry and the continued dominance of the Big Four," Hayes said. JetBlue expects to gain $600 million to $700 million in annual savings once the deal is complete.

Article Sources
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  1. The New York Times. "American Airlines and JetBlue Face Antitrust Suit Over Alliance." September 19, 2021.

  2. Simple Flying. "Why Did Alaska Airlines Remove the Virgin Brand So Fast?" October 7, 2020.