JetBlue and Spirit Airlines have signed a merger agreement for the former to take over the low-cost carrier for US$3.8 billion, the airlines announced on Thursday. The deal comes one day after Spirit and Frontier Airlines called off their merger agreement. JetBlue and Frontier had been vying for Spirit since April.
The move comes after the low-cost carrier launched daily flights from Gatwick to Boston Logan International earlier this month, with an additional service from Heathrow to Boston set to launch on 22 August. JetBlue already flies to New York from both London airports.
If approved, the merger will create the fifth-largest airline in the United States and be a “national low-fare challenger to the dominant big four airlines.” The combined entity would be based in New York and led by JetBlue CEO Robin Hayes, according to the companies.
Under the terms of the agreement, JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders’ approval of the transaction, and a ticking fee of 10 cents per month starting in January 2023 through closing.
“Bringing our two airlines together will be a game changer, and we are confident that JetBlue will deliver opportunities for our guests and team members with JetBlue’s unique blend of low fares and award-winning service,” Spirit president and CEO Ted Christie said in a statement.
The companies expect to conclude the regulatory process and close the transaction “no later than the first half of 2024”.