JetBlue Submits $3.6 Billion Bid for Spirit Airlines


First reported by The New York Times, JetBlue says they have submitted an unsolicited bid to purchase Spirit Airlines, almost exactly two months after the Miami-based carrier announced they would merge with fellow ultra-low-cost-carrier Frontier Airlines.


JetBlue Calls $3.6 Billion All-Cash Bid “Superior Proposal” to Frontier Offer

Frontier and Spirit announced their intention to merge into one airline on February 7, 2022, creating a carrier with over 350 Airbus aircraft and more than 1,000 daily flights to 19 countries. In presenting the plan to investors, the two carriers noted coming together would save $1 billion annually while offering lower airfares than the four major U.S. carriers.


Despite the previous engagement, JetBlue claims they have the “Superior Proposal” for Spirit and its shareholders. Their plan would acquire Spirit for $33 per share in cash, at a fully diluted equity value of $3.6 billion. The New York-based carrier says the purchase would not require a shareholder vote from JetBlue, with financing certain.


In their public sales pitch, JetBlue says they would be a better suitor for Spirit because the purchase would accelerate “JetBlue’s growth and expanding the reach of the “JetBlue Effect,” which occurs when legacy carriers react to JetBlue’s unique combination of low fares and award-winning customer service.” The airline launched service into the United Kingdom in 2021, while service into Canada is expected to start later this year. Frontier currently flies to Canada but does not operate any trans-Atlantic flights.


“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” said Robin Hayes, chief executive of JetBlue, in a press release. “The combination of JetBlue and Spirit – coupled with the incredible benefits of our Northeast Alliance with American Airlines – would be a game changer in our ability to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders.”


In their own statement, Spirit confirmed they received JetBlue’s takeover bid, and said they would “evaluate JetBlue’s proposal and pursue the course of action it determines to be in the best interests of Spirit and its stockholders” under the terms of their previous agreement with Frontier.


The Denver-based Frontier has not issued a public statement about the development.


Either Merger Could Face Additional Scrutiny from Federal Regulators

Regardless of which direction Spirit goes, any merger will potentially face increased scrutiny from both the U.S. Department of Justice and Department of Transportation. The Justice Department is currently suing both American Airlines and JetBlue over the Northeast Alliance, while Frontier Airlines chief executive Barry Biffle went on the defensive after lawmakers questioned the proposed merger with Spirit.

Source: frugal travel guy

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.