JetBlue Airways has reached a deal to buy ultra-low-cost carrier Spirit Airlines, bringing an end to a months-long bidding war with Frontier, and creating a “national low-fare challenger to the dominant big four airlines.”
JetBlue announced the deal on Thursday morning, writing that it will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit shareholders’ approval of the deal. When the deal is finalized, the combined carrier will be the fifth-largest airline in the U.S.
“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” said Robin Hayes, chief executive officer, JetBlue.
“We look forward to welcoming Spirit’s outstanding Team Members to JetBlue and together creating a customer-centric, fifth-largest carrier in the United States. Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines. This combination is an exciting opportunity to diversify and expand our network, add jobs and new possibilities for Crewmembers, and expand our platform for profitable growth.”
JetBlue’s announcement came just a few hours after talks between Spirit and Frontier ended. Spirit reportedly could not secure shareholder approval for its deal to buy Frontier despite the efforts from its executive board, including delaying the vote four different times.
“While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our Team Members on the transaction over the past many months,” said Ted Christie, President, and CEO of Spirit Airlines.
JetBlue’s approval process now becomes easier with Frontier out of the picture. However, there are still some regulatory approval procedures needed to be completed—Spirit had said that JetBlue’s Northeast Alliance with American Airlines, which was heavily expanded over the past two years particularly out of New York and Boston, will make it difficult to gain the regulatory approval it would need for the deal to go through.
The deal jump-starts JetBlue’s growth plans, adding more than 1,700 daily flights to more than 125 destinations in 30 countries. It also helps JetBlue boost its relevance in some key markets, including Ft. Lauderdale, Orlando, San Juan, and Los Angeles, along with an increased presence in the hubs of those “big four airlines,” including Las Vegas, Dallas, Houston, Chicago, Detroit, and Miami.
JetBlue also said that the all-Airbus combined fleet will include new A220s and A320neos.