JetBlue and Spirit Airlines have scrapped their merger deal after months of negotiations and lost legal battles.
The 2022 deal should have been worth $3.8bn and would have created the US’s fifth largest airline.
In a statement posted online, JetBlue said the decision was made mutually between the airlines.
“JetBlue and Spirit mutually agreed that terminating is the best path forward for both companies,” it read. The statement explained that as “required closing conditions, including receiving necessary legal and regulatory approvals” would not be achieved by the current agreement’s lapse date (24 July 2024) it would be abandoned.
This course was set in January when a District Court Judge in the US sided with the Department of Justice and ruled the merger would be anti-competitive. Despite the stated intention to appeal the judgement, Spirit’s CEO Ted Christie blamed what he referred to as “current regulatory obstacles” for the deal’s demise.
“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,” Christie added.
JetBlue’s CEO Joanna Geraghty echoed Christie’s sentiments.
“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,” she said.
JetBlue’s company statement further explained the deal would be wound up financially with a $69m payment to Spirit.
“Under the agreement, JetBlue will pay Spirit $69 million and the termination resolves all outstanding matters related to the transaction and under which any claims between them will be mutually released.”