JetBlue Airways (B6, New York JFK) and Spirit Airlines (NK, Fort Lauderdale International) announced they have agreed to terminate their merger after concluding they would not receive the legal and regulatory approvals by the July 24 deadline.
In January, a federal judge blocked JetBlue from buying Spirit Airlines, saying the USD3.8 billion deal would reduce competition and harm consumers by driving fares upwards. The carriers had an appeal court meeting set in June to overturn the judge’s decision.
Following the merger termination, JetBlue will pay Spirit USD69 million. The ultra-low-cost carrier’s chief executive, Ted Christie, said, “We are disappointed we cannot move forward with the deal [...]. However, we remain confident in our future as a successful independent airline.”
Spirit Airlines has retained Perella Weinberg & Partners L.P. and Davis Polk & Wardwell LLP as advisors as the company continues assessing options to refinance upcoming debt maturities, it announced. Its bondholders were also reported last month to have been recruiting advisers ahead of possible negotiations over the company’s debt, which exceeds USD1 billion and comes due in 2025 and 2026.
Simultaneously, JetBlue’s CEO, Joanna Geraghty, said the company has already begun to advance its plan to restore profitability, identifying near-term revenue initiatives for this year, which will deliver over USD300 million in revenue benefits, as well as a structural cost programme that could provide between USD175 million and USD200 million in cost savings and USD75 million in maintenance savings from its fleet modernisation. JetBlue expects to approach breakeven operating margins in 2024. The company recorded a USD310 million net loss in 2023.
