JetBlue Airways Corporation and Spirit Airlines, Inc. today announced a merger agreement had been approved by their boards of directors. Under the agreement, JetBlue will acquire Spirit for $33.50 per share in cash for an aggregate fully diluted equity value of $3.8 billion. Yesterday, Spirit terminated its proposed merger with Frontier Airlines.
“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” said Robin Hayes, chief executive officer, JetBlue.“We look forward to welcoming Spirit’s outstanding Team Members to JetBlue and together creating a customer-centric, fifth-largest carrier in the United States. Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines. This combination is an exciting opportunity to diversify and expand our network, add jobs and new possibilities for crewmembers, and expand our platform for profitable growth.”
The completion of the acquisition is subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit’s stockholders. The companies expect to conclude the regulatory process and close the transaction no later than the first half of 2024.
The four largest carriers, American, Delta, United, and Southwest, control more than 80% of the market. JetBlue is the 5th largest airline. However, Spirit and Frontier have been a moderating influence on fares in markets they service. It is feared the JetBlue acquisition of Spirit will result in higher fares as JetBlue absorbs Spirit routes and the low-fare competition on the five largest airlines diminishes.