JetBlue has reached an agreement with Spirit Airlines to terminate their July 2022 merger agreement. Although both companies continue to believe in the procompetitive benefits of the combination, JetBlue and Spirit mutually agreed that terminating is the best path forward for both companies as required closing conditions, including receiving necessary legal and regulatory approvals, were unlikely to be met by the merger agreement’s deadline of July 24 of this year.
“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” says Joanna Geraghty, CEO of JetBlue, in a prepared statement. “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. We wish the very best going forward to the entire Spirit team.”
The U.S. Department of Justice sued last year to block the merger, saying in court documents that the merger would reduce competition and elevate fares. A federal district judge in Boston ruled in January to block the merger.
“Today’s decision by JetBlue is yet another victory of the Justice Department’s work on behalf of American consumers,” says Attorney General Merrick Garland in a prepared statement. “The Justice Department proved in court that a merger between JetBlue and Spirit would have caused tens of millions of travelers to face higher fares and fewer choices. We will continue to vigorously enforce the nation’s antitrust laws.”
Under the JetBlue and Spirit termination agreement, JetBlue will pay Spirit $69 million. The termination resolves all outstanding matters related to the transaction, under which any claims between them will be mutually released.
