JetBlue & Spirit Terminate Merger

JetBlue & Spirit Terminate Merger March 5, 2024, 10:03 a.m., readers: 5

JetBlue Airways Corporation (NASDAQ:JBLU) and Spirit Airlines (NYSE:SAVE) terminated their $3.8-billion merger agreement, acknowledging that there was no feasible way to proceed after a U.S. judge halted the merger in January due to anti-competition concerns. Following the announcement, Spirit Airlines’ shares dropped more than 10% yesterday, while JetBlue gained more than 4%. Had it been successful, the merger would have formed the fifth-largest airline in the U.S. and could have been crucial for Spirit's continuation, especially as it navigates through financial challenges including cash burn and debt. However, the merger faced significant hurdles from the beginning, culminating in a Boston judge's ruling that it would adversely affect consumer choice and increase fares due to reduced competition. This outcome marks a significant win for the Biden Administration, which has adopted a stringent stance on consolidations within the aviation industry, asserting that such mergers would lead to higher ticket prices and limit options for consumers.