US-based carriers Spirit Airlines and JetBlue have agreed to terminate their planned merger because of “current regulatory obstacles”.
The move comes after JetBlue’s deal to buy Spirit in a deal worth $3.8 billion, which was first announced in July 2022, was blocked by a US judge in January on competition grounds following an antitrust lawsuit filed by the US Department of Justice (DOJ).
Spirit and JetBlue initially filed a notice of appeal against the judge’s decision but now both airlines have mutually agreed to terminate their agreement.
Ted Christie, Spirit's president and CEO, said: “After discussing our options with our advisors and JetBlue, we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement.
“We are disappointed we cannot move forward with a deal that would save hundreds of millions for consumers and create a real challenger to the dominant ‘Big 4’ US airlines. However, we remain confident in our future as a successful independent airline.”
The deal between the two airlines required the merger to be finalised by 24 July 2024. JetBlue said gaining legal and regulatory approval by this date was “unlikely”.
Joanna Geraghty, JetBlue’s CEO, added: “We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines.
“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.”
Under the agreement, JetBlue will pay Spirit $69 million and the termination of the deal “resolves all outstanding matters”.
JetBlue added that it would now focus on its “organic strategy and return to profitability”.