JetBlue and Spirit Airlines will go separate ways after deciding that the obstacles of a merger were too much to overcome.
JetBlue-Spirit End Merger Plan
In January, US District Judge William Young held that the JetBlue-Spirit merger could not proceed because it violated the Clayton Act. The heart of his ruling:
While it is understandable that JetBlue seeks inorganic growth through acquisition of aircraft that would eliminate one of its primary competitors, the proposed acquisition, in this Court’s attempt to predict the future in murky times, does violence to the core principle of antitrust law: to protect the United States’ markets –- and its market participants — from anticompetitive harm.
The Clayton Antitrust Act of 1914 was meant to curb mergers and acquisitions that tended to create monopolies to the detriment of US consumers. Specifically, §7 of the Act prohibits mergers when “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”
> Read More: The Spurious Legal Reasoning Behind JetBlue-Spirit Merger Decision
JetBlue and Spirit released statements disagreeing with the ruling and noting that options for appeal were being explored. But recognizing the uphill battle, JetBlue and Spirit have now officially broken off their merger plan and will not pursue a union further at this time.
In a note to staff on Monday, JetBlue CEO Joanna Geraghty explained:
“It was a bold and courageous plan intended to shake up the industry status quo, and we were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers.
“However, with the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low.”
Perhaps JetBlue also realized that it was vastly overpaying for Spirit Airlines? It must now pay a $69 million fee to Spirit, baked into the merger agreement, but will have to look at other avenues for growth.
Meanwhile, Spirit Airlines is now looking ahead to operating as a stand-alone carrier. Spirit CEO Ted Christie explained:
“Throughout the transaction process, given the regulatory uncertainty, we have always considered the possibility of continuing to operate as a standalone business and have been evaluating and implementing several initiatives that will enable us to bolster profitability and elevate the Guest experience.”
Spirit Airlines reported heavy losses for 2023, but hopes to return to profit in 2024.
CONCLUSION
JetBlue and Spirit Airlines have officially dropped their plan to merger, citing insurmountable opposition from federal courts and the US Department of Justice. As part of this breakup, JetBlue must pay Spirit $69 million.
If JetBlue really wants to merge, perhaps it’s time to start talking with Alaska Airlines once again…I’ll be saying more about that this week.
Poetic justice would be Spirit going out of business and reducing competition/ increasing pricing for white trash and minorities which are Spirit Airlines core customers.
This DoJ is out of control with their anti capitalism beliefs. Typical liberal nonsense under a bitter little man in Garland. But what would you expect from a guy who thinks blacks are too dumb and lazy to obtain an ID to vote?
Wow that was a lazy comment. A Reagan-appointed judge agreed with your liberal enemy too, so guess there were merits to the case? You could argue that the DOJ is anti-M&A, but that certainly doesn’t mean anti-capitalism.
Personally think the judge got it wrong in terms of impact of merger to consumers; I would not be upset if Frontier found a way to merge with Spirit
He really is a sad hateful person who gets off on trolling sites like this.
Says the GUY who thinks it’s normal to take another man’s di$k in his ass and mouth. Sorry guy but nothing comes off as more abnormal in human and animal recorded history than that. I’ll wait.
Says the guy who thinks it’s normal that he’s thinking about male-male anal and oral sex during a conversation about a failed airline merger…
“Sorry guy but nothing comes off as more abnormal in human and animal recorded history than that.”
Nah, your vile intolerant hatred of others is about as abnormal as it gets. And there is nothing wrong with being gay.
Yea Aaron, EVERYONE should try it, see how long mankind exists.
Face it, you are a FREAK! Sadly you aren’t alone. But there is a special place in hell for you. Oh wait, you don’t believe in that, you only believe in the joy you get from a load in the ass.
You really are obsessed with anal sex lol Feel free to come out of the closet any time, dear. Maybe then you’ll stop being such a hateful pile of bovine excrement.
Alaska has always been the better fit. Along with making JetBlue the overall brand so we can finally eliminate Bob Marley from the tail.
However, I am not so sure how those odds would play out in being approved. But that would, in essence, create another large carrier to perhaps better compete. Essentially giving us a Big 5.
Spirit Airlines, in pretty poor shape financially, may need to sell slots and/or gates at LGA and EWR to raise cash. Allegiant may bid those EWR slots while WN, UA and AA may want those LGA slots.
Jetblue, under the pressure of Carl Icahn, will sell some prize assets and then merge with another airlines.
JetBlue’s assets will be carved out and sold off, with much of it going to American and United. The rest, split among the ULCCs. JetBlue’s days as an independent airline are drawing to a close.
The pilot situation is a confluence of several items:
– Air freight passed it peak when COVID eased off
– Several airlines impacted by P&W geared turbofan engine issue, reducing capacity, turnaround at 3 to 4 months
– Near plateau in the North American market, now chasing PAX at lower yields, especially ULCC
– Air traffic Control still a traffic jam in the northeast as well as other parts of the nation
– Trunk line airlines are matching the ULCC fares with greater variety and redundancy
– Days of easy money (<4%) are gone, now need to earn a return on investment
– Trunk lines will push the limits on the scope clause with regionals to reduce costs
The airline industry has been feast and famine from the first day an airline ticket was sold.
One or two will fold in the next 12 to 24 months and their assets (gates, slots, airframes, delivery dates, etc) will fall into the hands of the survivors.
Its the nature of the beast!!